Closure of Sovereign House, Newport

Jessica Morden Excerpts

Wednesday 19th July 2017 Westminster Hall

[Paul Flynn]

My hon. Friend makes his point with great force. That is precisely the position. People are attracted to super-hubs because they want their career to leave a legacy. If they can think that they have built super-hubs—great phallus symbols—in various places, they can relax when they eventually retire to their haciendas in Spain. It is something to be achieved, but it is not always rational or right.

I thank the Minister for having met my hon. Friend the Member for Newport East (Jessica Morden) and myself to discuss the matter. We want to see a clear, practical exposition of why this decision is the right one. To my knowledge, Sovereign House has been operating since the early ’60s and has provided jobs right in the heart of the city for all that time. There are 182 people working there now, but there is capacity for 400. It is a great asset to the city. One point that is not always taken into account is that the vibrancy of the city centre depends on the workers who are there. They have their lunch in the city, use the shops and so on, so they add to it. If a city is to thrive and survive, we need that working population at its heart. Where does that point come into the calculations of those who make the decisions?

[Jessica Morden (Newport East) (Lab)]

My hon. Friend quite rightly speaks about valuing the civil service jobs in both our constituencies, which we always speak up for. Does he agree that we not only risk losing the skills and expertise of those dedicated Department for Work and Pensions staff, but could end up spending vast amounts more by creating a more expensive super-hub that people will have difficulty travelling to?

[Paul Flynn]

My hon. Friend is absolutely right. We must not fall into that trap. If we are going to take a decision, let us see all the facts laid out. Making people’s jobs convenient for their homes is of paramount importance —it is at the heart of the Welsh Government’s policy and I believe that they would say the same. They do not see this mania for super-hubs and bringing everything together as the answer.

There are fashions. There is a fashion for devolution and for economy of scale, and then we go in the other direction and there is a fashion for concentrating activities. These things go on, and we should not be borne along without making a reliable, scientific assessment of the advantages and disadvantages in this case.

[Paul Flynn]

My hon. Friend is absolutely right. Although it is Newport that is mentioned in the title of the debate, the threats are spread right around—Merthyr and Caerphilly, the Newport service centre, Cwmbran pension service and the Gabalfa DWP centre in Cardiff. They are all under threat. It is difficult to get on a balance sheet what being told that they have to travel miles further, with more awkward bus routes, means to someone who is already struggling to get to work—particularly women with parental responsibilities—and who may just be managing to cope at the moment.

We know—not from the Government but from elsewhere—that there is a plan for a hub in the Treforest trading estate, which was set up after the slump in the ’20s. It has seen the success, and has been the graveyard, of many enterprises over the years. We do not want to see the Government go down this path without fully considering the human consequences.

One of the great successes that we have seen in employment is in making buildings accessible to the disabled, including people in wheelchairs. It is now possible in many jobs for people to use the lifts and the desks, and to use the public services. We are going to add to those problems. Where do we put that in the equation?

The Government might talk about big being beautiful and the benefits of having a large group of people together, but modern technology teaches us that it is as easy to talk to someone in Australia, or indeed in any part of the world, using various computers methods, such as Skype, as it is to talk to someone sitting at the desk next to you. The location is therefore not that important, and nor is the idea of a hub.

Will the Minister assure us that the Government have made a full assessment of the alternatives to changing Sovereign House? It is an old building and I am sure that it is run down—they all are—but they should not just dismiss it and say, “We can’t do anything with it. The hub is the only object we are considering and the only way we are going.” There should be a proper, full assessment of the costs of bringing Sovereign House up to standard. I hope that the Public Administration and Constitutional Affairs Committee will look at these issues. I have had the pleasure of being on the Committee for many years, and I will be going back to it. We must consider locations for the civil service in the future. There has not been a glorious record of unparalleled success recently—far from it. We need proper parliamentary surveillance of such decisions.

Has the Minister consulted fully with the Welsh Government on the closures and relocations? This seems to be in conflict with the policy of the Welsh Government, who have the motto, “better jobs closer to home”. They have gone that way, and we can all see the advantages. There are problems with the flow of traffic going into and out of Cardiff and Treforest—the bottom of the valleys—at that time of day. It is far better to expand Sovereign House than to move the jobs further away.

Has the Minister completely ruled out any compulsory redundancies? What is the situation? There is great anxiety among those involved. Some people are already at their limit of travel, and others may have already moved from another location. Can we guarantee that they will not be put under pressure? Have the Government looked at the equality impact of their proposals? Do they realise that women will be unfairly penalised by the change? Have they carried out an impact study of how the closures will affect the local Newport economy?

[Jessica Morden]

Does my hon. Friend agree that it is unfortunate that the Public and Commercial Services Union and staff learned about this plan from a leak on an architect’s website before Ministers had a chance to do an equality impact assessment of the decision on staff? Does he agree that if the equality impact assessment shows, as we think it will, that staff with travel difficulties or caring responsibilities will experience difficulties, the Minister should think again?

[Paul Flynn]

My hon. Friend is absolutely right. I am grateful to her for that intervention.

We are not looking for a reversal of Government policy if the change makes sense, but they have to prove that it makes sense not just in economic terms but in human terms. The hub will cause disruption, as I believe it will contain many more than 1,000 people. It will be a man-made hub. There are natural hubs in various parts of the country. Those in Blackpool and Newcastle, for example, have grown up due to certain unique circumstances.

This is a question of lumping together offices that have worked magnificently in Merthyr, Cardiff and Caerphilly, because of someone’s administrative theory that hubs are better. I look forward to hearing from the Minister, who has been very courteous and open about this. I hope that he will keep an open mind and say that the Government will look at this and balance the full costs—not just those that show up on a balance sheet, but the heartbreaking human problems that are likely to arise, particularly for the women who are now employed in south Wales and are likely to be transferred to the Treforest hub.

--- Later in debate ---

[Damian Hinds]

Yes, looking at both car transport and public transport opportunities was of course part of the analysis when these changes were evaluated.

The Treforest area borders some of the most deprived areas in Wales, and choosing it supports the aim of the Welsh Government’s valleys taskforce of creating “better jobs closer to home”, which the hon. Member for Newport West cited. I met the Welsh Government’s Minister for Skills and Science last week to discuss our plans and how we will support our staff through these changes.

In March this year, there were 212 staff at Sovereign House and only about 50% of the building was in use. As I mentioned, we assessed the distance that staff would travel to work at the proposed new site. Newport is 21 miles, or a 26-minute drive, from Treforest. There is also a bus, which takes around an hour and 11 minutes. Of course, journey times will differ depending on where staff live in relation to the site.

From 2021, we will start to move staff to the new site. We want to retain Newport colleagues, along with their skills and experience, and we have deliberately chosen to phase the moves so that people have time to make decisions about their futures. We are also prepared to pay staff members’ excess travel costs for up to three years to assist their transition. Along with other Departments, the DWP will continue to be a significant employer in the area, and I expect the skills and experience of people who work at Sovereign House to be in demand. These changes to back-of-house sites will have no effect on claimants in the hon. Gentleman’s constituency, as the jobcentre there will remain open.

The hon. Gentleman asked whether I would go into detail about the rationale for the new site, including the financial rationale. Our strategy for the new service centre in the Treforest area is to bring colleagues together at a single location, resulting in better use of space, increased efficiency in how we work, and greater opportunities for staff development and progression. However, there is also a financial rationale. Fitting out a bespoke new right-size property is better value than refurbishing our existing older properties. Although that is not necessarily universally true for all buildings, the sites in this region are particularly old.

Refurbishing older sites can have quite a high cost, as it generally entails substantial infrastructure requirements, which might include installing more lifts, air conditioning, heating, lighting, and cabling and other technology to increase bandwidth for digital services and call centres. Although we have not acquired specific refurbishment quotes for the buildings in question, industry benchmarks suggest that refurbishing all our existing buildings would cost between 50% and 100% more in fit-out than setting up a new building. Of course, such refurbishment is also disruptive both to our work and to staff. We would need to vacate a property for six to eight months and incur the cost of moving and of temporary space for that period, or move within a building multiple times to free up floors for refurbishment.

[Jessica Morden]

Will the Minister give way?

[Damian Hinds]

Will the hon. Lady forgive me if I see how we go? If time allows, of course I will.

We also expect a new building to have significantly better environmental credentials and better energy efficiency than our old buildings, creating savings in the long term.

The hon. Member for Newport West rightly asked about the risk of redundancies. Of course we want to minimise that risk. It is impossible to be absolutely clear at this stage, not least because we are talking about a move that is some years away, but we anticipate that approximately 20 staff might not be able to move to the new site. Now that announcements have been made, it is possible to be clearer about employment and career opportunities, and we will have detailed one-to-one meetings with staff between now and then.

I reassure the hon. Gentleman that we have met our equality duty under section 149 of the Equality Act 2010 and paid due regard to the impact of the proposals on our communities, our staff and the customers they serve. He also mentioned the requirements of people with disabilities and how office facilities have become more accessible over time—a development we all welcome. It is of course worth considering the fact that new buildings can often be designed with the specific needs of our staff in mind, including features such as improved accessibility.

[Jessica Morden]

Will the Minister publish the proposed budget for acquiring the land and for designing and building the proposed hub?

[Damian Hinds]

As I think the hon. Lady knows, there are some things that are commercially sensitive and that it is not possible to release, and there are other things that it is possible to release. I am happy to follow up with her about that in correspondence.

I know that there is also interest in whether our plans will affect the roll-out of universal credit. I assure hon. Members that the changes take full account of the roll-out of the full universal credit service. We have ensured that our schedule of changes has the flexibility to react to changing demand—both expected fluctuations and future economic trends. From this month, we are expanding universal credit full service roll-out to 30 jobcentres a month and putting extra resources into those jobcentres and the service centres that support them.

As the way we interact with our customers changes, so do their needs and expectations. Reforms have increased our online interactions with claimants so that face-to-face contact can be used for those who require additional support. We are committed to retaining an accessible jobcentre network and continuing to serve customers in all parts of the country. Our work coaches will continue to offer face-to-face support—a core part of our service—at our sites, but customers now have a range of ways to access employment support, including email, telephone, post and online.

Around 3 million more people in this country are in work than in 2010, and youth unemployment has fallen by 375,000. The employment rate has risen to 72.9%, which is a record high. In Wales, a near-record high of 1.44 million people are in work. Now is the right time to consider how we can make best use of our resources to help bring into work those who are able to join the workforce while retaining support and safeguards for those who are not.

Question put and agreed to.