CSC: Redundancies

Gill Furniss Excerpts

Tuesday 28th February 2017 Westminster Hall

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend the Member for Chesterfield (Toby Perkins) for securing this debate and for his eloquent words. From the level of detail that he went into, we can be in no doubt about his passion for the subject; I will not repeat everything he said. I also note the excellent points made by many other hon. Members, especially the remarks from my hon. Friend the Member for Preston (Mr Hendrick) about his experiences in his constituency, which has already had the hard knock of job losses at Hewlett Packard, where workers have not received a pay rise for four years.

Labour is the party of working people and we will always stand up for them. My hon. Friend the Member for Chesterfield set out plainly the impact that the redundancies will have on CSC workers and the potential knock-on effect on public services. By March, the company intends to make 1,600 working people—a third of its UK workforce—redundant. At the end of March, it will merge with HP Enterprise Services to form DXC Technology, and the new company will be the largest single IT services supplier by quite a long way. In the run-up to the merger, CSC announced two redundancy programmes totalling 1,600 redundancies from 5,400 staff. Those are just the latest in a long line of cuts at CSC, which has had nine separate redundancy rounds this financial year as well as reducing its contractor programme.

The cuts are being rushed through, causing chaos within the company and huge dismay for CSC workers. Some of the roles are being offshored, but that is usually done in a controlled manner. We must consider that, with the scale and the speed of the cuts, CSC will endanger its own ability to provide its IT services; that is the view that we have heard from other hon. Members today, as well as from Unite, the union that represents many CSC workers. CSC provides critical IT systems for many private and public sector organisations, including the Metropolitan police, the NHS, Network Rail, civil nuclear fuels, and the Passport Office. Any knock-on effect to critical IT services could have very serious consequences.

Let us be clear about what is happening. The redundancy programme seems to be a knee-jerk reaction in order to reach arbitrary financial targets and ensure a favourable merger for CSC shareholders, which are largely US financial institutions, pension funds and hedge funds. If the targets are achieved, CSC’s senior executive team, which is based in the USA, will share out $90 million in bonuses. The chief executive officer, the chairman and the president will get between $37 million and $44 million—that is just one person, by the way. Needless to say, the nine members of the executive leadership team are all men, as are eight out of the nine directors. Senior managers of large parts of the UK business who have questioned the process have been removed. I have heard from Unite, the largest union in CSC, that throughout 2016 CSC’s UK management repeatedly advised it that the UK business was healthy and profitable. So this is not about emergency measures to save a failing business; it is corporate greed that will have an enormous impact on the CSC workers who face redundancy and potentially on the public services that depend on CSC’s IT systems.

In June 2013, the then Chair of the Public Accounts Committee, my right hon. Friend the Member for Barking (Dame Margaret Hodge), described CSC as a “rotten company”. Sadly, it seems that nothing has changed. It certainly appears that CSC is dangerously and negligently putting critical parts of UK infrastructure, Government services and private industry at risk, as well as unceremoniously getting rid of 1,600 workers in a quest for a successful merger and bumper bonuses.

I look forward to hearing the Minister outline how she will protect British workers and public services. Will she be willing to carry out an impact assessment of the critical IT provision that CSC currently delivers for many Government services? Also, will she please tell us how she will support the workers who face redundancy? Finally, I would like the Minister to comment on how supporting a company that often makes redundancies and then outsources the jobs overseas can possibly benefit our community, and how it can possibly be described as looking after UK workers.