§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]
§ 10 pm
§ Mr. Stan Thorne(Preston, South) rose—
Mr. Deputy Speaker (Mr. Bryant Godman Irvine)
The hon. Gentleman should realise that his time is running out.
§ Mr. Thorne
Yes, Mr. Deputy Speaker, but I should like to be heard, and that is not really possible when hon. Members are leaving the Chamber.
It is strange that we should be discussing the proposed closure of the North-West area office of the Manpower Services Commission's employment service division at Preston in view of the temendous increase in unemployment in the areas covered by that office. It was only at midday today that I received a letter from the vicar of St. John the Evangelist, Whittle-le-Woods, in which he referred to the concern of committed Christians about the level of unemployment in the area, the serious threat to family life and the stability of young married families, which is adversely affected by the stigma of unemployment and lack of work.
The North-West ESD area is the smallest of the 18 areas nationally. It also happens to be the most efficient and cost-effective area, which leads the field in placings per staff unit and costs per placing. That is no accident of chance, as the smallness of the area gives a personal contact and rapport with local offices that larger areas cannot achieve. The West Midlands is a classic example of that.
To make the Manchester and Merseyside areas, which form part of the suggested closure, even larger by adding two of Preston's districts to each will only lower their already poorer performance. I shall return to this in a moment.
A survey team came to Preston to look at the work of the area office. The staff and others feel that the answer had already been determined, and thus the report reflected 410 that fact. The main functions of the employment services divisions are to provide access to a free placement service, free employment service and free disablement resettlement service. They are in the front line of the training service. They continually check the work of the jobcentres within their areas. Even the relatively new rehabilitation centre at Ingol, in Preston, would, if the proposal to close went ahead, become administered by Liverpool, which is about 30 miles away.
What does the proposed closure at Preston really involve? One part of the proposal is to add East Lancashire and Cumbria to the Manchester area, which would be geographical nonsense. Cumbria would be virtually detached from the rest of the area as rail routes, the A6, the M6 and so on all run through Lancaster. which, paradoxically, would be in the Merseyside area. From Manchester to Carlisle is 118 miles. The journey by rail necessitates a change at Preston, with very rare exceptions. Similar travel difficulties apply to Barrow, Whitehaven and Workington—and, of course, to the smaller offices which they in turn control. This has certainly been under-emphasised in the report of the survey team.
Communications from East Lancashire to Manchester are not so difficult, but they are not as good as to Preston, from which a network of bus services operates to virtually every town in East Lancashire.
East Lancashire has no affinity with Manchester. It would make as much sense to tack it on to Leeds, about the same distance from Burnley. Cumbria has absolutely no affinity with Manchester. It is a large and undeveloped district, remote from any of the traditional administrative centres. It has nothing in common with Newcastle, its former overlord. Though difficult for whoever runs it, the past six years have shown that it is best run from Preston, as any staff in the Cumbrian offices will confirm.
To add central Lancashire and the Lancashire coast to Merseyside is even greater nonsense. Chorley, for example, is almost within the Greater Manchester area, while the Fyldes, Morecambe and Lancaster are totally alien to anything connected with Merseyside, with which communication by road is indifferent and by rail hopeless.
A check of annex M to the survey report shows that the proposed closure of the North-West area would achieve staff savings of 11.5 staff units, namely, one principal, one SEO, two HEOs, two EOs, three COs, two typists and 0.5 of a personal secretary, although I would not want to go into that too closely.
The main effect of this would be to save the two receiving areas from achieving staff reductions of 11 on Merseyside and nine in Manchester, which would otherwise be required of them by 1 April 1982. Instead, Manchester would lose two staff units only and Merseyside the 0.5 staff unit from its present complement. The price for this would be the extinction of an area which, as I mentioned earlier, has a much better record. One might well ask, what price efficiency?
On what do I base the reference to poorer records in the other two areas? Some figures must be quoted. The staff in the local and district offices of the North-West—the area that it is suggested should be closed—during the quarter ending September 1980, placed 15,985 people in jobs. The ratio, therefore, of placings per unit of staff was 41.63 to 1. In Manchester, the staff is 624, its placings 411 were 19,918, and its ratio was only 31.92 to 1. Merseyside, with 632 staff, had placings of 20,082, a ratio of 31.78 to 1.
Clearly, those figures show that the North-West's role in terms of placings is a much more efficient one than either of the two other areas which it is suggested should take over the work presently done by it.
The staff cost of the 11.5 staff units "saved", if the closure goes ahead, would be £96,724 per annum at 1980 salaries. Much of that alleged saving—which amounts to less than £2,000 a week—would be clawed back through increased telecommunication costs and through increases in staff travelling and in night subsistence claims, notably for those training in Manchester and for the area office staff who visit outlying offices. Any savings that accrue are likely to be puny in comparison with what will have been sacrificed to achieve them.
Let us assume that the closure of the North-West area office goes ahead. The reallocation of the present staff of about 35 will present serious problems. There will be few, if any, vacancies in Manchester or Merseyside for the mobile grades, which comprise two SEOs, five HEOs and 11 EOs. Although the two SEOs could probably be slotted into managerial posts, there is only one foreseeable HEO vacancy. Already, supernumerary EOs are awaiting posts in this area. As a result, four HEOs and 11 EOs are likely to be supernumerary at an annual cost of about £130,000. If one adds to that figure the non-mobile grades—say, 12 clerical officers and a couple of typists—few of whom can be readily reallocated within daily travel distance, the total annual cost of supernumerary staff increases to more than £200,000. That sum far exceeds the ostensible "savings" to be made from closing the North-West area office.
The merits of retaining the North-West area office were fully demonstrated three years ago. They are equally viable now. At that time, the former chief executive and executive director agreed that if Lancashire were welded on to Manchester or Merseyside those areas would become too cumbersome. During that Parliament, I took a deputation to meet the former Secretary of State for Employment, my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth). Along with others, we tried to persuade him that it made sense to retain that office. He clearly accepted that view, not only on the basis of our representations but also on the basis of evidence from other sources.
I have mentioned staff costs, but I now turn to the subject of staff morale and welfare. Many of the staff at Preston area office have lived under a vague sort of sword of Damocles for the past three years or more. Despite that continuous threat, it has remained an efficient area. The staff deserve a break. They deserve to be treated in a better way and should not be kicked about as supernumeraries or as transferees to inconvenient and unwanted vacancies in other arms of the Department of Employment's group, where they would probably need retraining. Since they have their own cuts to contend with, they would not be particularly welcomed by other staff, who are faced with similar difficulties.
At present, to effect economies, Lancashire and Cumbria cannot be adequately serviced from remote control points in Manchester and Liverpool. Central Lancashire new town is developing as a logical 412 counterbalance to those two centres of southern metropolises. Preston is the administrative centre for Lancashire and the centre of the new town development. The loss of an area office will only sow the seeds of problems in the near future when its reinstatement will become essential and a matter of urgency.
When the idea of closure was mooted three years ago, there were then Members such as the hon. Member for Lancaster (Mrs. Kellett-Bowman), the right hon. Member for Penrith and The Border (Mr. Whitelaw), the present Home Secretary, the right hon. Member for Westmorland (Mr. Jopling), now Parliamentary Secretary to the Treasury, and others who showed a considerable interest. They collectively opposed the plan, as I understand it. I wonder where they now stand m regard to this plan.
I hope that the Under-Secretary has studied the map and has seen how unrealistic it is to merge Cumbria with Manchester. A glance at the map shows Preston to be at the centre of the area that we are discussing. The growth of the central Lancashire new town and the central role for Preston must be maintained. I urge upon the Minister the need to reject this proposed closure.
I end by referring to letters from the chairman of the central Lancashire district manpower committee, the chairman of the East Lancashire district manpower committee and the chairman of the Blackburn and district disablement advisory committee, which I am sure the Minister has seen. I am sure that he has noted their collective opposition to the suggested closure. I hope that he will take serious note of their representations. Some of the Under-Secretary's colleagues—I notice the hon. Member for Nelson and Colne (Mr. Lee) sitting behind him—will be equally concerned for him to reappraise the situation and to accept the need to forget about what he may consider an economy and to recognise that to maintain efficiency in this area of the North-West is essential if over the next few months we are to meet the needs of the growing number of unemployed.
§ The Under-Secretary of State for Employment (Mr. Jim Lester)
First, I assure the hon. Member for Preston, South (Mr. Thorne) that I appreciate his comments and the comments of his clerical correspondent over the problems of unemployment in the North-West. I hope that he will draw to his correspondent's attention the massive Government support that goes into the North-West through the Department of Industry and the Department of the Environment and through the development of new ideas such as the Urban Development Corporation and the enterprise zone, and, indeed, the package of new measures that my Department announced only on Friday, a considerable part of which goes into the North-West.
However, I turn to the issue that the hon. Member raises. First, as I made clear in reply to questions earlier this month, no decision has yet been taken to close the North-West area office of the Manpower Services Commission's employment service division. I therefore welcome the interest shown by the hon. Member and the opportunity to put the situation clearly before the House. I should like to explain the reasons for the proposal to merge the North-West area with the adjacent areas of Merseyside and Manchester—a proposal that includes the closure of the employment service division's North-West area office at Preston.
413 As the hon. Member is aware, the present Government have been concerned to reduce the size of the Civil Service. MSC staff numbers had increased rapidly and could not be exempt from reductions. The Commission's corporate plan and manpower review set out the position following the initial reductions, and we asked for a further reduction of 2.8 per cent. across the Civil Service as a whole in March of this year in connection with the Civil Service pay settlement. The proposal that we are discussing tonight is one measure designed to enable the employment service to meet its share of these economies. Moreover, my right hon. Friend the Prime Minister announced on 13 May our intention of reducing the size of the Civil Service to about 630,000 by 1 April 1984. The MSC again will have to bear its share of these further reductions, although no decision has yet been announced on the size of the further reductions that we shall be seeking from it.
This further economy underlines the need to streamline administration wherever possible. The employment service division—in common with other parts of the MSC—looked at what economies it might make, and it included in its consideration the scope for rationalising and simplifying its area organisation. As a result, an internal survey was undertaken, which recommended the merging of certain areas, of which the North-West was one.
The MSC also considered major changes to the North-West area some 18 months ago, but the issue was deferred pending a further review. Now, of course, the new factor to be weighed is the need for economies.
I stress that, in deciding where the various changes are to be made, the MSC has sought as far as possible to preserve the resources available for its front-line services to the public. In the case of the employment service division, therefore, the emphasis has been on continuing to give the maximum possible assistance to the unemployed through the work of jobcentres and employment offices. This assistance involves not only obtaining and filling vacancies but providing unemployed people with access to training courses and the MSC's special programmes. This has meant, however, that the ESD's staffing reductions have particularly affected support and back-up services, which are provided by an administrative structure that includes 18 area offices and a head office.
The Government believe that these priorities are right. It could, nevertheless, be argued that pro rata cuts could be made to the employment service division's area organisation, so that the present network of area offices could be preserved, although each office would be smaller. In fact, such measures have already been taken in response to the Government's request for staffing reductions. However, there are limits to how far this approach can be taken. Below a certain size, an area office would be unable to offer its local offices a comprehensive range of support services covering specialised functions such as personnel, psychological and technical support. Accordingly, it has been necessary to consider amalgamations, particularly those involving smaller areas. In this way, support services can continue to be provided, but in a more cost-effective way.
Of course, as the hon. Gentleman has suggested, there are limits to how far amalgamations can go. Too large an area could mean problems of staff relations, of inflexibility and of remoteness of local needs.
414 But the North-West area office is very small, with a cadre of just under 40 staff, and there is little scope for further reductions there if it is to continue to be effective. On the other hand, the MSC's study has shown that significant economies could be achieved by apportioning the area between the Merseyside and Manchester areas. I emphasise again that this would not entail any detriment to the ESD's services to the public in the North-West.
Although both the Manchester and Merseyside area offices would require a small increase in their staffing to deal with their newly expanded territories, the difference between this increase and the reductions resulting from the closure of the North-West area office at Preston would give worthwhile savings. In my written reply to the hon. Member on 13 November, I indicated that eight and a half posts would be saved, with a cash saving of £88,000. The figures have since been examined afresh, and I am now advised that there would be an overall staff saving of about 11 or 12 posts. Leaving aside non-recurring costs—staff transfer expenses and so on—the annual saving would be about £98,000. In addition, a further annual saving of £23,000 would accrue when the lease of the Preston area office premises was reassigned.
The employment service division of the MSC is convinced that the amalgamation of the North-West area would not have any adverse effect on the level and effectiveness of its services to the public in the area. Jobcentres and employment offices in central Lancashire and the Lancashire coastal districts would continue to be administered just as effectively under the Merseyside area and the offices in Cumbria and East Lancashire under Manchester. Furthermore, there will be no change to the territorial responsibility of the MSC's regional manpower services director for the North-West, who is located in Manchester, or to that of the employment service division's executive director for Wales, West and North-West, who is also based in Manchester. I should also make it clear, in case there is any confusion on the point, that the proposal to close the employment service division's area office at Preston is not related to a proposal, which is still under consideration, for the transfer of Cumbria to the Department of the Environment's North-West region.
As would be expected, the hon. Gentleman raised the question of the reallocation of staff. Careful consideration has been given to the reallocation prospects of staff at the Preston area office. Many would be absorbed locally—for example, by the special programmes division of the MSC, which, due to an expansion of the special measures in the North-West region, will have posts to fill, nine of which will be in Preston. The MSC has assured me that if the proposal that we are considering were implemented there would he no compulsory redundancies of staff from the Preston area office, although in some individual cases redeployment might take a little time to achieve.
I understand that the MSC has still to approve the proposed change. In advance of that, a meeting has been arranged with the staff associations concerned so that their views can be taken fully into account. I understand the hon. Gentleman's concern, but, despite his geographical concern, I am satisfied that the service will not be affected and that the staff can be reallocated satisfactorily without compulsory redundancies. I undertake to ensure that the points raised by the hon. Gentleman are drawn to the attention of the MSC.
§ Mr. Stan Thorne
One of the matters of concern, not only to me but to colleagues in Blackburn and Nelson and Colne, is that when the area on the central west side is married to Merseyside it will be wedded to a department which already has a massive problem because of its much higher level of unemployment. If the offices in Merseyside have the pressure of their own area on them and there are problems outside in the vague northern parts of Lancashire, which of them will be the first concern of those offices? That applies also, though perhaps to a lesser extent, to Manchester. Will those in Nelson and Colne, Burnley and further north, as far as Cumbria, get the sort of attention that the local offices have given to Manchester's problems? There is grave doubt about that.
§ Mr. Lester
I appreciate the hon. Gentleman's doubts. He is closer to the ground than I am in terms of the situation in Preston, but I have never thought of the North-West in terms of the geographical split to which the hon. Gentleman has referred. I have always thought of it as a conterminous area, where the problems tend to overlap. I am assured by the MSC that it is satisfied that the support services to the front-line service, which we all want to maintain, will not be impaired by the proposed change.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-seven minutes past Ten o'clock.