Department for Business, Innovation and Skills Office: Sheffield

Chris Stephens Excerpts

Wednesday 24th February 2016 Westminster Hall

[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?

--- Later in debate ---

[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.