Ministry of Justice Shared Services

Debate between Simon Hughes and Bill Esterson

Tuesday 8th July 2014 Westminster Hall

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

It is a great pleasure to serve under your chairmanship, Mrs Osborne, I think for the first time. I warmly congratulate my colleague, the hon. Member for Newport West (Paul Flynn), who is a former constituent. I did not drive him out. It was his choice, and I was happy to have him living near Elephant and Castle. I understand absolutely his continuing and proper interest in the matter. As he knows, I know Newport fairly well. It is a great city, which became a city relatively recently, which was hugely welcome. He was correct in saying that following the industrial decline of that part of south Wales, where I lived when I was growing up, the ability to have new initiatives such as the Office for National Statistics and other departments, such as the Patent Office, and the shared services centre has been healthy. That is self-evident in the beneficial effect on the economy.

I also welcome the hon. Member for Newport East (Jessica Morden) and her interest, and acknowledge the presence and interest of the hon. Member for Sefton Central (Bill Esterson) who, understandably and rightly, wants to speak up for his constituents who are employed by the Ministry of Justice. I will return to the numbers in a moment.

I want to make a couple of general propositions. First, in case the hon. Member for Newport West has any doubts, I have never changed my view about the politics and assessment of the public and private sectors. I do not have a simplistic view that all private is good and all public is bad. That has never been my view. I have always believed that there may be good public services and good private activity. I also observe that while I have been in this place and he and I were in different positions because I was on the Opposition Benches and he was loyally—sometimes loyally, but often constructively and critically—supporting his Government who were going down the same road in outsourcing and introducing contracts with the private sector for previously public sector jobs. Since I have been in this place, there has been a debate about what jobs should remain civil service and local government jobs, and what should be in the private sector. That is nothing new. It is not a creation of this coalition Government.

I will deal with the key facts and then, I hope, most of the concerns. I am here to listen and it is good that the hon. Gentleman has secured this debate so soon after the latest stage in the process of deciding what will happen to the shared services, and the consultation starting with the unions last month. As he knows, the whole ministerial team is fully apprised of the concerns of those who represent people in this work. There was evidence of that at Justice Question Time last week when a series of questions about that was rightly asked.

[Bill Esterson]

The Minister made a point about outsourcing jobs being nothing new, and there has always been a balance between public and private involvement in public services. The difference this time is that Steria’s track record is open to question, and the £56 million write-off on the IT project is a great example. The question put to me by my constituents was why was there no involvement by staff and the trade union in the in-house bid? Why was it carried out in what they believe were questionable circumstances and why were they not able to win, given the efficiency and high quality, and commendation of their work over many years?

[Simon Hughes]

I am going to try to make these points, because I hope I can address such concerns. If there are any remaining issues and some time available, I will be happy to take further questions.

I ought to add that I saw a bit of the “Newsnight” programme last night; it was actually a former Minister, rather than a current one, who was talking about the civil service. I hope that we would all join together in saying that we think our civil service is an ace organisation. It is one of the best public services in the world and we respect everybody in it. Certainly, as a new Minister in my Department, I want to thank the civil servants who work for us—not just in the Ministry of Justice, but in other public Departments—for the public service that they give.

I entirely understand that a change of the kind being proposed is hugely worrying for staff affected. That is obvious. I know that many valued, hard-working staff in Newport, Bootle and elsewhere will be concerned about the potential impact of the changes on their lives, and I will do what I can to give reassurance, as well as sharing the facts as accurately as I can.

We are talking about just over 1,000 people working for MOJ shared services. The figures I have been given, going up to today, are that the full-time equivalent number in Phoenix house in Newport is 725 and that at Redgrave court in Bootle, it is 103. Here, in Petty France, there are 67 full-time equivalents in the shared services department. There are 31 in the Prison Service college, although they may not in the end be affected, and there are 154 in nationwide teams, so we are talking about just over 1,000 in total.

As part of the shared services reforms, which are part of a wider civil service reform programme, the majority of those staff will transfer to one of the two independent shared service centres, which have been created to work across a wider range of Government Departments and services. Subject to contract, which has not been awarded yet, the independent shared service centre, to which the majority of Ministry of Justice shared services staff will transfer, is, as colleagues know, to be managed by Shared Services Connected Ltd, or SSCL. That is a joint venture between the Cabinet Office and, yes, Steria Ltd, which already manages services on behalf of the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs and the Environment Agency. The Department for Business, Innovation and Skills is also moving its shared services across. The other company deals with much smaller parts of the civil service organisation.

The decision to move to this company was taken following a full evaluation of both the independent shared service centres and the option to remain in-house in the Ministry of Justice. The reason why SSCL was chosen as the preferred framework provider was that it provided the most competitive solution, which—this is very important for all constituents, including mine, those in Newport and those in the north-west—provided the potential to deliver significant savings to the taxpayer. The evaluation criteria included people impact, service delivery, cost and IT.

--- Later in debate ---

[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.

[Bill Esterson]

Will the Minister give way?

[Simon Hughes]

No, I cannot give way—if I can in a second, I will.

Although I have been as categorical as I can, I completely understand that there will be concerns. Change is of course destabilising and upsetting, and no one wants an uncertain future, but the reason why this is being done and why Government have made this sort of decision over the years is that, if we have to make our financial ends meet and to balance our budget, we have to ensure that we deliver public services in the most efficient way possible. Money spent on paying debt is not useful, and paying more than we need to run our public services means that money cannot be spent on other things that we all think are justified, such as the NHS and education.

It is, of course, right that we look to reform how the Government deliver savings and at more efficient ways in which to deliver back-office functions such as HR, finance, procurement and payroll. The civil service is therefore, by definition, moving towards being a leaner and more efficient machine.

May I deal with one matter raised? Steria was selected for the joint venture following competitive and rigorous testing. It is true that Steria was one of a number of suppliers involved in the previous programme. Several other parties were involved, however, and it is not right to conclude that Steria was the cause of the issues with the initial programme, which clearly went wrong. As it happens, Steria was involved with the IT on the previous programme, whereas the IT for the current programme was contracted to Fujitsu, as has been said. It is not possible to make an exact comparison.

The Department would not be pressing ahead with the reforms if it did not have confidence that SSCL was the right option for the future of MOJ shared services. We will listen to the workers in the work force and to their representatives. In the end, I hope that the result will be good for Newport and Bootle, and for the people who work there.

Debate on the Address

Debate between Simon Hughes and Bill Esterson

Wednesday 8th May 2013 Commons Chamber

[Simon Hughes]

I voted for the income tax changes as a package that took many people on low and medium incomes out of tax altogether as a result of the raising of the tax threshold, and only when I was satisfied that people on very high earnings would pay more net. Yes, they had a reduction last month in their top rate of income tax from 50p to 45p in the pound, but with all the other changes that affect them they will make a bigger total contribution to the economy in tax. The hon. Lady knows what I am going to say next. I was here for all the time of the Labour Government, when for every single month apart from the last few weeks the top rate of tax was 40%—not 50%, not 45%, but 40%. The great socialist regime of Tony Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) did not deliver the great socialist nirvana, and that was the time when people in the banks were earning obscene amounts, the likes of which had never been earned before, and they were not dealt with.

On the welfare cuts, the Liberal Democrats argued strongly in the coalition that benefits should not be cut, but that with some inflation-lined exceptions there should be a limited increase this year of 1%. That is what the Government have tried to do. There are exemptions. Changes to housing benefit should not apply to any pensioner householder in the country. Some rates of increase of benefit for people with disabilities are higher than 1% to try to achieve equity. These are all attempts to deal with a welfare bill that is extremely high. It is not pleasant and I do not pretend that it is easy. We would all like to be able to give much more to people who are struggling, and I am very concerned that the bottom 20% should be the priority of this Government in their remaining two years. From the hon. Lady’s Front-Bench colleagues I have heard no answers as to how we pay our bills, deal with the fact that we are paying 120 million quid a day in interest on our debts, sustain the welfare state and encourage people back into work.

[Bill Esterson]

rose—

[Simon Hughes]

I will take one more intervention.

[Bill Esterson]

The Institute for Fiscal Studies is clear that the lowest 20% of income groups are being hammered by the Government’s various changes. How can the right hon. Gentleman justify disabled people being hit, as they have been, by a combination of the bedroom tax, the council tax localisation scheme, work capability assessments followed by their appeal, and having their benefit cut during that lengthy process?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are now on 17 minutes. I was working on speeches lasting no longer than 16 minutes per Member.