Ministry of Justice Shared Services

Paul Flynn Excerpts

Tuesday 8th July 2014 Westminster Hall

[Paul Flynn (Newport West) (Lab)]

It is a great pleasure to serve under your chairmanship for the first time, Mrs Osborne.

I have an extraordinary story to tell, of Government ineptitude, which will give us a key to their legacy to the nation. It is a story about punishing success and rewarding failure. The shared services in Newport were set up in 2006. It was a happy occasion. There was a lovely building, and thanks to the enterprising action of the council, shared services were welcomed. It was a marvellous idea to take little inefficient units that operated in prisons throughout the country and concentrate them in one centre, to provide a more efficient service and to save money—which it did. It saved £32 million in the first two years. The staff have by now, through their efficiency, dedication and skills, created savings of £120 million.

What do we do now? Shall we alter a winning team and wreck something that works so well? In this case the answer is yes. The Government, with fanatical devotion to the concept that all that is private is good, wonderful and efficient, and all that is public is bad and inefficient—the heresy behind so many of their failures, which we have witnessed in the past few years—decided to set up an alternative, as an improvement. They ran a scheme, which was operated by a group including the firm Steria. They sought a more efficient way of running the system, rather than leaving it alone and letting it continue to make money and savings for the country.

I shall not go too far into the detail of who is to blame, because, as we know, failure is an orphan and it is only success that has parents. However, Steria had a leading role in the operation from 2011. What has it achieved? It has achieved a loss of £56 million. What has it produced? Nothing of any practical value: that is the simple truth. When people make a loss of that kind, what should we do? Should we dismiss them, or forget about them? No. The Government are setting up a new consortium. They will let Fujitsu run the IT this time, but the project is still run by the French company Steria. It has a contract from the Government. We shall be looking for some of the facts from the Minister this morning, but that contract could lead to the loss of jobs or of 49% of the work—we cannot translate that into jobs. It could mean the offshoring of jobs, probably to India.

[Jessica Morden (Newport East) (Lab)]

As my hon. Friend will be aware, the Minister said during questions last week that he is against offshoring jobs in his Department. Does my hon. Friend share my concern about the fact that the Cabinet Office seems to have no such qualms, and does not Steria’s record of cutting and offshoring jobs and closing offices speak for itself?

[Paul Flynn]

My hon. Friend is right. There is general puzzlement about the conflicting statements that come from the Government. Perhaps they can be cleared up this morning. There is a scheme: the jobs will be privatised, and I do not know how the Government can exercise control if that happens. We are told that they are against offshoring jobs. The Prime Minister said so a short while ago; he said he wanted us to “reshore” jobs and bring them into this country. It seems an act of madness to take successful jobs from an initiative developed in Newport and send them overseas, and to spread the profits to a foreign company—a French company.

I am rather surprised when I see the Minister who is replying to the debate, whom I have greatly admired in his political career. We have been in the House a long time, and in his sensible period, when he was a Liberal Democrat, before his metamorphosis, he would have agreed with every word of my argument, as he has on many occasions. The red boxes have a strange effect, and change people’s personalities, but I am sure that it is possible to revert. I was the right hon. Gentleman’s constituent for many years. He used regularly to send me letters and would ask me what the Lib Dems should do for the country. I always made interesting answers and suggestions, not all of which he followed up.

[The Minister of State, Ministry of Justice (Simon Hughes)]

Some I did.

[Paul Flynn]

Some he did, yes. He did not give us eternal life or a Labour Government, which were the main things I thought would be of benefit.

[Bill Esterson (Sefton Central) (Lab)]

I congratulate my hon. Friend on securing the debate. The issue affects my constituents as well, because some of them work at the Bootle site for the Ministry of Justice. They have been commended for their work over many years. They are loyal civil servants and are deeply worried at the prospect of privatisation, losing their civil service status, and ultimately losing their jobs to outsourcing. Does my hon. Friend agree that it is surely the role of Government, and not just constituency MPs, to look after our constituents’ interests and keep jobs in this country for them instead of letting them be outsourced?

[Paul Flynn]

It was touching when my hon. Friend and I talked to our constituents, who went on strike a fortnight ago. For most of them it was the first time they had done that in their lives. They would not have expected to go on strike. One had been displaced from the Passport Office, following another Government scheme to reduce it to such an emaciated state that when there is an unusual call on it, it cannot cope—the system is at the point of collapse. Those people have done nothing wrong. As my hon. Friend said, they have won accolades for their efficiency and service; but now their jobs hang in the balance. There is no certainty. They cannot look forward to a future beyond 12 months.

There is no sign that anything can be working efficiently. I wish the Government would learn the lesson. They seem to be blind on the issue, given what they did in relation to Atos. Atos broke a pledge that helped it to win the £184 million disability assessment contract. That was a story of chaos and loss, and the great suffering of hundreds of thousands of people—because of the inefficiency of Atos. Every MP has heard heartbreaking stories of people who have been misjudged and badly treated by Atos. In four out of 10 cases where the original decision was questioned, the challenge was upheld. That episode was a terrible error.

In addition, G4S had a £284 million contract to provide 10,400 staff for the Olympics; but it fell spectacularly short and we needed 5,000 members of the armed services to come and fill the gap. Where was the brilliance and perfection of the privatised services then? Serco charged taxpayers far too much for monitoring criminals, under a contract dating back to 2005. What happened was a rip-off, and Serco had to repay £68 million. Why give those people, who are little short of criminals in their behaviour, those contracts? Why favour them as we do? Capita, which in the House of Lords was referred to as “Crapita”—we would not use such language here—won a £50 million contract to run individual learning accounts programmes, which collapsed. There were mounting allegations of fraud among the programme providers and concern about the costs, which went £93 million over budget.

The Ministry of Justice had a £42 million contract for interpretation in the courts, which stalled at the outset after being given to a small company that Capita acquired to run the contract. Some 6,417 complaints were recorded by Capita, and 680 trials in magistrates courts and 34 Crown court trials were ineffective as a result of interpreters not being present.

There is a long catalogue of a Government favouring private firms over the well-established civil service ethic and systems that have served us well, and they are about to do the same again. Will the Minister tell us, and make it clear to my constituents and those of my hon. Friends the Members for Sefton Central (Bill Esterson) and for Newport East (Jessica Morden) and others, what the position is? Are their jobs in danger of being sent offshore? Will he give an absolute guarantee that that will not happen?

[Bill Esterson]

I am interested in what my hon. Friend says about security because the issue has also been raised with me. My constituents are very worried that in an answer I received from the Secretary of State last week he ruled out being able to protect any of the jobs. Not only will they lose their civil service status, which is much valued, they will lose their jobs. When they stop being civil servants, they will not be able to apply for vacancies elsewhere in the civil service because they will no longer be civil servants. That is a real concern for them, as is the suggestion about outsourcing and jobs going overseas that my hon. Friend mentioned.

[Paul Flynn]

My hon. Friend makes a powerful point that we are very much aware of. Civil service status is prized. We have forgotten to appreciate the value of civil servants, which has been neglected. In the last 24 hours, a Minister was highly critical of the civil service ethic and attacked the core of the civil service, which has benefited us so richly for the past 150 years. There is a move towards politicising civil servants. Many of my constituents work for the civil service, often not for very great salaries. The Government’s failure to appreciate their value and worth is a terrible blow and an act of ingratitude.

My constituency and many other places in Gwent have benefited from the influx of civil service jobs. We suffered greatly from the loss of manufacturing industry and the fact that the Patent Office, the Office for National Statistics and the shared services centre came to my constituency saved the economy in a way that is greatly valued. The city and the country—Wales—have a huge amount to lose if the Government behave in this cavalier way with civil service jobs. They should have the security of a continuing contract, and richly deserve loyalty from the Government. I look forward to the Minister’s assurance on that. People should not have been driven to strike, but who cannot appreciate their anger against an ingrate Government?

At the World Economic Forum in Davos on 24 January, the Prime Minister referred to reshoring jobs and said he wanted Britain to become the “reshore nation”. He announced the creation of a new Government body to encourage companies to locate in the UK jobs that would once have gone to the far east. We seem to be seeing the reverse. A Minister said in the House last week that he was against exporting jobs and siphoning them off to other countries. That is now becoming unpopular because people do not like dealing with confusing accents and it is no longer as commercially attractive as it once was. It does not seem to be the future. The Government’s duty is to remain loyal to their staff and to return the loyalty and skills of the workers by believing in them and fighting for their jobs, not to desert them and leave them with considerable anxiety and worry, and perhaps worse ahead with loss of employment and destitution.

--- Later in debate ---

[Simon Hughes]

No, I am going to finish what I have to say, otherwise I might not be able to complete my remarks in the time. The Secretary of State made a commitment and we have had reference to the commitments from the Prime Minister. I repeat the commitment to British jobs here in the UK, and I hope that that is very clear to everybody.

[Paul Flynn]

Will the Minister give way? There is an important point here.

[Simon Hughes]

Yes, all right.

[Paul Flynn]

Who will take this decision? There seems to be a different view in the Cabinet Office on this. Can he give a guarantee that the Ministry of Justice will have an absolute ban on these jobs going abroad?

[Simon Hughes]

I have not been in post since the beginning of this whole debate, but according to my understanding, the deal is that any such proposal to offshore would require the consent of the Ministry of Justice, and the current Secretary of State has made it clear that while he is in office, he would not give that consent. I repeat that on my own behalf and on behalf of the Ministers in the Department.