Department for Business, Innovation and Skills Office: Sheffield

Mike Kane Excerpts

Wednesday 24th February 2016 Westminster Hall

[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.

--- Later in debate ---

[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.