Paul Blomfield
Main Page: Paul Blomfield (Labour - Sheffield Central)BIS Sheffield/Government Departments outside London
Paul Blomfield Excerpts
Paul Blomfield (Sheffield Central) (Lab)
I beg to move,
That this House notes with concern the Business, Innovation and Skills Department's proposal to close its Sheffield policy office, moving 247 posts to London; further notes that the Sheffield BIS office proposal runs counter to the Government's welcome commitment to create a public sector that reflects the diverse nature of the UK following the publication of the Bridge report and also to the commitment in Budget 2016 to move civil servants out of expensive Whitehall accommodation; and therefore calls on the National Audit Office to conduct a cost benefit assessment of the BIS Sheffield proposal.
I thank the Backbench Business Committee for granting the time for this debate and right hon. and hon. Members from both sides of the House for their support for the application. The breadth of that support reflects the concern over the two issues central to this debate. The first issue is to underline the value of locating civil servants, particularly those involved in policy making, right around the country, in the regions and nations that make up the UK. That is something on which I think we can all agree and which has been reflected in the approach of successive Governments, including this one, in many of the things they have sought to do. The second issue is the seemingly perverse decision by the Department for Business, Innovation and Skills to centralise policy work in Whitehall and close its Sheffield office. It is a decision that runs counter to the general thrust of Government policy.
On 28 January, the BIS permanent secretary announced plans to close the St Pauls Place office in Sheffield, which is part of the Government’s national policy function, and to relocate those jobs to London, in order to centralise all departmental policy functions in Whitehall. In justifying the decision, he explained that the Department needed
“to modernise the way we work, reduce operating costs and deliver a simpler, smaller department that is more flexible and responsive to stakeholders and businesses.”
Those are fine, legitimate goals, but a decision to move policy functions from Sheffield to London does not tick any of those boxes. As Members, we asked the Department for figures explaining how a move from Sheffield to the most expensive city in the country could possibly reduce operating costs.
Jenny Chapman (Darlington) (Lab)
My hon. Friend is making the central point of our argument. I would like to make the point that it is not just jobs in Sheffield that are at stake. Although the numbers are smaller, jobs in Darlington are being moved to London, too, which makes absolutely no sense.
Paul Blomfield
I very much share my hon. Friend’s sentiment that there are many benefits derived from locating jobs outside London. These include cost benefits and the enrichment of decision making by involving people located around the country in administering government and advising the Government. My hon. Friend made a very important point.
When we asked the permanent secretary for a cost-benefit analysis, we got no answer. A cost-benefit analysis of moving a departmental office is not commercially sensitive and, so far as I can see, it is not a matter of national security. Why, then, right from day one, has the Department refused to provide the evidential basis for this proposal? Members have asked for this analysis in a Westminster Hall debate, in oral questions, in an urgent question, in written parliamentary questions, in over three separate evidence sessions of two Select Committees—the BIS Committee and the Public Accounts Committee—and in written correspondence. Yet we are still to see this information.
We can only assume that the reason for that is that the decision does not stand up to scrutiny. Such information as we have managed to wheedle out through written questions and other ways seems to confirm that. The answer to parliamentary question 33917 tells us that each year it costs £3,190 on rent, rates and maintenance to have an employee in the Sheffield office, compared with £9,750 in the London office. The Department rightly offers the London salary weighting of £3,500 a year, so we are already up to more than £10,000 per employee in London in comparison with Sheffield. That is before we even consider recruitment issues in London, where a more competitive jobs market inevitably drives salaries up further, which was acknowledged by the permanent secretary. When questioned on the issue, the permanent secretary told the Public Accounts Committee last month:
“We have not sought to put a price”
on those additional costs. That is extraordinary, and it is not good enough.
Alex Cunningham (Stockton North) (Lab)
My hon. Friend is making an excellent financial case to show why this change should not happen. The BIS office at Billingham in my constituency is not a headquarters, but it lies three miles from the constituency of the Minister responsible for the northern powerhouse. What kind of message does my hon. Friend think is being sent about the Government’s commitment to a northern powerhouse when they close down offices even in the constituency of the Minister who is supposed to be responsible for it, as well as next door?
Paul Blomfield
My hon. Friend makes a very important point, and he will not be surprised to learn that I shall come back to the point a little later in my contribution.
The Government say, quite understandably, that they want to save money, but we have done the maths from the limited information that we have managed to get. This decision will cost the Department in operational costs an additional £2.5 million a year, every year. I shall press the Minister further on the figures. When we tried to get a proper cost-benefit analysis, the permanent secretary told the BIS Select Committee:
“I do not think I can point to you one specific document that covers specifically the Sheffield issue.”
Furthermore, when the Minister for Universities and Science drew the short straw in having to defend the seemingly indefensible at a Westminster Hall debate back in February, he was clearly briefed by civil servants to respond to the repeated requests we made for a cost-benefit analysis, by saying:
“I am unable to provide a disaggregated breakdown of that figure because we are talking about a system change.”—[Official Report, 24 February 2016; Vol. 606, c. 138WH.]
That is not so. I have it here in an internal BIS management document on a page entitled, “Potential Savings from Sheffield Office Closure”.
I think that there are some serious issues here relating to the hand that Ministers have been dealt by senior civil servants in their Department. Indeed, when answering an urgent question asked by my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) immediately after the announcement, the Minister for Small Business, Industry and Enterprise said:
“We are confident that many of the workers will choose to take new jobs down in London.”—[Official Report, 29 March 2016; Vol. 605, c. 562.]
I am afraid that that is not the case, according to the leaked internal document, which states that
“90% of the potential savings are dependent on how many jobs are retained and moved to London.”
In other words, the more people reject the non-offer to up sticks, try to find a house in London’s hugely overheated housing market and move their children to different schools, the more money will be saved—and, to make sure of that, no relocation package was offered to the staff.
That takes me back to the obfuscation that we have encountered throughout the months during which we have debated this issue. In response to my most recent attempts to obtain the figures via written parliamentary questions, I was referred to a letter from the permanent secretary and the Chairs of the Business, Innovation and Skills and Public Accounts Committees. It sets out quite exaggerated costs for the Sheffield office, and some incredulity was expressed in the Public Accounts Committee when the issue was discussed there. Unless none of the functions being carried out in Sheffield—relating to the higher education White Paper and higher education in general, to apprenticeships, and to further education funding—is to be replaced in London, the letter provides only one side of the story, because the costs will be incurred in the replacement of the posts of people who do not move in London.
Is this simply a case of cutting 247 posts because they happen to be in Sheffield—posts which, because they are in Sheffield, are by definition, as I have said, £10,000 cheaper? A decision was made without regard for costs, without regard for the policy areas in which the people involved were working, and without regard for the expertise that would be lost. Indeed, the former—and highly regarded—Conservative special adviser in the Department, Nick Hillman, who is now head of the Higher Education Policy Institute, has lamented the loss of institutional expertise that this move will involve, and has condemned the decision for that reason.
Jo Stevens (Cardiff Central) (Lab)
Many of my constituents work for the Insolvency Service. At a time when there is a steel crisis, BHS has collapsed and other businesses are becoming insolvent, one would think that the Government would want to retain staff with expertise in insolvency, yet 153 jobs are at risk. Does my hon. Friend agree that that does not seem to be a sensible policy approach?
Paul Blomfield
I do indeed, and I think that other Departments are recognising that problem. For example, the Department for Education is trying to take some of the Sheffield-based BIS staff into its headcount because it is so worried about the loss of institutional expertise in respect of the programmes and the policy agenda that they share. The loss of that institutional experience and expertise is a really worrying issue, and it prompts concern about the Government’s ability to deliver their agenda.
What this begins to look like is a lazy decision, easily taken by top managers in the Department, and based on a prejudice that policy people should be together in Whitehall. I have to say that it is not a prejudice shared by other Departments. Indeed, the Department for Education celebrates the fact that it has members of staff making policy in offices around the country, bringing the experience of their lives and work in the regions and nations of the United Kingdom to those policy decisions.
Caroline Flint (Don Valley) (Lab)
I congratulate my hon. Friend on securing the debate. As he will know, not only has the Department for Education made it clear that it does not think it is for the good of education policy to move all staff to London, but it shares a building with BIS staff. Alongside is a skills agency, which, when questioned by the Public Accounts Committee, confirmed that it had no problem with having good, bright staff based in Sheffield to do policy work. Is it not worrying that BIS feels that we should move all the policy jobs—many of them good, highly paid and highly qualified jobs—to London? What does that say to young people in south Yorkshire and other areas outside London?
Paul Blomfield
I thank my right hon. Friend for her question, and for her robust questioning of the permanent secretary at the Public Accounts Committee. She is absolutely right to say that this sends out the wrong message. When we raised this matter with the permanent secretary, he pointed out that there were many other BIS jobs around the country. It is almost as though BIS is happy to have administrative functions carried out around the country but policy people have to be together in London. This raises another point about silo thinking within Government. As my right hon. Friend points out, there is a synergy involved in having civil servants in policy roles in BIS and the Department for Education working together on a similar agenda. Taking them away and moving them to London will diminish their role.
Alex Cunningham
I am really interested in this idea of policy people having to be at the centre. The Department argues that the move will bring BIS policy operations closer to Ministers and contribute to the huge saving of £350 million of running costs. However, the “Government’s Estate Strategy” states:
“With modern IT, officials no longer necessarily need to be physically present, for example to brief ministers. Having offices on the periphery will also encourage local growth and regeneration.”
That is the Government’s own strategy. Does my hon. Friend not detect a conflict there?
Paul Blomfield
I do indeed. I would simply reflect that this is the Department responsible for innovation. It is supposed to lead on creative thinking and thinking outside the box.
I worry, as do colleagues, that proper consideration has not been given to better options. The Department set itself an ambitious cost-saving strategy in “BIS 2020”, but what is its thinking on how it is going to get there? Normally, faced with decisions such as these, big organisations would think about the resources they needed to achieve their objectives, look at the matter in the round, model how those resources should be most cost-effectively located around the country, then make the decisions. Decisions about office closures would naturally come at the end of that process, not at the beginning, as has been the case here. The Department is putting the cart before the horse.
Chris Stephens (Glasgow South West) (SNP)
The hon. Gentleman is making an excellent speech. Should not part of the process he has just outlined involve proper consultation with the relevant trade unions?
Paul Blomfield
The hon. Gentleman makes an important point. We saw a process of consultation, which concluded on 2 May. The trade unions, working with the affected staff, have put in some substantial submissions and alternative proposals, and I shall be seeking reassurances from the Minister that they will be properly considered and their merits given the weight they deserve.
As a number of Members have commented, the “BIS 2020” review might result in some relocation of staff and in the concentration of policy staff in some areas. However, the idea that all policy functions need to be concentrated in London is simply absurd. It is even more ironic, given the wider Government policy that my hon. Friend the Member for Stockton North (Alex Cunningham) has just mentioned.
This year’s Budget committed the Government to moving out of “expensive Whitehall accommodation”. The Cabinet Office recently launched a raft of measures in a bid to diversify the civil service, after one of the Bridge report’s key findings was that students from lower socio-economic backgrounds were “less likely to move” to London. One such measure that the Cabinet Office is recommending is to take graduate recruitment
“outside of London by establishing regional assessment centres”.
The most recent “Government’s Estate Strategy” expresses a commitment to
“turn around the prevailing tendency to locate head office staff in central London”.
That is Government policy.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Does my hon. Friend agree with me, a London MP, that centralisation and the relocating of staff presents a problem for London? It leads to congestion, more overheating, incredibly expensive accommodation, and so on. Most graduates cannot afford to rent in London, let alone buy their own property.
Paul Blomfield
My hon. Friend makes an important point. No one wants this to be seen as a north versus south issue. The proposal flies in the face of logic for both north and south. It makes no sense to add to the overheating in London, so we share a common agenda on that.
Colleagues commented earlier on the northern powerhouse agenda, which Sheffield and south Yorkshire have been deeply involved in and embrace. It is about encouraging the private sector to invest in the north, to build there, to relocate there, and to revive its economy, but if the very Department responsible for building the northern powerhouse wants out of the north, withdrawing 247 highly skilled jobs from the local economy with it, what message does that send?
Today’s debate came about because our key questions were not answered by the permanent secretary. Now is the Minister’s opportunity, so I want to conclude by asking four questions, to which Members and the hard-working staff of the BIS office in Sheffield have been seeking answers since January. I gave the Department advance sight of the questions last Wednesday to allow for full consideration and comprehensive answers. First, in reaching the decision to close the Sheffield office, what assessment has been made of the additional costs of moving the posts to London? That is the core question that we have been asking all along. Secondly, what assessment of the decision has been made against the Government objectives of moving out of expensive Whitehall accommodation, diversifying the civil service, and not locating head office functions in the capital? Thirdly, what assessment has been made of the impression created by the decision to move to London the functions of an office of the Department responsible for the northern powerhouse? Fourthly, aside from the proposals to centralise policy functions in London, what consideration has been given to the other options for achieving the “BIS 2020” objectives?
I understand that the decision, which was at one stage to have been taken by the BIS board tomorrow, has now been postponed and will be announced in the week commencing 23 May. I hope that that reflects a willingness to think seriously about the concerns that have been raised. I hope the Minister recognises that if the proposal goes ahead, the National Audit Office scrutiny we propose in today’s motion will find it flawed. I hope that she will therefore accept that it is the right time and in the interests of good policy making, effective use of public funds and confidence in the case for the north to exert ministerial authority and pull the plug on the closure of the Sheffield office.
Paul Blomfield
I thank the Minister, the shadow Minister, and all Members who have contributed to what has been a thoughtful debate, with a cross-party consensus in support of the central thrust of Government policy to devolve jobs, but with concern expressed about this decision. I acknowledge and am grateful for the Minister’s frank reply in saying that no full assessment of the costs has been made. The motion simply seeks what other Members have called for, namely a proper cost-benefit analysis so that any decision can be made on the basis of demonstrable and provable facts, and the commitment that all that information will be available—perhaps through the National Audit Office, as we suggest—before the BIS board makes its decision. That is an important step, and I thank Members for their participation.
Paul Blomfield
I am not sure that I am allowed to give way, but I thank the hon. Gentleman for all his support in this debate and the points that he has made, and I very much commend his double-hub strategy. I am grateful to the Minister for saying that no final decision has yet been taken, and for acknowledging that no cost assessment has been made, which is frankly extraordinary. I hope that a decision will now be made, and I commend the motion to the House.
Question put and agreed to.
Resolved,
That this House notes with concern the Business, Innovation and Skills Department’s proposal to close its Sheffield policy office, moving 247 posts to London; further notes that the Sheffield BIS office proposal runs counter to the Government’s welcome commitment to create a public sector that reflects the diverse nature of the UK following the publication of the Bridge report and also to the commitment in Budget 2016 to move civil servants out of expensive Whitehall accommodation; and therefore calls on the National Audit Office to conduct a cost benefit assessment of the BIS Sheffield proposal.