Department for Education Offices (Runcorn)

Wednesday 17th April 2013 Westminster Hall

18:45

[Derek Twigg (Halton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I do not intend to take all the time that would normally be taken in such debates, as the hon. Member for Weaver Vale (Graham Evans) has a key interest, because his constituency is affected. Therefore, I will cut down the time I have to speak.

[Mr James Gray (in the Chair)]

That will be quite in order with me, as long as the hon. Gentleman has the permission of the Minister to do so.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

indicated assent.

[Mr James Gray (in the Chair)]

In that case, that is fine.

[Derek Twigg]

The Department for Education announced on 13 November 2012 its intention to close Castle View house in Runcorn, which is owned by the Department as a freehold property. It proposes to transfer the work to Manchester. The Runcorn site accommodates 450 staff, including 222 Department for Education staff, private sector support staff, staff from other Departments—including the Department for Work and Pensions and the Department for Business, Innovation and Skills—and staff from the Children and Family Court Advisory and Support Service, and national health service procurement staff. Civil service jobs—originally with the Department of Employment—have been based at the site, and previously at the building next door, for more than 40 years, providing an important source of good-quality jobs in the borough of Halton.

The Department has identified the following key areas on which to test its proposal: cost and value for money, needs of the business, estates policy, the effect on staff and the wider socio-economic impact. I will address each area individually, but first, what about the overall handling of the issues by the Department for Education? There was no business case on which to justify a closure, and it was made clear to staff from the beginning that it was highly unlikely that the proposal would be changed, despite a consultation being launched later. Even when I, the hon. Member for Weaver Vale and David Parr, chief executive of Halton borough council, met the DFE permanent secretary to discuss the proposal, we came away with a view that the decision was a fait accompli.

I am sure that most independent-minded people would find it odd that there was no business case to base the proposal on. The key arguments made for closure and transfer of the work to Manchester do not remotely stand up to scrutiny, as I shall argue. It is fair to state that the staff and unions have believed for some years that there has been an agenda in the senior management to close down the Runcorn operation for reasons that we could never get to the bottom of. I think the DFE wants the closure now because it fits in with the image that it wants to project of being ahead of the game in Whitehall on how to cut costs, and, therefore, it will be held up as a template for other Departments. The problem for the Department for Education is that the change will not save the taxpayer anything.

In terms of cost and value for money, of the 12 DFE sites, Castle View house is the second least expensive. The cost per person for Castle View house is £2,545. The cost for Piccadilly Gate in Manchester—the building that it is proposed to move the jobs to—when comparing like for like is £4,583 per person. The Department suggests that the refurbishment of Castle View house would cost £500,000. A qualified property survey carried out by Halton borough council suggests that the figure would be nearer to £30,000 to £50,000, depending on whether decoration was undertaken. Castle View house is a modern building with excellent facilities and good IT infrastructure. The Department did not factor in the income from sub-tenants in the figures that it based its original closure proposals on.

I have also been informed today that the Public and Commercial Services Union met the Department on Monday in London to talk about staff relocation costs. The DFE has now accepted that it will have to support Runcorn staff with travel costs of up to £4,250 each year—a significant increase, I understand—to cover travel costs on other, longer routes than the very congested Runcorn East line.

We have not yet seen all the Department’s figures for relocation. The Manchester building that the Department is proposing to move staff to will be demolished as a result of High Speed 2, as I am sure the hon. Member for Weaver Vale will point out, incurring more cost for the taxpayer. Further, we can add to that the cost of running an empty building when a re-let is unlikely, according to Halton borough council, in the short to medium term. The DFE already has an empty site next door to Castle View house.

Let us consider the business need. The suggestion was that Manchester had a wider-ranging skills base, but that has not been evidenced or tested other than by the fact that a number of other Departments are based there. Similarly, the assertion by the DFE that Manchester would attract better staff is flawed—again, where is the evidence? The Runcorn site offers a range of skilled staff, holding degree-level and professional qualifications. The public communications unit at Runcorn offers a centre of excellence. A skills audit by the PCS of its members showed that, among the staff who responded, 139 professional qualifications were held.

It is accepted that Manchester has very good travel connections, but it is quicker to travel to London from Runcorn. There are also local lines to Liverpool, Manchester and Chester. The M56 is only a few minutes from Castle View house and also gives quick access to the M62 and the M6.

On being able to attract and retain good-quality staff at Runcorn, we have only to look back to the heyday of the Runcorn site in the 1980s and early ’90s, when nearly 1,000 staff were employed there. That is a clear indication that staff with good skills can be attracted.

I want to examine the effect on staff. It goes without saying that the morale of this loyal and hard-working work force has been badly affected by the proposal, but also by the way the Department has handled it. The closure of Castle View house will also impact more on the lowest-graded and lowest-paid staff, and those who are made redundant will find it hard to get another job, given the high unemployment in Halton.

The PCS union met departmental officials and representatives of Arriva Trains on 30 January. Arriva has confirmed that it cannot transport the required number of staff from Runcorn East station to Manchester at peak times. I understand that the Department has now accepted that and informed staff that it will explore “alternative options”. There are also few parking spaces at Runcorn East, where staff would travel from. That is a particular concern for disabled staff. A number of staff who live in Halton would have to make two bus journeys to get to the station.

On the socio-economic impacts, Halton is the 30th most deprived borough in the country and the areas that fall within the Halton Lea ward are some of the most deprived in England. Youth unemployment is particularly high in the area. There will be a wider impact on Halton through the largely retail-based employment in Halton Lea, which was known as Shopping City and which relies on the employee daytime population. Castle View house and those employed there are an important source of custom. Therefore, if employment is removed from the Halton Lea ward, wider employment in the ward will suffer. The wider impact on Halton will be worsened by the fact that a large proportion of Halton Lea’s work force live in Halton.

It is important not to forget that Halton Lea is a town centre, not just a shopping centre, and the Government have stated that they want to regenerate town centres. I hope that, when coming to a decision, the Minister will ensure that account is taken of wider Government policy on town centres.

It is important to highlight to the Minister the fact that support for retaining the DFE jobs from both the private sector and the public sector is very strong. That includes Halton borough council, the Liverpool City Region local enterprise partnership—I am pleased that my right hon. Friend the Member for Knowsley (Mr Howarth) is present for the debate—and Halton chamber of commerce.

To summarise, Castle View house is much cheaper to run than the Manchester Piccadilly Gate building. Closing the MPG building would save the DFE more money than closing Castle View house. Closing Castle View house would be an ongoing liability for the DFE. Staff at Castle View house would find it harder to find jobs in the locality. Closing Castle View house puts in jeopardy the other 200-plus non-DFE public sector jobs based there. The socio-economic impact on Runcorn and on the viability of Halton Lea shopping centre will be serious. There are serious issues about Runcorn staff being able to travel to Manchester and about the associated costs.

If, despite what is being said today, the Minister goes ahead and closes the DFE offices in Runcorn, I intend to write to the Chair of the Public Accounts Committee, my right hon. Friend the Member for Barking (Margaret Hodge), to ask whether her Committee will investigate a decision that is obviously a waste of public money.

I am pleased that the hon. Member for Weaver Vale and I had the chance to meet the Secretary of State on 15 January—I am grateful to him—so that he could hear our case against closing Castle View house. I hope that the Minister will now go back and discuss with him the facts of the situation, which are unarguably weighted against the Department’s proposal to shut Castle View house.

18:54

[Graham Evans (Weaver Vale) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Halton (Derek Twigg) oninitiating this important debate, which has far-reaching implications for both my constituency and his own. I thank my right hon. Friend the Secretary of State for Education and his Department for engaging with all concerned parties, including the hon. Gentleman and me, alongside the council and representatives of the PCS union.

I should like to make two key points. First, I shall address the need for savings across the Department—to position the real impact that the closure could have on the Department’s balance books. Secondly, I shall address the human and economic cost that it would have on an area that has the potential to thrive, at a time when we should be addressing unemployment issues, not adding to them.

I do not dispute the need to look for economies, and the Department for Education is no less bloated than other Departments that have ballooned in size to unsustainable proportions. However, those efficiencies need to be just that—the business case must be sound to justify the action. I am convinced that these proposals are not sound. Significantly, there are gaps in both the long and the short-term expectations of savings.

Castle View house has been portrayed as a low-quality building in need of significant redevelopment. That is simply not the case. I have visited the building on numerous occasions, and compared with the wildly varying conditions of other public sector buildings, it is in very good condition, with excellent facilities. Even if a full refurbishment were required, the cost, as set out by Halton council’s response, would be one tenth of the £500,000 suggested by the Department’s review. In reality, the building has the second-lowest overheads of all the Department’s offices and the cost per square metre is just over one quarter of that for the Manchester Piccadilly site.

It is clear that a withdrawal from the area would have a negative impact and make it less easy to re-let or sell in the near future. That is clear from a consideration of other nearby Government buildings that have previously been closed. The overhead costs of Castle View as an unused building are a staggering £382,000 a year. That would swiftly impact on the balance sheets that the Department so desperately wants to correct.

The long-term impact of the decision has also not been considered sufficiently. The High Speed 2 route, which will connect up the country, will have a major terminus in the centre of Manchester, in the location of the Department for Education’s building. Although the line will not reach the city for some time, it is obvious that the building work for such a significant station will take years and result in the vacation of the offices sooner rather than later. That will be hugely costly and would, were the Castle View staff to relocate there, cause significant instability and uncertainty once more. Closing one office in Runcorn, sending staff to Manchester Piccadilly and then moving them again makes no sense whatever. It is clear that the scrutiny that we expect from a detailed analysis is lacking, and I urge the Department to have more foresight.

I should like to draw attention to the impact that the proposal will have on Halton Lea. Although some steps have been taken to produce an action plan for relocating staff to the Manchester branch, it is clear that such a move will leave many behind. Half of Halton Lea falls within the most deprived 5% of the country; the other half is within the bottom 15% and unemployment has risen to 9.4% in the past year. When we talk about closure, we are not talking just about comfortable civil servants having a longer commute—an issue that I am sure that my hon. Friend the Minister will address—but about those at the bottom of the employment scale falling out of work entirely. Service workers at the site cannot relocate, and as I have said previously, the chances of an instant re-let of the building are remote. That is not to mention that the shops and services around the area do not just benefit from but rely heavily on trade from these offices. Footfall at Halton Lea’s retail centre could drop by 20%—a drop that I am sure hon. Members will agree is too significant to ignore.

To summarise, Castle View house is the second least expensive building of the 12 Department for Education sites identified. It has excellent public transport and road links and free car parking on site. Halton Lea’s Castle View house would be difficult to re-let or sell in the short to medium term. Halton Lea is one of the most deprived wards in one of the most deprived communities in the country. Some 85% of the work force are local and it is therefore the most sustainable solution. Most of the people employed there live in the borough. Closure will only add to the borough’s socio-economic challenges. The Manchester Piccadilly site has staff from the whole of Greater Manchester.

When a proposal will change not how a Department is run but how a town will survive, we must look harder and think more clearly. I therefore respectfully urge the Secretary of State to review the plans in the same way as the former Secretaries of State did—namely, the right hon. Members for Sheffield, Brightside and Hillsborough (Mr Blunkett) and for Morley and Outwood (Ed Balls) and the former Member for Norwich South. What is it that they saw in Castle View house that my right hon. Friend, at the moment, does not?

17:49

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

I thank the hon. Member for Halton (Derek Twigg) and my hon. Friend the Member for Weaver Vale (Graham Evans) for securing the debate and for their contributions. Both Members made excellent contributions, which reflected the impact on their constituencies of the future of the Department for Education offices. I am sure that they would join me in paying tribute to the excellence and professionalism of the staff in Runcorn. Indeed, the hon. Member for Halton made a point about the quality of those staff, and I absolutely agree with him.

The hon. Gentleman has always been a passionate advocate for his constituents. I understand that he was an employee of Castle View house when my Department was known as the Department for Education and Employment, so he has personal experience of working at the location and contributing to the work of the Department. I am grateful for the work he has undertaken with my hon. Friend the Member for Weaver Vale in making representations to the Secretary of State, along with Halton local authority and the local branch of the PCS.

I will return to this, but the information that we put out in the initial consultation has been significantly amended, and the information that the hon. Gentleman and my hon. Friend have provided has been very helpful in enabling us to reach a proper decision. Some of what they have discussed was initial information that was our best evidence at the time. In coming to its conclusions, the Department of course listens to representations from people who represent and understand the local area.

[Derek Twigg]

Is it not a real concern that the Department developed a proposal to close down a building and transfer staff to Manchester, based on a flawed case and best-guess estimates, when a local authority and MPs were later able to put together much clearer facts than the Department itself could? Does that not make the Minister worry about her civil service information?

[Elizabeth Truss]

I thank the hon. Gentleman for making his point. It is an open consultation; the decision has not yet been made. We wanted to listen to available evidence, but we put forward the evidence available at the time. His contributions, and those of others, have helped to develop our thinking.

The Secretary of State and I have often spoken in the House about our desire to see a better education system for our children and families, and we have made great strides in achieving that aim, by expanding the academies programme, rolling out free schools and introducing a rigorous new curriculum. Key to success is the hard work and dedication of civil servants in the Department for Education, who are tireless in their efforts to improve our schools and children’s services, but there is always more work to be done. The Department for Education can continue to build on the successes. We want to be the best Department in Government, a Department in which the best and brightest want to work.

We have launched the DFE review, which reported last November and laid out how we intend to achieve our aim. The review proposes fundamental changes to our ways of working, which are designed to make the Department the best it can be. We need to hold ourselves to account to the same standards of use of public money to which we hold schools and children’s services to account. That is important. As a result of the changes, there will be difficult decisions to make. We have a smaller work force, which needs to be more flexible, effective and responsive to future needs, which means that we have to reduce our office space. We currently occupy 12 sites across the country and the review recommended that we consolidate them into just six and move to cheaper accommodation. That is the issue we are discussing today. We do, however, value the regional presence of the Department. It provides an alternative perspective on policy to that of a single London-based office. It provides accessibility for external stakeholders.

[Graham Evans]

Is my hon. Friend aware that Halton borough council has suggested several alternatives to the existing building, based on the consultation? I do not agree with this, but it says that the proposal it is not economic; it is the most expensive option. There are various alternative locations in my constituency that have been put on the table—Rutland house, Vale house, Howard house, Clifton house—so there is no shortage of public sector properties available in Halton. It does not have to be shifted out of the community of Halton Lea to Manchester Piccadilly in Greater Manchester; it could be kept within the community, as there is no shortage of alternative buildings.

[Mr James Gray (in the Chair)]

Before the Minister replies, it might be helpful for hon. Members to know that we expect a Division in the main Chamber, possibly at 7.15 pm or earlier, so we might tailor our remarks to suit that probability.

[Elizabeth Truss]

I thank my hon. Friend the Member for Weaver Vale for his comments, and I am aware of his proposals. We are absolutely considering all available options in the north-west in relation to our package. I understand that both speakers have acknowledged that there is essentially a choice between Runcorn and Manchester. They have put forward a good case about why Runcorn has particular issues of staff quality, employment levels and local regeneration that need to be considered in the decision-making process.

The decision to close any Government site is never easy. I understand the worry and uncertainty of staff who might be affected by the decision. It is a difficult time across the Department when there is such uncertainty. I also understand the concerns of the local community in Runcorn about the site’s future. The consultation is open, but we wanted to be honest about our initial intentions, so that people have time to make representations and preparations.

I acknowledge the points made about the economic impact on the area. Among the factors that we will take into account in our decision are wider central Government policies—for example, the town centre policy that the hon. Member for Halton mentioned—and minimising costs for the Department, which is clearly important to the achievement of value for money. I note the point that both hon. Members made about the availability of more affordable sites in the Runcorn area.

Whichever site is selected for closure, we will put in place comprehensive support for affected staff to help them through the change. All staff will have the option to transfer to work from whichever site is chosen, and we will offer assistance with excess fares. However, for those who either cannot or do not want to make such a move, we have already made a commitment to allow staff to apply for voluntary terms, and we are working with local recruitment agencies and other Government employers in the region to identify alternative employment opportunities.

I shall respond to the specific issues raised in the debate. Following the further representations about cost, vis-à-vis Manchester and the local economic situation, I confirm that they will be taken into account in the final decision. I shall ensure that I discuss the important points made in today’s debate with the permanent secretary and the Secretary of State. The decision is being deliberated on and I alert hon. Members to the fact that we expect it within the next two weeks.

We did not say that Castle View house would cost £500,000 to refurbish. We were talking about bringing it up to the same standard as Manchester Piccadilly Gate. I completely understand the point that the hon. Member for Halton made about alternative accommodation being available in the Runcorn area. We are aware that High Speed 2 could mean that Manchester Piccadilly Gate will be demolished, but that is subject to consultation, and plans suggest that demolition would not be required before 2027, which is after the lease on the Manchester Piccadilly Gate building ends. We will consider the impact of High Speed 2 as part of our deliberations.

[Derek Twigg]

I welcome the fact that the Minister will have a discussion with the permanent secretary and the Secretary of State to consider the points that we have made. I have not heard any argument from her to refute the figures that the borough council and the PCS agree on, which are different from those that the Department put forward. Does she agree that our figures are accurate or does she stand by the Department’s figures?

[Elizabeth Truss]

We are taking into account all the submissions and we will continue to receive and analyse figures before making a decision. When a decision is made, we will release the business case, which will show which figures we ultimately adhered to when making the decision. We are taking account of the points made about other office space being available. I will reflect on the figures in my conversations with the permanent secretary and the Secretary of State. We certainly want to base the final decision on the best available evidence, which may not necessarily be the evidence we presented in the initial consultation.

Question put and agreed to.

19:11

Sitting adjourned.