BIS Sheffield/Government Departments outside London

Louise Haigh Excerpts

Monday 9th May 2016 Commons Chamber

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

I, too, thank the Backbench Business Committee, as well as my hon. Friend the Member for Sheffield Central (Paul Blomfield) and the hon. Member for Warrington South (David Mowat), who have worked hard to secure the debate and the cross-party support it has gained. I hope the Minister is starting to understand that we are not going to go away on this issue.

This decision has been extraordinary: in one fell swoop, BIS Ministers have delivered a thumbs down to the northern powerhouse, a thumbs down to the taxpayer and a thumbs down to their ministerial colleagues who wax lyrical about the benefits of having key staff outside Whitehall.

Crucial board meetings are scheduled for this month, following the end of the consultation. I urge the Minister to go into them with an open mind and to relay the points that have been made here today. First and foremost, I hope she understands that, for people in our city, a decision to close the Sheffield office would be highly symbolic; it would be a signal of the London-centric contempt for the north and for the skill and perspective of northerners—a contempt that has prevailed for far too long. The “BIS 2020” plan appears to reinforce that contempt for a regional perspective, with the London headquarters strengthened while regional posts carrying out vital work are threatened.

We would have expected the Department to support such a significant decision—to move all policy-making expertise from a northern centre into a London HQ—with some reasoning. When I was granted my urgent question, the debate on which has been widely quoted today, the Minister assured me that the decision was part of a cost-saving programme, but officials and Ministers have told us time and time again that a cost-benefit analysis for this decision does not exist.

As my hon. Friend the Member for Sheffield Central and others have said, the admitted cost is far, far higher in London than it would be in Sheffield, Bristol, Cardiff, Darlington or Salford. As the Minister well knows, taxpayers will continue to foot the bill for the office space in Sheffield anyway, as the entire building is leased by the DFE. Furthermore, BIS is one of the few Departments in Whitehall without enough space to accommodate staff adequately, so further centralisation will mean that a rent review is almost certain to hike up the rent yet again.

And for what purpose? So far, the only possible reason we have been able to ascertain is the benefit of London water-cooler conversations. Well, those conversations at BIS must be very good indeed. However, there has been no individual analysis of exactly why they outweigh the unique perspective and institutional memory of staff in Sheffield. Instead, we have seen more tired old 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: all employees should be within eyesight and earshot of the permanent secretary and the Minister. It is astonishing that, in place of evidence, we seem to have a seriously consequential decision that is costing taxpayers money and reversing Government policy but that is based on lazy assumptions and flimsy justifications.

In the months since the decision was announced, there has been no sense from Ministers or departmental officials that they recognise the exceptionalism of the Sheffield BIS office. Research excellence in the Sheffield region is second to none, with two fantastic universities at the cutting edge of innovation. That work is supported fantastically by BIS’s multibillion pound budget, which is directed from Sheffield. Just a few months ago, researchers from Sheffield University helped to confirm Einstein’s theory of relativity, which will unlock the secrets of the universe—not a bad record.

Sheffield is also the only office outside Whitehall carrying out high-level policy functions. A Government report from 2010 tells us why that matters. It said:

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

That is exactly what we already have in Sheffield and what we put at risk with this decision.

The Sheffield office could become the eyes and ears of the northern resurgence. Instead, we will have a centralised BIS, alongside a Department for Communities and Local Government with a northern powerhouse Minister whose entire staff is based in London, and a Treasury producing its template devolution deals exclusively from London, with no understanding of the geographical and socioeconomic challenges.

That gets to the heart of the reasons why moving civil servants out of London is a decades-old mantra: cost and perspective. The Smith report, which I just mentioned, wanted to move civil servants out of London to

“bring government closer to the people”

and “stimulate economic vibrancy”. The report was hardly groundbreaking; in fact, it was based on decades of movement away from Whitehall—something the Minister’s colleagues are encouraging as part of the March Budget. The Ministry of Justice has announced a large-scale move away from London, and the DFE is waxing lyrical about its regional base and is looking to expand it further. That is because doing that is cheaper, and having powerful civil servants in other regions can only be a good thing.

In trying to justify this decision, the Minister will no doubt be adamant that the plan will continue the existing arrangement, with more of her civil servants outside London than in it. Even ignoring the importance of policy-making clout, the leaked report that has been referenced today has revealed that even that argument does not hold water: all the jobs under threat are distinctly regional, including those in places such as Lancaster, Cardiff and Bristol, to name just a few.

The Skills Funding Agency, with its vast majority of regional staff, who are working hard to deliver the Government’s apprenticeship target, is set to be slashed. The UK Commission for Employment and Skills, which has been doing vital work in getting to the bottom of the slow-burning productivity crisis, is set to go entirely. Rotherham, a town where public sector jobs act as ballast, will be left counting the cost. The entire “BIS 2020”plan looks like a perverse counter to the northern and regional powerhouse agenda: slash jobs in the regions, take no account of the importance of local economies and centralise the Department’s work in London.

If hon. Members think I am leaping to conclusions about the way in which BIS HQ in Whitehall instinctively adopts a London-centric approach that is totally at odds with the devolution of power to a northern powerhouse, they can look at the details of a seminar given to BIS employees early last year by McKinsey and Company—the same company that authored the report into this restructuring. An item on the agenda, which I and other hon. Members have seen, read

“how can London ensure it outstrips rival cities”,

This is the same city whose infrastructure spending is more than every other UK city’s combined, at £45 billion.

BIS’s mission statement says the Department will achieve its objectives by having the

“right people, in the right place, at the right time”.

How on earth does this strategy achieve that stated aim? The Minister and senior officials may not appreciate it, but there is a reason why an idea that few of their colleagues sign up to, that damages the northern powerhouse and that costs the taxpayer money is not such a good idea.

I urge the Minister to use the end of the consultation to think again. She should think about what message these proposals send and what damage they do, and she should put a halt to this decision, which will reverse a decades-long progressive trend of moving civil servants out of London.