BIS Sheffield/Government Departments outside London

Bill Esterson Excerpts

Monday 9th May 2016 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I join Members in paying tribute to my hon. Friend the Member for Sheffield Central (Paul Blomfield) and the other Members who secured this important debate. We have had a good debate, and I am pleased to see the Secretary of State and the Minister of State in their places to listen to the advice they have been given, by Members from all parties, about what needs to be done. I sincerely hope that they listen to the comments that have been made, take them on board and go away after the debate and act on them.

On 28 January, the closure of the BIS office in Sheffield was announced, with the loss of 247 jobs. I remind the Secretary of State that he said at the time that the closure was to save money. The Minister of State told the House the following day, in response to an urgent question, that

“we take the view that this is the best way to spend public money more efficiently and more effectively.”—[Official Report, 29 January 2016; Vol. 605, c. 562.]

Yet Members from all parts of the House have challenged what both Ministers said at the time, because of a lack of evidence and a lack of any kind of business case. We have heard today some of the evidence about costs, including the fact that staff in Sheffield are employed at an accommodation cost of £3,190 each, while at Victoria Street in London the figure is more than three times as high, at £9,750. Adding London weighting takes the figure well over £12,000. That is hardly a case of saving money.

What is the reason for closing the Sheffield BIS office? A number of suggestions have been made. Is it so Ministers can have water-cooler conversations with staff in Whitehall? Is it part of a desperate scramble for cash to plug the Chancellor’s black hole, as the BIS proposal for the privatisation of the Land Registry appears to be? Or is it because the Government know that many staff will leave and costs will be reduced as a result? Whatever the reason, the Minister and the Secretary of State really should tell us. They should tell us what the strategy is and how the plan will work, because, so far, what BIS has come up with does not seem to add up in any way, shape or form.

As we have heard, in the Budget, the Bridge report and the estate strategy, there is a cross-government move to recruit high-calibre staff outside London and to move Departments out of London to continue a trend that has been going on since the 1960s. Other Departments recognise the benefits of a diversified civil service, so why is BIS moving in the opposite direction? Staff in BIS have been told that Ministers need their advisers closer to them, but why do other Departments take the opposite view? Why, after the initial announcement, were staff later told that the move was due to computers and phones not working properly? I know that the quality of our broadband service is one of the poorest of any major economy, but even so we might be forgiven for thinking that the IT systems could be fixed even by this Government. To give an example elsewhere in Government, the Department for Education says on the subject of the benefits of a regional approach:

“We benefit from maintaining sites around the country—we get alternative perspectives on our policy issues, we can draw from a wider recruitment pool, and employing people in sites outside London helps to keep costs down.”

That says it all, does it not?

The many experienced staff who do not wish to relocate to London will of course leave a gap at BIS at a time when it faces serious challenges wherever we look, such as in the steel crisis and the need for significant support for manufacturing, and in the delay announced by the Minister for Small Business, Industry and Enterprise to the introduction of the pubs code and in setting up the office of small business commissioner. All those important and demanding policy areas will need the expertise of experienced civil servants. In Sheffield, there is a need to support our universities and the ambitious plans for a mass expansion of apprenticeships. Such a need for experienced staff to give top-quality advice to Ministers could not be more important; yet BIS is taking a big gamble with its ability to do its job as many of those experienced staff will leave. That point made has been made in the House of Lords by the BIS Minister, Baroness Neville-Rolfe.

I want to pay tribute to hon. Members who have spoken in this debate. My hon. Friend the Member for Sheffield Central spoke with great expertise, and from his experience of talking to staff who are his constituents, about the benefits of regional offices. The hon. Member for Cardiff North (Craig Williams) made some excellent comments about the importance of the work that goes on in his constituency, including in the Insolvency Service. He supported requests for proper evidence to be provided to support, and to help us to understand, the proposals made by BIS.

My right hon. Friend the Member for Rother Valley (Kevin Barron), who secured the Westminster Hall debate, made the point that the success of BIS in its current location is crucial for his constituents and those of several other Members of the House. He mentioned the lack of relocation expenses, and he might have added the lack of extended travel cover as another reason why these experienced members of staff simply cannot do anything but accept redundancy.

My hon. Friend the Member for Sheffield, Heeley (Louise Haigh) talked about the apparent thumbs down to the staff in BIS by the Department’s leadership, which is in stark contrast to the excellence of the many people who work there. My hon. Friend the Member for Sheffield South East (Mr Betts) questioned the Government’s commitment to their own devolution agenda given their decision to move the centre for the northern powerhouse to London and away from the north itself.

We have had excellent contributions from Members on both sides of the House, including the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), forEdinburgh North and Leith (Deidre Brock) and, indeed, for Warrington South (David Mowat), who pointed out the contradiction between this move and the northern powerhouse and the contradiction between the “BIS 2020” document and the estate strategy.

So much has been made by Ministers of the so-called northern powerhouse. Having a network of Government offices and key staff in the regions is a vital part of understanding the needs of the whole country and avoiding the sense that all policy is solely about the Westminster bubble. It is therefore baffling, at the very least, that BIS of all Departments might even consider withdrawing from the regions, given the importance that Ministers say they ascribe to the northern powerhouse. BIS should be the eyes and ears of Government out and about in building key local relationships with business, universities, colleges, local government and, of course, trade unions. Why are the trade unions saying that they have not been allowed to have discussions with management about the proposals? There is also of course the message received by the private sector and local communities that the Government just are not serious about supporting the north. I am afraid that actions speak louder than words, and the term “the northern powerhouse” is more and more becoming just a set of words, and meaningless ones at that.

It strikes me that the way the Government are going about their reorganisation has not exactly been business-like. For a start, a forward-looking business would use technology to communicate. Video conferencing is available at the touch of a button and is a very cost-effective way of working, because it saves travel costs and time. I do not know whether the Secretary of State has ever used video conferencing. When he was in Australia at the time of the Tata Steel debacle, he could have used it to speak to people in Mumbai at the annual general meeting that he should have tried to attend to look after our steel industry. [Interruption.] If he turns around to talk to someone behind him, he should perhaps expect me to make such comments. [Interruption.] I am sorry; it was a board meeting. I appreciate the Secretary of State correcting me about the meeting in Mumbai.

Video conferencing and other technologies allow staff to work around the country, closer to home and to family, and to be more productive. Simply put, it is common practice for national and international businesses to have a strong regional presence and to use technology where possible. Should the Government not be at the forefront of using technology? Of course they should.

In any restructuring, would not business produce a sound business plan? Such a plan would evaluate the costs and benefits of the current arrangements set against those of the alternatives. Yet we have not been given a business case by the Secretary of State or the permanent secretary. Two Select Committees were not given a business case, and even the recall of the permanent secretary to give evidence only confirmed the initial suspicion that there was no case for the defence, as he admitted he had not sought to put a price on the changes.

Questions therefore remain about why BIS proposes to close the office in Sheffield. One clue can be found in the single departmental plan to disclose that capital receipts are expected to be achieved from the sale of the many sites around the country that BIS plans to close. Such sales suggest that they are savings for short-term gain. In the case of the Sheffield BIS office, that is at the expense of massively higher annual costs in Whitehall and significantly reduced expertise in supporting business and the economy. The businesses that rely on BIS, including the universities and colleges that rely on BIS in Sheffield, do not operate without proper business plans and neither should the Government or Departments. They will be concerned that the Government do not follow best practice in the way they operate. The sad reality is that BIS Ministers and senior management are developing a reputation, but it is not the reputation they should have. It is a reputation not for competence but for being a complete shambles. That cannot be good news for Sheffield or for the country.

We have been told that the decision has been suspended for two weeks. When the Minister responds, will she tell us that in those two weeks she will find the business case for these decisions and make sure that it is in the public domain, so that it can undergo proper scrutiny, including by the two Select Committees and through consultation with the trade unions, and decisions can be taken on a full evidence base? We need to know whether this is a cost saving, an improvement in policy, or a combination. Whatever it is, the evidence will show. The Minister needs to put that evidence in the public domain and show us, either way, so that proper decisions can be taken, and full public scrutiny of those decisions can show whether the Government are right.