Department for Business, Innovation and Skills Office: Sheffield

Wednesday 24th February 2016 Westminster Hall

[Mr George Howarth in the Chair]

15:02

[Kevin Barron (Rother Valley) (Lab)]

I beg to move,

That this House has considered the closure of the Department for Business, Innovation and Skills office in Sheffield.

I suppose I ought to say at the outset that I would like the Government to reconsider the closure of the BIS office in Sheffield. The announcement came on Thursday 28 January of plans to start the process to close the BIS office at St Paul’s Place in Sheffield by 2018. It was announced by the permanent secretary for BIS on that day, and it was a complete unknown as far as the workforce were concerned. The closure could result in job losses among the 247 staff in the office. On Tuesday 2 February, the Secretary of State for Business, Innovation and Skills said that the decision had been taken to save money for the taxpayer. As was said later, that really smacks of hypocrisy when the Government hope to build a northern powerhouse.

As my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) said following the urgent question that was taken in the House on Friday 29 January, the day after:

“It speaks to this Government’s London-centric focus and contempt for the north of England that they think a consolidated ‘combined central HQ and policy centre’ has to be, by rights, in London rather than in Sheffield where the operating costs are cheaper and the perspective on UK investment is much broader.”—[Official Report, 29 January 2016; Vol. 605, c. 558.]

I am sorry to say I was not there on the day and, having read Hansard, I deeply regret that, because in all my 30-odd years in this place, I do not think I have seen the word “Interruption” used so much in Hansard, particularly against the Government Front Bench—the Minister seemed to be “on one”, for want of a better expression. It is a great pity that I missed that day; I know that I can now see it on iPlayer, and I may do so at some stage.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

I congratulate my right hon. Friend on securing this debate. I recently attended a round-table of the Confederation of British Industry North West on the powerhouse. The people there did not know, or could not name, the Minister who is responsible for the powerhouse. Does my right hon. Friend agree that that says it all?

[Kevin Barron]

I watched with interest, after the urgent question, the question my hon. Friend asked about individuals in the northern powerhouse and what they felt about this situation, but I will leave that aside at this stage.

We have to look at this against the backdrop of what was reported in the Financial Times. It said that 20% of civil service jobs had been lost in the regions since 2010, as opposed to only 9% in London. That is an extraordinary figure and seems to go against the main thread that we have had—or should have had—in Government circles, not for the last five or six years, but for about the last five decades. I remember very well the advanced manufacturing park near Sheffield, which was a glowing example of what Governments can do if they have an intention to do it. When I represented part of it, I was lobbied on several occasions when some massive offices were going to be built on the advanced manufacturing park—which is actually in Rotherham, but on the edge of Sheffield—on the basis that thousands of civil service jobs were supposed to be going there. Of course, that never happened, unfortunately.

We can also put this into perspective by considering infrastructure expenditure in the north, which stands at £539 per head, as opposed to £3,386 per head in London. When we are presented with such statistics, it is no wonder that people say that this concept of the northern powerhouse is little more than words.

This move is all about, I believe, accommodating large reductions in headcount and nothing to do with the Department’s core function of boosting business. I have been contacted by several constituents regarding the closure. One of them says:

“I’ve worked in the civil service for”—

I am going to say that this person is now in their third decade in the civil service—

“ten years in London and the rest in Sheffield. For the majority of that time, I have worked in teams that have been split site between Sheffield and London. To my knowledge, there has never been any issues regarding the quality of work or negative impact on policy decisions/policy work due to operating split site teams.

Aside from the obvious impact on me personally with respect to having to find another job, I am concerned about the effect this decision will have on the City of Sheffield and surrounding areas. I am still trying to understand why the Department for Business would take such a step.”

This announcement comes alongside the recent announcements by Her Majesty’s Revenue and Customs about job cuts, and the fact that funding has been withdrawn entirely from the UK Commission for Employment and Skills, which is based in the constituency of my right hon. Friend the Member for Wentworth and Dearne (John Healey) and which is part of the BIS 2020 initiative. Words fail me. What should have been happening for decades in this country now seems to be in reverse. These announcements clearly send out completely the wrong type of message to large businesses that might be looking to invest in Yorkshire or other northern cities and towns.

[John Healey (Wentworth and Dearne) (Lab)]

Is not the answer to the question that my right hon. Friend’s constituent put—“Why?”—that this is about crude number-cutting of budgets, jobs and offices? At a time when knowledge of economies outside London and support for the creation of jobs and businesses outside London is needed more than ever, surely this is a short-term decision that will also prove to be counterproductive.

[Kevin Barron]

I completely agree with my right hon. Friend’s analysis. The decision is completely at odds with this concept—it is not much more than a concept—and promise of money of the northern powerhouse. Under the circumstances, these are the worst signals in the world that central Government could send to the north.

Not only will the closure be devastating for South Yorkshire; it will lead to a huge loss of expertise for the Department—for example, the person I have just quoted, who has been in their job for decades. The idea that they can uplift and come down to work in London, even if they could afford to buy a property in London, is a very difficult thing to imagine.

Nick Hillman, who was formerly a special adviser to David Willetts during his time as universities and science Minister, has described this closure as

“a genuine tragedy for good public policymaking.”

He says that the Sheffield civil servants

“hold BIS’ institutional memory on HE and often know more than the policymakers who are nominally closer to the centre of power.”

The staff in Sheffield work closely with external organisations, such as employers and education providers, visiting them to explain policies about funding, deregulation, further and higher education, and Government strategy on rail, as well as listening to their issues so as to better inform policy. Having purely London-based staff will mean additional costs, particularly as a result of pay differentials and a less prompt service for organisations based in the midlands and the north. Gone will be the knowledge and understanding of localities, sectors and industries that can make a difference to effective policy making and allocation of funding.

I have spent more than 30 years in this Parliament now, and for most of that time I have heard many people who believe—people from all parts of the House; Ministers of all political colours, as if they do not recognise it—that north of Watford is a strange land. Bringing more people down from the north to work in London will just bolster that attitude and, I have to say to the Minister, that is fundamentally wrong.

Sheffield staff are also responsible for applying ministerial strategy and policies on the ground. For example, BIS sites such as the Sheffield site ought to be in the vanguard of helping the Government to rebalance the economy and supporting such rebalancing in the sectors that are most prevalent in their respective regions. It seems particularly strange that BIS, with its supposed ambition to create more geographically balanced growth, should take this decision, when other Departments, such as the Department for Education, plan to remain in Sheffield. Can the Minister explain that to us—not just to the Members from Sheffield who are here today, but to other Members from the region as well?

Another constituent drew my attention to the fact that BIS Sheffield has recently advertised for a level 3 apprenticeship in the very office that the Department is planning to close in 18 months. In fact, the closing date for the apprenticeship applications is today—I have the advert with me, and the closing date is 24 February. The post is fixed-term for 18 months from April 2016. There is no mention at all of the office closing in 18 months, so any hope of a permanent job at the end will be non-existent. Indeed, to be honest, who would really want to work in that atmosphere of despondency and anger? I find it hard to understand the mentality or the morality of carrying out such an exercise in the current climate—and, of course, it costs public money as well. Under the circumstances, it seems wrong.

The comments made by the right hon. Member for Broxtowe (Anna Soubry) in response to the urgent question on 29 January stick a little in my throat. She said:

“As I say, in difficult times when we have to make sure that we continue with our long-term economic plan, difficult decisions have to be made, but we take the view that this is the best way to spend public money more efficiently and more effectively.”—[Official Report, 29 January 2016; Vol. 605, c. 562.]

If that is the case, it is simple. My understanding is that a report was written about the “BIS 2020” initiative. It was about the closure—not just of Sheffield, but potentially of some other regional offices as well—but it has never seen the light of day. I say this to the Minister, and to the Government: I do not blame the Minister. That report was created by public money and we have the right to see the business case for the change. And I will tell you who has the right to see it more than anyone else: the 247 people who have this cloud hanging over them. I urge the Government to publish the facts, so that we can properly review the decision.

14:41

[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to contribute to this debate with you in the Chair, Mr Howarth. I congratulate and thank my right hon. Friend the Member for Rother Valley (Kevin Barron) for securing this debate on the closure of the office. The office is in my constituency, but the closure has a far wider impact, and that is reflected by the Members here from across the region. It is a blow not just for Sheffield, but for a region that has been trying to engage positively with the Government on the northern powerhouse. I hope that the Minister will engage positively with us on the concerns that are being expressed.

I have some sympathy with the Minister; the decision seems to have been driven by senior managers—I am delighted to see the permanent secretary here—but it is falling apart under scrutiny. Ministers have been put in a difficult position. They have been briefed, and when my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) asked her urgent question, Members were told that the decision has been taken to save money. Meanwhile, staff in the office in Sheffield have been told that there has been no cost-benefit analysis. Under questioning at the Business, Innovation and Skills Committee on 10 February, the permanent secretary as much as admitted that there was no business case for the decision. It is not too late, however. The Minister is a thoughtful man, and I hope that he will approach the issue in the same way as he has his Green Paper on higher education—we have discussed it on many occasions—listening to concerns, sharing them with his colleagues and agreeing to an open discussion of the options.

The House of Commons Library’s briefing for the debate described the Sheffield office as one of a number of regional offices and somehow mixed it up with the network of 80 offices. I have raised that issue with the Library, but for the record, we must be clear that the Sheffield office has a head office function that happens to be taking place in Sheffield, and for good reason. I have spoken to a number of the staff in the office, and they are shocked not simply that their jobs are being taken away, but that those jobs are going without a single good argument being advanced in defence of the decision. They are senior policy staff, and they help make Government decisions. They are used to looking at evidence, evaluating it carefully and advising Ministers, and they are shocked that the rules about effective and responsible decision making have not been applied to them.

The staff have many questions, and I will start with four that I would like the Minister to answer. First, why does the 90-day consultation period not include consultation on the rationale to close the Sheffield office? Secondly, why does it not give those affected the chance to examine the business case and discuss alternatives? Thirdly, why does it not invite alternative proposals for other models that would work well for Government and provide best value for taxpayers? I have some more questions later, but the final one for this cluster is: why does the documentation state that the 90-day consultation closes on 2 May 2016 when it also states that a final decision on the closure of the Sheffield site is planned by the end of March? That is five weeks before the consultation closes.

People in the office and more widely in the region are genuinely bewildered. This Government talk about the northern powerhouse, are supposedly committed to a diverse civil service and regularly talk about value for money, but in the case of the Department for Business, Innovation and Skills, apparently they want all their policy jobs to be based in the most expensive city in the country because—this may not be the case, and the Minister can clarify things, but it is what staff have been told by senior managers—Ministers cannot be supported by people based elsewhere. Frankly, it just does not add up.

On the business case, I recognise that the Minister is in a difficult position, because the permanent secretary was unable to share any facts on which the decision was based. The first line of the restructuring proposal form, which was sent to all staff on 17 February, makes the case for the decision. It states:

“BIS is required to make significant savings by 2020.”

I have a simple question for the Minister—I hope he can succeed where the permanent secretary failed at the Select Committee— which is this: how much money will the proposal to move all policy jobs to London save? If he wishes, he can intervene on me now.

[The Minister for Universities and Science (Joseph Johnson)]

I will come back later.

[Paul Blomfield]

I look forward to the answer. The civil servants whose jobs are on the line as a result of the decision are familiar with the concept of making savings for the public purse. They are engaged in that very pursuit in delivering the Government’s agenda on apprenticeships and further and higher education. They work within strict financial constraints, but were they to make a proposal without any evidence of the budgetary implications, the Minister would agree that they were not doing their jobs properly. Why are the Government, elected on the back of a promise to supposedly balance the books, so reluctant to publish the business case for the decision? I fear, from my exchange with the permanent secretary during his appearance before the Select Committee, that it is because there is no such document and no such business case. Will the Minister clarify the basis on which the decision was made, if not to save money?

In the documents that have been published, the proposed “combined regional footprint” that will remain—this is mentioned in the restructuring proposal form—

“the FE funding centre (location yet to be decided)”,

the HE funding centre and

“possibly a regulation centre in Birmingham”

are all part of the new vision. How much will all those things cost? We do not know. We do not know because the Department does not know, but how on earth can they be less expensive?

The Government’s own estate strategy, which was published in 2014, points out that the cost of space in Whitehall is expensive. It cites the Ministry of Defence main building at a cost of £35,000 a year a person, compared with the Home Office buildings in Croydon at £3,000 a person. That is less than a tenth of the cost, and Sheffield is less expensive still, and that is before we take account of central London weighting and the extra staffing costs involved. The decision, which has huge consequences for my constituents, the city and the region, has been made on the basis of so little fact and evidence.

There is a wider issue, which my right hon. Friend the Member for Rother Valley alluded to, about the way that this country is run. There is real value in locating policy making in the regions and nations of Britain. That is why successive Governments have moved Departments out of London. I remember when the Conservatives under Margaret Thatcher moved the Manpower Services Commission to Sheffield in 1981, and such moves continued under Labour. That policy stalled under the coalition and is now thrown into reverse. Before the Minister wheels out the line that more BIS jobs are based outside London, let me remind him that the focus of this debate is on the highly skilled policy jobs that are at the centre of the decision.

Too many decisions in this country are made through the prism of the personal experience of people who live, work and bring their families up in London. The rest of the country is different. We need more people who live their lives, like most of the population, outside London bringing their experience into policy making. The Department for Education carried out its own review of its estate. The review stated:

“We benefit from maintaining sites around the country—we get alternative perspectives on our policy issues, we can draw from a wider recruitment pool, and employing people in sites outside London helps to keep costs down.”

If that is important for the DFE, why does it not apply to BIS? The Minister risks his own goals if he loses some of his most experienced staff just as he embarks on an ambitious programme in higher education. My right hon. Friend the Member for Rother Valley cited the special adviser of the Minister’s predecessor, David Willetts. His special adviser, respected by all parties in Parliament, described the move as

“a genuine tragedy for good public policymaking.”

Is the Minister not concerned about the loss of talent? I hope he will come back on that point. What assessment has he made of the loss of jobs on the successful delivery of the policy agenda for higher education, further education and apprenticeships?

There is another issue about creating a diverse civil service. Earlier this month, Cabinet Office Ministers launched the Bridge report to achieve the Government’s stated aim of creating,

“a public sector that reflects the diverse nature of the UK”.

They launched it with a fanfare, and the head of the civil service, Sir Jeremy Heywood, said:

“The Bridge Group report offers potential nuggets of gold, not just for the civil service but for the UK...The problem is that talent is everywhere but opportunity is not.”

One of the plans arising from that report to address inequality in the public sector states that we need

“new terms in place which make it easier for civil servants to live outside London.”

How on earth can the Government square that circle? Where is the joined-up thinking?

The Bridge report also found that the number of people in the civil service from poorer backgrounds is shockingly low, with only 4.4% of successful applicants coming from working-class backgrounds. Does the Minister think this move will increase that figure? What equality impact assessment has been made of the decision? It cannot be right that we restrict opportunities to those who can afford to live and work in London, and who have the option to do so without commitments elsewhere. The Government could massively reduce the talent pool from which they recruit with this move, so why are they narrowing their options?

Staff in Sheffield have been told by BIS board members that the reason for the move is because Ministers want them close by. I do not believe that. I think Ministers are more open-minded and more innovative than that. It runs counter to the Government’s own estate strategy, published in October 2014, which stated:

“Civil servants should be able to work flexibly across locations at times that are convenient to them and their managers”.

It went on:

“Some parts of the civil service and the private sector still have an inflexible, command-and-control model where people are managed more by their presence than by achievement.”

The decision seems to confirm that that is how BIS wants to continue to run itself.

The killer blow to the rationale for this decision is at the bottom of page 11 of that document:

“With modern IT, officials no longer necessarily need to be physically present, for example to brief ministers.”

I am sure the Minister will concur with that point. Has this decision been taken behind closed doors because somebody had the bright idea that it might be easier for Ministers if they sit on the floor above their policy people rather than pick up the phone, use the video link or plan meetings in advance? No assessment has been made of the expertise and experience lost; of the impact on access to and diversity in the civil service; or of the way in which decisions are made in this country, never mind the cost to the public purse.

Finally, let me reflect on the thoughts of the Department’s most senior civil servant, the permanent secretary Martin Donnelly. It is good to see him here. Almost a year ago to the day, he published a blog post on his experience after the Department had undergone huge change back in 2011. The title of the piece is, “Leadership Statement: Talk less, listen more”. I have a copy that the Minister might want to share afterwards. Mr Donnelly writes that,

“people felt that the process has been done to them not by them.”

He was right. It was a problem then, and it is a problem the Department is on the brink of repeating now. But it is not too late. I urge Mr Donnelly and the Minister to listen to the hugely talented civil servants based in Sheffield. I urge them to listen to the head of the civil service, whose statement, made less than a month ago, I make no apology for repeating:

“Talent is everywhere but opportunity is not.”

I hope that the Minister will confirm today that the Government will publish the papers that have informed this decision and I hope he will commit to reviewing it. Is that really too much to ask?

[Mr George Howarth (in the Chair)]

Order. To accommodate everyone who has indicated that they want to speak, I am imposing a seven-minute time limit on speeches.

14:02

[Sarah Champion (Rotherham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I apologise to you, to the Chamber and to the Minister because I will have to leave before the end of the debate owing to constituency business.

The decision to close the Business, Innovation and Skills office in Sheffield feels like the latest example of Tory scorn for the north. Yet again, we are faced with major job losses in the north as a direct result of the actions of a Government seemingly unable to look beyond the confines of London and the south. We have 247 staff now facing redundancy, having been informed that their jobs would be moving to London. The Government have described this as a transfer, yet they offer no guarantee that those affected will be allowed to transfer if they so wish, only that they “may be able to”. For those facing such uncertain futures, that is small comfort.

In her letter to me, Baroness Neville-Rolfe acknowledged that the Department is

“very likely to take the opportunity to make some of the significant headcount reductions”

that the budget requires. The Department has said that staff will receive comprehensive support, but we do not yet know what the support will involve. We do know that it will most likely not include any financial support for either travel or relocation costs. In effect, the Government’s commitment to staff amounts to a promise that they might be able to keep their jobs but, if they do, it will be at their own expense, and very likely a significant expense.

The Government’s statements are contradictory. They continue to talk of a transfer. I found Baroness Neville-Rolfe’s words to me to be very telling. She said she would “take the opportunity” to cut jobs. Do the Government really see a huge job loss in the north as an opportunity? Yet again, they label this as a transfer. To do so is deeply disingenuous. This is a job loss, plain and simple. The irony that the Department responsible for the delivery of the northern powerhouse should choose to divert jobs from one of the great northern cities to London is inescapable and sends entirely the wrong message.

Repeated reviews, most recently the Lyons review in 2004 and the Smith review in 2010, have recommended that the Government should decentralise the civil service, as my colleagues have been saying, both to provide better value for money and to enhance career progression outside of London. Yet the proportion of civil servants based in London has increased from 16% in 2010 to 18% in 2015, a move in entirely the wrong direction. The proposed reduction in BIS staff equates to almost 5% of the total civil servants in the city of Sheffield. This is on top of the previously announced closure of Sheffield’s HMRC building, with the loss of 500 jobs.

The St Paul’s building is currently shared by BIS and the Department for Education, with a number of other Departments basing small numbers of staff in the premises. The closure of the BIS office represents a loss of approximately a third of the current workforce. That will inevitably affect the feasibility of the remaining departmental offices, risking yet more job losses. BIS’s other regional offices face an uncertain future, with the risk of more redundancies in the Department’s northern offices. The Government are choosing increasingly to withdraw from the north while simultaneously offering platitudes of support for the northern economy. That has serious consequences not only for the staff who are directly affected but for the wider community and economy.

Each time a decision such as this one is announced, the Government resort to the same old tune. They talk of efficiency savings and the need to provide better value for money, but let us be clear about what is proposed: the Government are moving jobs from the north to London, one of the most expensive cities in the world. To justify the decision on their own terms, it would be reasonable to expect that a detailed business case had been conducted and all possibilities fully explored before we reached this point.

[Mike Kane]

My hon. friend is making a very powerful point. Does she agree that this decision lacks vision, guts and gravitas? That is particularly true when it is compared with the decision to move parts of the BBC to Salford, which in terms of transferring jobs from London to the north has been one of the greatest success stories. We remember the problems and the noises off in the press at the time about how bad that decision apparently was, but nobody looks back on it now as a bad decision, just as they do not dismiss the resulting efficiency savings and service improvement. The same can be done with the decision on the BIS office.

[Sarah Champion]

This decision shows a complete lack of common-sense, along with everything else. The Government have still not released a detailed study. Indeed, as the permanent secretary suggested under questioning from my hon. Friend the Member for Sheffield Central (Paul Blomfield), such a report may not even exist. It beggars belief that the jobs of 247 dedicated staff should be threatened when no business case whatever has been made. I echo the call made by others today for the Government to publish the evidence that underpinned this decision without further delay.

The north has borne the brunt of the Government’s ideologically driven agenda, as it did the last time the Tories were in power. Time and again, we see the Government taking actions that hit the north disproportionately hard. Most recently, they announced a £300 million transitional fund to help local authorities that are struggling to implement Tory cuts. It speaks volumes that the five least deprived local authority areas will collectively receive £5.3 million, while the five most deprived will receive nothing. Each of the five areas most in need are in the north.

Sheffield City Council’s central Government funding has fallen by almost 50% since 2010. From the ever-deeper cuts to local authority budgets to the abject failure to support the steel industry, the Government have shown disdain for the north. A long line of examples show up the empty rhetoric of the northern powerhouse. The Government are delegating cuts to the north and calling it devolution.

15:03

[Louise Haigh (Sheffield, Heeley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I, too, congratulate my right hon. Friend the Member for Rother Valley (Kevin Barron) on securing the debate.

It is good to see the Minister in his place. This is the second time that a Minister has had to be dragged before Labour MPs to account for the decision on the Sheffield BIS office after the shoddy, shocking way in which the announcement was made. There was no consultation or wider strategy; just the permanent secretary turning up on a Thursday morning and a low-key press release on the Government website later that day. So far, we have heard a good deal of rhetoric from Ministers but not a lot of genuine debate.

I hope that today will change things, that the Minister will reflect on this decision, and that we can have a thoughtful conversation, because the workers at risk of being laid off, who I know will be watching closely today, see a plan that, I am sorry to say, seems to be based on assumptions and tired thinking not fit for a Department that is supposed to be preparing us for a century of innovation and change. They see a decision that, as we have heard, is not backed up by a business case that looks at the decision to close the Sheffield BIS office alone and what the office brings. After all, it differs significantly from local offices throughout the country—something Ministers do not seem to have grasped entirely when they signed off the BIS 2020 plan.

As my hon. Friend the Member for Sheffield Central (Paul Blomfield) asked for during the Business, Innovation and Skills Committee hearing, after his request for a comprehensive document was rebuffed, any scrap of paper will do—any shred of evidence or jottings on the back of a fag packet. It is clear that nothing has been forthcoming, because we have received nothing at all. As my hon. Friend asked: how much money will this decision save? It is hard to see it saving a single penny of taxpayers’ money, not least because the lease for the office will still be held by the Department for Education, as my hon. Friend the Member for Rotherham (Sarah Champion) said.

This is a serious problem. If the Government are to demonstrate any genuine commitment at all to the northern powerhouse, they will have to move away from the lazy assumptions that underlie the justifications for keeping policy making in London Departments, move away from the belief that London water-cooler conversations matter because they take place in close proximity to Ministers, and move away from the belief that the intangible benefits far outweigh historic knowledge of an area and a different perspective on investment in a northern hub.

The Government have shown wanton disrespect for the workforce at the Sheffield office, giving flimsy justifications. First, they were told that the decision was based on saving money, which, as we have heard, will be next to impossible. Then, it was about policy. At a later meeting, it was because the phones and computers did not work properly—this at the Department responsible for innovation, in the 21st century.

The decision reveals tired thinking from senior Whitehall officials who, when asked what they wanted the Department to look like in 2020, came back with the same old Whitehall answer: a centralised command and control HQ, based in London, where all employees are within eyesight and earshot and fresh perspective is discouraged. When devolution of power and resources is supposed to top the agenda, the Department cannot seriously take a Kremlinesque approach to policy and decision making.

How can we expect a centralised HQ issuing orders from London to have the same insight and perspective on regional investment as we currently enjoy in Sheffield? That perspective has been built over years of working and living in the community and comes with an historic understanding of what works and why our northern regions are so very different from London. It betrays the Government’s thinking. When push comes to shove, they have instinctively retreated into their comfort zone, insulating themselves in a London bubble. It says a lot about where the northern powerhouse comes on their agenda that they would prefer civil servants to be close to Ministers rather than providing a distinct perspective on investment in Sheffield.

The water-cooler conversations at BIS must be pretty good, because this decision is so at odds with the supposed direction of travel across Government. The estates report mentioned by my hon. Friend the Member for Sheffield Central not only found that the cost of space per individual is in Croydon a tenth of what it is in Whitehall, but that the cost of each individual is about 27% higher in London than in other areas of the country, and that the previous Labour Government saved around £2 billion by moving 20,000 civil servants out of London.

Six years after the Smith report said that ministerial behaviour was crucial in overcoming what it termed the “London magnet” and relocating Whitehall, we now have a BIS Secretary doing the exact opposite. The report, which was published just before Labour left power, had at its heart a direction of travel that would move civil servants out of Whitehall to bring the Government closer to the people and stimulate economic vibrancy.

Senior officials categorically admitted to Sheffield employees that they did not even think about the effect on the local economy when they were making their decision, an oversight that flies in the face of years of Government policy, in which the move to cities and regions outside London was supposed to be a standard-bearer for businesses to follow. If the Minister thinks that the author of that report, Ian Smith, was not talking about types of policy roles such as those in Sheffield when he spoke about “ending the London magnet”, he is wrong. In fact, Mr Smith argued that

“power and career opportunities will only truly move out of London when significant parts of the core policy departments are moved.”

Senior BIS officials must have great hopes for the benefits of these water-cooler conversations if they are to override the clear direction of travel of Government; if they outweigh the huge costs, not only per individual employee but of the loss of historic knowledge and perspective in Sheffield; and if they outweigh the terrible message that this sends about concentrating power in London to businesses hoping to locate to a region that BIS is supposed to be helping to grow.

I imagine that even the Minister agrees that the business justification for the Sheffield closure is flimsy, so I want now to turn to why it is so important that we do not lose these jobs in Sheffield. In the near six weeks since the decision was announced there has been no acceptance of the unique position of this northern policy centre. The Sheffield BIS office is unique. It is part of the headquarters—the only office outside London carrying out the high-level policy functions that civil servants in Whitehall also carry-out, such as analysis of evidence, project management and stakeholder engagement.

In trying to justify the decision, the BIS Secretary was adamant that his plan will continue the existing arrangement where more of his civil servants will be outside of London than inside. I am sorry to say that he either does not get it or is being disingenuous. The description of his Department in an internal advert tells the truth. It says:

“the vast majority of the 2,300 directly employed staff at the Department of Business, Innovation and Skills are based in London”.

That was written before the Sheffield closure was announced. The vast majority—96.7%, as I discovered in a recent parliamentary question—of the Department’s senior civil servants are based in London, as are almost all of the core BIS office staff. If you think I am leaping to—

[Mr George Howarth (in the Chair)]

Order. I call Deirdre Brock.

15:10

[Deidre Brock (Edinburgh North and Leith) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Howarth. Please excuse my voice. I hope hon. Members can hear what I am saying.

I have to admit that I was surprised when it was revealed at the end of last month that Sheffield is too far north to be part of the northern powerhouse. It struck me that Private Eye might know something about it being grim up north London—about the hardship, the economic disadvantage that sometimes seem overwhelming and the deprivation, compared with the easy street life in Yorkshire. What Government could stand idly by and see such inequality last? There was apparently no choice but to move jobs to compensate, so the northern powerhouse is powering south, like so much else in the UK, and being sucked into the black hole that is London and its surrounds.

This decision, we are told, is part of a move to streamline services, centralise staff at BIS and ensure that Ministers have easy access to the knowledge and skills of staff. Is there some difficulty with the internet reaching Sheffield, I wonder? Ministers cannot be uniquely unable to use email and other electronic communication. I bet there are enough people already in London who would be willing to give them the benefit of their personal wisdom.

If this is about cost-cutting, I really cannot understand why staff are being moved somewhere where they have to be paid the London weighting and where office space is ridiculously overpriced. Surely the sensible thing to do would be to close the expensive offices in London and centralise the staff in Sheffield, Doncaster, Leeds, York or indeed anywhere outside the south-east of England—especially, for goodness’ sake, when they are working on the northern powerhouse. That might make sense.

While we are on the subject of north and south, I hope I will be excused a little detour to point out that the northern powerhouse is not very northern. It is quite a bit south of my constituency, a heck of a distance south of Caithness and Sutherland, and nowhere near Shetland. In fact, Sheffield is three times further away from Inverness than it is from London. It is 140 miles to the capital of the south-east and 409 miles to the capital of the highlands—and that is if there are no diversions. We will keep in mind that it is the northern England powerhouse and forgive the oversight.

The suction that continues to take jobs south needs to be addressed urgently. About one fifth of all civil servants are based in London, according to the Library’s “Civil Service statistics” briefing paper, and another 10% are in the south-east of England. Even Scotland, which runs a whole lot of parallel systems to the UK civil service, has only 10% of the overall headcount. Scotland, of course, is very efficient, but it is clear that there is no great spread of civil service employment. Despite the rhetoric about moving civil service jobs out of London from the Government and, to be fair, their predecessors, the jobs have stayed in London—even those that should be elsewhere—and some are actually moving back to London.

The Department for Business, Innovation and Skills might be too costly to run, too complicated, inefficient and possibly even unfit for purpose, but centralising it in London cannot be the answer. If the Mayor of London is correct and London is a thriving, innovative city, bursting at the seams with businesses hungry for skilful people to work in them, surely it would simply be better for BIS to get out of the way and let them get on with it. If he is wrong and London is struggling to attract businesses, Government Departments should get out of the way to reduce pressure on office rental prices. Either way, Sheffield is surely a better call than London for a Government office.

Of course, this is what the Mayor of London actually thinks:

“the success of this city cannot be taken for granted: the jam from London must not be spread too thinly over the dry Ryvita of the regions.”

That kind of whiff-whaff helps no one. The truth is that sucking public spending into London while the rest of the UK bites down hard on austerity is damaging for every community on these islands. Superheating the London economy does not help ordinary Londoners, who are being pushed out of their own city by living costs and who see their communities destroyed to provide for affluent incomers. Pulling civil service jobs into the south-east of England does not help young professionals who are trying to get ahead and make something of their lives. There is no policy imperative or cost consideration that requires them to be sent to London, and no public good that would be fulfilled. There is no real reason at all for their being in London.

There is time and space for the decision to be reconsidered and for those staff to be located somewhere far more suited to the job they will be doing, as many Members said. Ministers have a chance to do something sensible for a change. There is time to change tack and to do something useful. Instead of running Sheffield down, build it up. Increase the staff there, give the office a boost, give Sheffield a boost with it and give London a break.

15:15

[Mr Nick Clegg (Sheffield, Hallam) (LD)]

I am grateful for the opportunity to voice my dismay at this decision. I thank the right hon. Member for Rother Valley (Kevin Barron) for securing this debate.

As the Minister knows very well, I am the last person to object automatically to decisions relating to savings in public spending. In fact, I spent half a decade defending decisions for which many hon. Members developed a political cottage industry of blaming me personally—[Interruption.] They nod as sanctimoniously now as they condemned me then. That’s history, as we say, but that gives me a certain credibility when I claim that I look at this decision with a degree of objectivity. The political subjectivity, of course, comes from the fact that a number of my constituents in south-west Sheffield have been directly affected by it.

All of this stems from the BIS departmental settlement with the Treasury in the spending review in late November 2015. That is the origin of the decision. I want to dwell on why the decision was made in the way that it was, why the Treasury delivered cuts to BIS on such a scale, and why they cascaded down to have such a disastrous effect on Sheffield and the many dozens of BIS employees in the Sheffield office.

I thought to myself, “Perhaps it is because the new Government decided to protect more non-BIS Departments in Whitehall.” In other words, perhaps the knock-on effect—the budgetary pressure—on BIS is more remorseless than it was during the five years in which I was Deputy Prime Minister. During that time, we fought to defend a number of BIS programmes, notwithstanding a number of very controversial BIS financial savings. Actually, on closer scrutiny, I found that, far from there being additional protections, some of the protections have been relaxed. For instance, under the coalition Government, and at my personal insistence, schools spending was protected in real terms. It is now not protected in real terms under this Government. There is no wider Whitehall reason why the knock-on effect on the BIS budget should be so much greater than it was in the past.

Then I thought to myself, “Perhaps, to be very fair, this difficult decision can be justified if savings are made”—although I very much tend to agree with what was said earlier. I find it difficult to see any significant material savings from this decision, but let us give the Government the benefit of the doubt. If there are savings, perhaps they are being channelled elsewhere to protect some of the other important BIS initiatives and projects. But no, I discovered that it is part of a much wider cull. In the wider context of the other things that have been scrapped—the Business Growth Service, the Manufacturing Advice Service and the growth accelerator programme—it is more, rather than less, inexplicable. In other words, the savings in that area of the BIS budget are not being recycled to protect other areas.

I looked at the figures, which are, as ever—now that I no longer have the excellent help of legions of civil servants—quite difficult to get hold of. The figures that I was able to get hold of from the Institute for Fiscal Studies and the House of Commons Library show something very revealing indeed. Under the Government of 2010 to 2015, the reductions in the BIS budget, when compared with other Whitehall Departments, put it about mid-table. Some Departments had more generous settlements and roughly the same number had more reductions. The reduction, which was very significant and led, for instance, to some of those agonising decisions on higher education spending, was just over 18%, according to the Institute for Fiscal Studies. In cash terms it was well below a £4 billion saving.

In the latest league table showing where, in the Whitehall jungle, money has been saved in the greatest amounts following the Chancellor’s announcement in late November, BIS leaps from mid-table to the position of having the second-largest cut. The cut of 18% under the previous Government has shot up to 26%, well over £4 billion. My central assertion is that that is a choice—not an inescapable guillotine. Perhaps I may say gently but firmly to the hon. Member for Sheffield Central (Paul Blomfield), who has done a great job of highlighting the injustice of the decision, that he was very unfair to point the finger at the permanent secretary. The decision was a political choice by the Secretary of State for Business, Innovation and Skills, who was keen to be top of the class in the Chancellor’s Whitehall fan club by delivering the earliest and biggest savings—in my view, excessive savings—to the Treasury when, as I found out over five years, Whitehall Departments are asked, as in a game of pass-the-parcel, to make savings.

That is why I ask the Minister to confirm that the genesis of what is happening was a political decision—not by him but by the Secretary of State—to do more than his duty to the Chancellor, and to deliver such big cuts from BIS that it shot from the middle to second from top of the Whitehall table. The decision was unnecessary and did great damage to a number of other important BIS programmes. It is now doing considerable damage to the livelihoods, families and fortunes of hundreds of people in Sheffield and South Yorkshire.

15:02

[Mr Clive Betts (Sheffield South East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my right hon. Friend the Member for Rother Valley (Kevin Barron) on obtaining the debate, and my hon. Friend the Member for Sheffield Central (Paul Blomfield), who did an excellent and thorough job of taking on the paucity of the Government’s thinking on and explanation of the decision, and their business case. In passing I would point out to the right hon. Member for Sheffield, Hallam (Mr Clegg) that the key point my hon. Friend was making was that we have not had an explanation showing any savings. We do not know that that is what has driven the decision, and it would be helpful if the Minister would explain. I also thank my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) for obtaining an urgent question straight after the announcement. That was excellent, although from what I understand we do not seem to have made much progress since then.

The decision is about real people, who have lost their jobs. Darren Shepherd and his colleague Alison came to my surgery on Saturday because they are going to lose their jobs, and they are worried. They are frightened for their families’ future. They said to me, “Why is this happening, Mr Betts? Can you tell us why?” I said, “Well, I’m sorry, I can’t, because nobody has told me why.” That is not an adequate position to put people in when they work hard for the Government and the country, doing a variety of jobs. They do not know why and no one can explain it to them. That is the fundamental question that we are asking today. As my hon. Friend the Member for Sheffield Central said, it is of benefit to the civil service to have a wider pool from which to draw talent—and it is beneficial to the Government, the people doing the jobs, and the city of Sheffield. The Government will have to work hard to convince us on any of those counts that it was the correct decision to take those jobs from Sheffield and move them to London.

I do not want to say more about the particulars of the staff and their situation, or about the diminishing of the wider pool of talent, although I look forward to the Minister’s reply on those points. I want to make a few points about the Government’s commitment to devolution. I am the Chair of the Communities and Local Government Committee, which has just produced a report on devolution. We unanimously said:

“We strongly support the principle of devolution. We welcome the fact that, at the start of this new Parliament, it occupies such a prominent position on the Government’s agenda.”

I agree with that. It is not a party political issue but a commitment to devolution. I welcome the Government’s move in that direction. We also said:

“The Devolution Bill is just one part of enabling devolution. There also needs to be an enthusiasm for it across all Government Departments and a commitment to it as the ‘default position’”

and that we

“would like to see a culture of devolution embedded in all Government Departments”,

an annual report about what Departments do, and an opportunity for local authorities to report back on the Government’s commitment to devolution and rate their experience of different Departments. I do not think BIS will get many stars from Sheffield City Council in the devolution report.

If we are to have devolution in what is the most centralised country in western Europe, it cannot be left to the Department for Communities and Local Government to do very good deals with councils, including those in the Sheffield city region; the whole of Government must be signed up for it. Therefore, what we are talking about is not just a matter of substance in relation to BIS and its operation, and people’s jobs, important though those are—and I will fight hard for my constituents involved in the process—it is also symbolic of the whole Government and their attitude towards devolution. Is devolution a matter of a few deals with local government, or is it a matter of Government policy to which the whole Government, including BIS, is signed up? If it is about a balance and a few pounds of cost difference here or there, or the slightly greater inconvenience for Ministers of getting on the phone or using a video link, the balance must come down in favour of the jobs in Sheffield, as a fundamental indication that the Government are committed to devolution, to pushing powers out to the regions, and at least to keeping the jobs that already exist there.

The term “northern powerhouse” is bandied around. It started with the Chancellor, but many Ministers and MPs now use it. The fundamental question is whether it is just a catchphrase or real policy—empty words or substance. I look forward to the Minister convincing me in due course.

[Several hon. Members rose—]

[Mr George Howarth (in the Chair)]

Order. Before I call the Front-Bench speakers, I ask them to bear in mind that I hope there will be time at the end for the right hon. Member for Rother Valley (Kevin Barron) to conclude the debate.

15:02

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

I am grateful to be speaking under your chairmanship today, Mr Howarth. I congratulate the right hon. Member for Rother Valley (Kevin Barron) on making the debate possible, and commend him for defending his constituents’ right to be heard on a matter that I know is important for the great steel city’s community. I do not know whether the Minister or even the permanent secretary recognise this thing called an iPad. FaceTime works. I use it every day in my constituency work, and I am sure that senior civil servants and Ministers could do the same.

I am disappointed that the Secretary of State is not here. I read the urgent statement that was demanded by the hon. Member for Sheffield, Heeley (Louise Haigh)—I congratulate her on that—and thought that if it was not so serious it would be a good laugh. It was extraordinary, and I commend the hon. Lady for making sure the statement happened.

I have a long family connection to Sheffield, and over many decades I have seen the rise and fall of British Government policy in the city, as Governments have sought to deal with the aftermath of deindustrialisation while maintaining the quintessentially British Government policy that I would title “South, south, south.” Not long ago in the Chamber the Government extolled the virtues of devolution and decentralisation to Scotland, Wales and Northern Ireland, but they fail to recognise, or perchance they ignore, the elephant in their English garden—the culture of London centralisation. Yet in “UK Cities Monitor 2008” the north’s cities, including Sheffield, were among the top 10 for locating a business, and in third and fourth places for office location. The same report placed Sheffield third for “greenest reputation” and second for availability of financial incentives. I might move there myself. What is not to like? London, the capital of oligarchs and Russian tycoons, offers nothing but the London weighting, which could not buy someone a rabbit hutch, and the prospect of a mute commute more akin to “1984”. There is the opportunity to base a civil service Department in one of the UK’s friendliest cities and to obtain all the social and economic benefits that that would bring to the entire islands.

I have no doubt about the personal commitment of the Minister for Small Business, Industry and Enterprise, the right hon. Member for Broxtowe (Anna Soubry), to her political ideology or, for that matter, about her knowledge of Sheffield itself, given her local connections—it is a pity she is not here today—but I do question the political ideology that is driving this process. While cities such as Sheffield offer new, innovative approaches to growth outside the hothouse of London, offering civil servants the opportunity to move to London or, even worse, to commute from Sheffield is both unproductive in the long term and a socially and economically bankrupt approach. If a civil servant decides to up sticks, either as a single person or with a spouse, partner or family, the policy will generate a burden on London’s already overcrowded public services as well as shrinking the affordable housing market.

Having read the response to the urgent question on 29 January, I am mindful of the point made by the hon. Member for Blackpool South (Mr Marsden), which I will quickly quote:

“It is also a huge worry…to the 12 other BIS regional offices, six of which are in the north,”—

I take that to mean the north of England—

“that they are at risk from this so-called restructuring.”—[Official Report, 29 January 2016; Vol. 605, c. 559-60.]

I call that restructuring policy the London dividend. Like the hon. Member for Blackpool South, I call upon the Minister to set out unambiguously and openly the Government’s approach to that restructuring. Will the Minister here today commit to a restructuring programme that does not drive civil service jobs from the great cultural counties of northern England to the bursting metropolis of London? If that is the policy, then, like those that were once thrown at Scotland, it will undermine community cohesion, erode civic pride and limit both opportunity and resources for cities such as Sheffield. Such cities continue to be undermined by the reality that, according to the Institute for Government, the proportion of civil service jobs in London increased from 16% in 2010 to 18% by March 2015, when there were already 80,000 such jobs in the capital.

It is critical that the Government use their powers to bring about the inclusive growth that the Scottish Government, even with its limited economic powers, have achieved. Scotland has developed a more egalitarian model, which was praised by Professor Joseph Stiglitz, the Nobel prize-winning economist, when he said:

“Tackling inequality is the foremost challenge that many governments face. Scotland’s Economic Strategy leads the way in identifying the challenges and provides a strong vision for change.”

Data from 2012-13 show that income inequality is lower in Scotland, and the gender gap in employment in Scotland has also narrowed, but this will not help the northern powerhouse, or even the city of Sheffield, to deal with so many of those matters. The British Government’s approach to growth, as seen in this debate, is short-sighted, limited and exclusionary. It fails to see the tangible assets of its great historic northern counties or the communities who choose to live there.

In finishing, I commend those communities, who, through it all, are resolute and determined to be heard in this place. I would encourage their elected representatives, who I also commend today, not to look south to London for policy answers. I say to them: I challenge you, in meeting the needs of your communities, to turn and look even further north, and consider that inclusive model which I would consider could assist you in seeing off this Government’s ideological drive to limit your cities’ and counties’ ability to be that northern powerhouse; and I challenge you to ensure that the civil service, with all due respect, is representative of the communities that it seeks to serve.

15:34

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my right hon. Friend the Member for Rother Valley (Kevin Barron) on securing this important debate and pay tribute to all my hon. Friends from across the region, who have worked so hard on their constituents’ behalf to hold the Government to account for their perverse decision.

The announcement by the Department for Business, Innovation and Skills on 28 January 2016 to close its largest office outside London and transfer staff to London was understandably greeted with shock. My hon. Friends have highlighted the effect it has had on people and their jobs. The announcement came out of the blue. It is confused and short-sighted at best and destructive at worst. Put simply, it makes no sense, economically or otherwise, and the Opposition are calling for the Government to review it. It is bad news for the people of Sheffield and for the civil service, because of the loss of experienced staff and their valuable institutional knowledge. As we heard from my hon. Friend the Member for Sheffield Central (Paul Blomfield), it is also bad for the diversity of the civil service. Indeed, Sir Jeremy Heywood’s comment is germane here:

“talent is everywhere but opportunity is not”.

The move is also bad for the economy of the region. It will divert money from the local economy, further damaging jobs and incomes in Yorkshire. What does that tell us about the Chancellor’s rhetoric about the need to create a northern powerhouse and the importance of regional growth to rebalance the economy? It tells us that it is just rhetoric. This is really about the greater centralisation of power in London, which will create an even bigger gulf between the regions. As a proud northerner, born and bred, I can tell the Minister that that gulf exists. I feel no particular affinity towards London, but I do towards Sheffield, Rotherham and Edinburgh—the cities of the north—because they are where common-sense decisions are often made. If the Government are serious about the northern economy, they should stop moving civil service jobs to London and start providing proper support instead of empty promises. London is overheating and house prices are becoming increasingly unaffordable to ordinary people. The north needs jobs and has the talent to fill them.

The BIS permanent secretary said that the plan to create a combined central headquarters and policy centre in London is about modernising how the Department works, making it more flexible and reducing operating costs. He also claimed that the closure was part of a programme to reduce the Department’s operating costs and staff size by 2020. He said:

“Our operating model needs to be designed in a way that works for this smaller workforce with more streamlined structures.”

I will not even mention the quote about the telephone system and computers not working in the Department for Business, Innovation and Skills; I think that was effectively debunked by my hon. Friend the Member for Sheffield, Heeley (Louise Haigh).

The Minister for Small Business, Industry and Enterprise, the right hon. Member for Broxtowe (Anna Soubry), agreed with the permanent secretary, saying that the closure of the Sheffield office is part of the plan to deliver efficiency savings and contribute to the Government’s deficit reduction target—another blow for the north. However, there appears to be no evidence for any cost saving, as we heard from my hon. Friend the Member for Sheffield Central. How can transferring the work of the office to London, a significantly more expensive location than Sheffield, lead to a reduction in operating costs?

I want to pay tribute at this point to my hon. Friend the Member for Sheffield Central, in whose constituency the office is located and who has been at the forefront of the campaign to find any convincing rationale for the move. As he pointed out, nothing approaching a business case been made for the move. The permanent secretary admitted that when he was questioned by the Business, Innovation and Skills Committee. On being probed about whether there had been any cost-benefit analysis of the move from Sheffield, he replied:

“We did not do disaggregated business cases for each of the 80 offices we now have.”

He went on to say that there was not even a copy of the board paper that initially proposed the move.

[Chris Stephens (Glasgow South West) (SNP)]

I refer hon. Members to my entry in the Register of Members’ Financial Interests. Is it not also shocking that the trade unions were not advised prior to the announcement? What does that say about the Government’s approach to industrial relations? What does it say to the people of Sheffield, who are also seeing other proposed office closures, such as at Her Majesty’s Revenue and Customs?

[Yvonne Fovargue]

It is symptomatic of the Government’s approach to trade union relations that they feel that the unions are so irrelevant they can be ignored and their power reduced. Many other offices throughout the country are indeed closing, such as the HMRC offices in Merseyside, with a loss of jobs and talent.

In addition, the permanent secretary said:

“I don’t think I can point you to one specific document which covers specifically the Sheffield issue”.

So, 249 people losing their jobs was not covered even by one specific document. That is appalling. Those are weasel words: there is no business case for Sheffield to be closed. My hon. Friend the Member for Sheffield Central has tabled written questions to the Secretary of State and written to the Prime Minister asking for the business case to be published. It is still not in the public domain.

I suspect that the real reason for the move is not to save money, but simply a desire to have officials closer to Ministers in London. The phrase used by my hon. Friend the Member for Sheffield, Heeley, “water-cooler conversations”, is appropriate here—as she said, they must be pretty good conversations to cost that amount of money. The right hon. Member for Sheffield, Hallam (Mr Clegg) believes this is a political decision that has come from the top; other people believe it is a decision of the civil servants. We have no documents; we do not know.

The civil service has become increasingly centralised since 2010. As we have heard, the proportion of civil service jobs based in London has increased from 16% in 2010 to 18% in 2015, when 80,000 civil servants were based in the capital. The decision to close the Sheffield office is completely unacceptable. It has not been properly thought through and it has not been explained to the people most affected—those losing their jobs—or the people who represent them, their Members of Parliament. The decision seems to be based purely on a whim, and I certainly cannot believe that it will save money. In my view, the Government have to come clean on why they are moving these 247 jobs. It is complete nonsense to move jobs to London, where salaries and office rents are higher. Nobody can see how it makes any sense at all. Public money paid for the 2020 report and we have a right to see it.

Too many decisions are made by people living, working and bringing up children in London, as we heard from my right hon. Friend the Member for Rother Valley. Too many decisions are made by people who have never been outside the capital and they do not draw on the varied experiences of other people from around the regions, who have a totally different experience of life. Policy needs to be developed by people with differing experiences, and the majority of people do not live in London. Will the Minister commit today to reviewing the decision in the light of what he has heard, or will the Government forge ahead and close the Sheffield office, delivering yet another blow to one of the great cities in the north?

15:02

[The Minister for Universities and Science (Joseph Johnson)]

It is a pleasure to serve under you, Mr Howarth.

I congratulate the right hon. Member for Rother Valley (Kevin Barron) on securing this important debate, the second on the subject in recent weeks. I commend all right hon. and hon. Members for being present in strength and for speaking on behalf of their constituents.

As right hon. and hon. Members are aware, the Department for Business, Innovation and Skills is committed to delivering efficiency savings and to contributing to the Government’s overall deficit reduction target to clear the deficit by 2019-20. To achieve that, we developed the “BIS 2020” programme to modernise how the Department works.

[Paul Blomfield]

I apologise if I am intervening prematurely—the Minister might be about to tell us this—but will he explain for the first time how much money will be saved by moving 247 jobs from Sheffield to London? It is a simple question.

[Joseph Johnson]

I will come to savings shortly, so if the hon. Gentleman bears with me for a few seconds, I will get to his question.

The BIS programme will reduce operating costs by 30% to 40% and deliver a simpler, smaller Department that is more flexible in delivery and more responsive to stakeholders. As part of those plans, as right hon. and hon. Members know, the Department has announced its intention to close the BIS office at St Paul’s Place in Sheffield by January 2018. Such decisions are never taken lightly, and providing the right support for and communications with staff has been a priority for the permanent secretary and the entire senior team of the Department. All staff and departmental trade unions were informed of the decision on 28 January and the statutory 90-day consultation process began shortly afterwards. All staff affected by the decision have been fully briefed.

The hon. Member for Rotherham (Sarah Champion), who is no longer in her place, asked what support had been made available to affected staff. I will give the House some detail on that important matter. We are providing comprehensive support to all those facing a potential change or loss of job, including: professional, external careers advice; professional outplacement support; a jobs fair in partnership with the Department for Work and Pensions; time out of the office for job-search activities; and financial advice workshops. In addition, we are exploring all routes to avoid compulsory redundancies, including voluntary exit schemes. There will be no compulsory redundancies before May 2017 as a result of the proposed closure of the Sheffield site.

Many staff will be listening to the debate or watching it on television. The BIS senior leadership wants to ensure that the package of support is comprehensive. If there are things that the Department could be doing, or ways in which we could enhance the support I have outlined, we want to know about it. We want the staff affected to let us know what more the Department can do to support them at this time. We have set up a dedicated email address for them to use, and they have already used the system to make valuable suggestions about ways in which we can enhance the support available. We have been asked by the staff to ensure that updates are regular and frequent. We will be ensuring that that happens. We have already established a dedicated section on the Department’s intranet which includes a comprehensive overview of all “BIS 2020”-related matters. We have set out exactly when our Department’s senior leadership team will be in Sheffield, so that affected staff may discuss their concerns directly.

[Chris Stephens]

The Minister has talked about consultation with staff. Will he tell us, first, how many meetings there have been with the trade unions affected? Secondly, will he outline how a responsive Department can be responsive when it closes offices, leading to a lack of local knowledge and no understanding of local areas?

[Joseph Johnson]

I will happily touch on part of that question. We are now in the 90-day consultation period. The consultation is on a range of issues, including the future of the staff in Sheffield, so—in response to an earlier question from Opposition Members—the future of staff in the city is only one of the issues being consulted upon. Legally, we may confirm the decision on closure before the end of the consultation, but I am happy to confirm that we will wait until the end of the full 90-day period before making a final decision. In response to the hon. Gentleman’s specific question, we have had regular meetings with trade union officials.

To continue, the Department needed to be restructured in line with its new business model under the “BIS 2020” framework. In answer to the question from the hon. Member for Sheffield Central (Paul Blomfield), that will deliver savings of £350 million by 2020, of which approximately £100 million will fall in the administration budgets.

[Paul Blomfield]

With the greatest respect, the Minister did not answer my question. I presume that the matter has been looked at in considerable detail, because I am sure that no such decision would be made in any less responsible way. My question was: how much money is saved specifically by moving 247 policy jobs from Sheffield to London?

[Joseph Johnson]

I would fall back on the response that the permanent secretary gave to the Select Committee on that point: it is difficult to disaggregate a specific item in an overall programme change. The overall “BIS 2020” programme is an holistic system change of working for the Department that will deliver savings of 30% to 40%, worth £350 million overall.

[Mr Betts]

May I ask the question a different way around? If the Department pursued its restructuring and the “BIS 2020” programme, but left the jobs in Sheffield, how much more would that cost the Department?

[Joseph Johnson]

Again, I am unable to provide a disaggregated breakdown of that figure because we are talking about a system change. We must bear in mind that the Department’s current locations are legacy locations, which are the result of legacy decisions and ad hoc organisational changes over a long period of time. We are moving to a more system-based way of looking at all the various ways in which the Department works. In future, our structures need to be, and will be, designed in a more streamlined and efficient way.

To support that effort, we will be bringing down the number of locations from which we operate from about 80 to approximately seven centres of excellence, supported by a regional footprint for work at a local level. Each centre will focus on a key business activity and bring together expertise and help to build up capability. That does not mean a London-centric Department, as has been suggested by Members. Even with the movement of policy roles to London, our overall London footprint will decrease by 2020. We have, and will continue to have, many more people based outside than inside London.

[Louise Haigh]

I am grateful to the Minister for giving way; he is being generous. The point we were making was exactly that the Sheffield BIS office is not like other local and regional offices throughout the country; they are the only headquarters outside London where policy decision making is done. Does he not accept that this closure is a serious blow to the Government’s northern powerhouse and to devolution, which exposes that all as empty rhetoric?

[Joseph Johnson]

Clearly I disagree with that. We will not be losing the capabilities. We will be moving a number of the jobs, and some jobs will become available in London, so the policy expertise that resides in Sheffield at present will not be lost.

The hon. Member for Sheffield Central asked about equality. BIS is recognised across Whitehall as a leader in its support and determination to embed diversity across the Department’s workforce, and that will continue to be the case in the years ahead, notwithstanding these changes. The Department employs about 18,000 staff outside of London and just over 2,000 are based in the No. 1 Victoria Street headquarters in London.

[Paul Blomfield]

Will the Minister give way on that point?

[Joseph Johnson]

I will make a bit of progress, if I may.

We are certain that that footprint, and our BIS local capability in particular, will ensure that BIS will maintain a nationwide perspective on policy issues. The hon. Gentleman who just tried to intervene—I am responding to his earlier intervention—was concerned about our ability to maintain policy capability in the light of the expertise that resides in Sheffield. As I said, there will be opportunities for people from Sheffield to move to London and other places, and we are confident that we will be able to maintain the high quality of work in the higher education and other policy directorates.

As the Minister for Universities and Science, since last May I have been working closely with higher education officials in Sheffield, and I am very happy with the work that they have done. They have consistently provided excellent support, and I want to thank them very much for their work. I reiterate that the Department’s decision was not taken lightly, but I am confident that our higher education policy making capability will remain as strong as ever.

In response to the points made by the hon. Member for Sheffield, Heeley (Louise Haigh) on the northern powerhouse, the Government are completely committed to Sheffield and its surrounding area as part of the northern powerhouse. The Department for Business, Innovation and Skills, along with the Department for Communities and Local Government, has been working closely with the local council and the local enterprise partnership to produce an enhanced, landmark devolution deal, which will see a Sheffield city region mayor elected for the first time next year by voters across South Yorkshire. The mayor will have transport budgets, franchised bus services and strategic planning, plus additional devolved powers for the area’s combined authority. The mayor will also get control of an investment fund worth £30 million a year for 30 years.

[Mr Clegg]

I have a really friendly suggestion for how the Minister can honour the stirring rhetoric about the Government’s commitment to the northern powerhouse and to the long-term vibrancy of the Sheffield economy in particular. Will he undertake to all of us here now that he will personally make representations to the Secretary of State for Transport, the Chancellor and, if necessary, the Prime Minister to locate the high-speed railway station due to be located in South Yorkshire in—

[Kevin Barron]

Meadowhall.

[Mr Clegg]

—no, not in Meadowhall, but in Sheffield city centre? The northern powerhouse is built around the vibrancy of city centres. Ignore the cacophony of different voices from the Labour party in South Yorkshire and locate the station there and, not all, but quite a lot will be forgiven.

[Joseph Johnson]

I am grateful to the right hon. Gentleman for raising an important point about the new transport connections that will improve the competitiveness of businesses in the north of England and the northern powerhouse area. That highlights the important point that, first of all, the northern powerhouse is about stimulating private sector growth, jobs and economic activity. It is not about preserving in aspic exactly the way things are across the whole of the state and the public sector—that is not what the northern powerhouse is about as an idea. It is about building better transport links, for instance through the creation of the Transport for the North body, and investing in things such as our science base, which we are now able to do thanks to the great science settlement we got in the spending review, which will help great institutions such as the Sir Henry Royce Institute, the Institute for Ageing in Newcastle and the National Graphene Institute in Manchester, which have all been able to come into existence in the north and help to drive productivity up in the area.

[Mr Betts]

The northern powerhouse is about private investment, and that is important, but so is the symbol that the Government give about their commitment. We cannot get precise figures about the savings for the Department in moving these staff, but does the Minister agree that his permanent secretary could scope out an alternative model of how the Government would operate—with all the changes and the policy streams, but with staff remaining in Sheffield—to see what the difference is, and would he publish that, so that we can have an open and transparent consultation?

[Mr George Howarth (in the Chair)]

Order. There is great strength of feeling here. I hope the Minister will leave time for the right hon. Member for Rother Valley (Kevin Barron).

[Joseph Johnson]

Thank you, Mr Howarth. I want lastly to address this false picture—[Hon. Members: “Answer the question!”]—that is being presented of jobs being sucked into the economy in the south. The north of England is one of the fastest-growing regions of the country in terms of jobs growth and employment. The north-east and north-west are seeing very strong employment growth. We are confident that our long-term economic plan will continue to deliver jobs and opportunities for all the people in the area.

This has obviously been a very difficult decision for the Department. We are listening closely to staff to see how we can improve the support available to them and we will be listening closely to them in the weeks and months ahead. I will leave time for the right hon. Member for Rother Valley to conclude.

15:57

[Kevin Barron]

First of all, may I thank everyone who has taken part in the debate? It has been fascinating. I will quickly nip through one or two things that have been said. I did not know about the problems we have with phones in Sheffield—my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) said that the workforce had been told that. I thank the hon. Member for Edinburgh North and Leith (Deidre Brock) again: we do have the internet in Sheffield and South Yorkshire, and it does tend to work. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) said, modern IT is a way to brief Ministers as well. Let me relate a little to that: iPads do work, as well as the Scottish National party. I did an interview live on Radio Sheffield at twenty past eight this morning, sat in my lounge, in a house in West Yorkshire, using a landline. I said to the interviewer at the time, “Twenty years ago I would have had to have got on the bus, gone into the studio and sat in Millbank to have the interview,” because they could not have coped with what are now everyday things. The idea that we are concerned about phone lines and everything else is just a little too much.

I was interested by the issue raised by the right hon. Member for Sheffield, Hallam (Mr Clegg). This is a political decision in the end and we have to accept that. I was here yesterday afternoon when we were talking about pharmacies. The Government decided to cut £170 million from pharmacies as part of the national health service’s £22 billion of efficiency savings, and today they tell us that they will put £10 billion back. If someone took £22 from me and gave me £10 back, I would think I had lost and I would not be happy with that.

I recognise that we do not have much time, but may I say this to the Minister? He says that the decision has not been taken lightly, but from the interaction we have had here, I can say that it has been taken without much knowledge of what the Department wants to do, and if I were a member of the workforce, I would not be very happy to have that fait accompli put in front of me. I still think there is time to reconsider the decision and I hope that the Government will do so.

Question put and agreed to.

Resolved,

That this House has considered the closure of the Department for Business, Innovation and Skills office in Sheffield.