New Facilities Contracts Introduced in 2025
HM Revenue and Customs (HMRC) has come under renewed criticism following claims that its outsourced facilities management contracts are leading to service failures and job losses. In May 2025, HMRC replaced multiple private contracts with two large regional agreements covering the west and east of the UK.
Under the new system, facilities management services were consolidated into single contracts awarded to Sodexo in the west and Mitie in the east. The contracts combine “hard” facilities management, such as building maintenance and repairs, with “soft” services including cleaning, reception and catering.
Savings Achieved but Performance Questioned
HMRC has said the new contracts were designed to deliver cost savings. According to union representatives, bids submitted by Sodexo and Mitie were cheaper than previous arrangements, contributing to their successful tenders.
However, PCS union officials argue that lower costs have come at the expense of service quality. They claim key performance indicators relating to building safety and maintenance are not being met, with statutory checks reportedly overdue at several sites.
Office Closures and Maintenance Backlogs
Concerns have been raised about the condition of HMRC buildings under the new contracts. Union representatives say unresolved safety issues have led to temporary office closures, forcing HMRC to continue paying rent on buildings that staff cannot access.
Reported maintenance problems include broken doors, cracked windows, damaged ceilings, faulty electrical sockets and malfunctioning toilets. PCS claims that unresolved repairs are creating unsafe working conditions for staff across multiple sites.
Staffing Cuts Affect ‘Soft’ Facilities Services
The PCS union says staff providing cleaning and support services are struggling to meet basic standards due to reduced headcount and working hours. Union officials stress that frontline workers are not responsible for declining service levels, arguing workloads have become unmanageable.
According to the union, Sodexo has begun redundancy consultations affecting soft facilities management staff across its HMRC sites. Mitie has also announced job cuts, raising fears of further reductions in service quality.
Union Recognition and Employment Concerns
PCS claims neither Sodexo nor Mitie formally recognises the union, and both companies have refused to engage with PCS representatives. Union officials allege Sodexo may be failing to follow its own redundancy policies and could be breaching employment law.
PCS says it has raised concerns directly with HMRC management but was told staffing decisions remain the responsibility of private contractors. The union argues that this lack of intervention reflects a broader failure of outsourced public services.
Calls to Bring Services Back In-House
The dispute has prompted renewed calls for HMRC to bring facilities management services back under public control. PCS members point to Labour’s election manifesto pledge to deliver “the biggest wave of in-sourcing of public services in a generation”.
Union activists argue the current situation shows outsourcing has failed to deliver long-term value, with taxpayer funds instead being used to generate profits for private firms while public services deteriorate.
Union Strategy and Elections
The PCS Broad Left Network has outlined a strategy calling on HMRC to terminate the contracts and offer affected Sodexo and Mitie staff roles within HMRC on existing civil service terms and conditions. The group also wants PCS to organise for union recognition while the contracts remain in place.
PCS national elections are due to take place later this year, with nominations opening on 15 January. Union activists say the outcome will shape how strongly PCS challenges the government over outsourcing, job security and pay across HMRC.
