§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.1.23 am
§ Mr. Eric Martlew (Carlisle)
I apologise for keeping the House up even longer. The important matter that I bring to the attention of the House concerns the proposed transfer of the RAF unit DDSM 15 from RAF Carlisle to Harrogate. Although the unit is outside my constituency—it is in the constituency of the hon. Member for Penrith and The Border (Mr. Maclean)—many of the 70 employees whose jobs will disappear are my constituents and they have asked me to make representations on their behalf. I understand that the hon. Member for Dumfries (Sir H. Monro) has received similar representations and wishes to speak in the debate. I welcome his support.
The work carried out by DDSM 15 consists of ordering and purchasing all the necessary spare parts for the American-built aircraft in service with the RAF. That represents 30 per cent. of all the aircraft in service with the RAF and that figure will soon be increased by the Government's decision to order AWACS. Therefore, the decision is vital to the people in my area, and it is also 'vital that we do not take a decision that may he detrimental to the country's defences.
I want to examine why the unit was placed at Carlisle in the first place. The decision was taken during the 1960s to disperse jobs to areas of high unemployment. The number of unemployed people in my constituency then was half what it is today. When unemployment has doubled in my constituency why in 1987, are we talking about transferring jobs that were brought to the area to reduce unemployment in the first place? It is bad enough that we are talking about it.
There could be some obscure logic in the proposal it' the Government wanted to transfer the jobs to an area of even higher unemployment. I hope that the Minister is listening to me. The official unemployment rate in my constituency is 10.3 per cent., although I could argue that the real figure is 13 per cent. The jobs are intended to be transferred to Harrogate which is one of the few bright spots for employment in the north of England. Unemployment in that area is at the relatively low level of 6.1 per cent.
No wonder that my constituents and the people in the surrounding area feel very aggrieved at the Government's decision to take away job opportunities and send them to what my constituents consider to be a much more prosperous area.
This is not the first time that the Government have considered these proposals. They were considered twice before. As a result of their need to build empires over the years, civil servants have tried to implement the transfer to Harrogate. The first occasion was in 1974 when my hon. Friend the Member for Pontypridd (Mr. John) was the Minister responsible. I have spoken to him and he said that he remembers the case well. There was no justification at the time for the transfers and it was simply a matter of the civil servants wanting everything under one roof. It was also considered by the right hon. Member for Chertsey and Walton (Sir G. Pattie) when he was the Minister responsible. Although the right hon. Gentleman cannot recall the matter, I have no doubt that the reason why the proposal was turned down on that occasion was the same: 1067 there was no justification for it. The proposal has been turned down by a Labour Government and a Conservative Government.
When I went to see the Parliamentary Under-Secretary of State for Defence Procurement, who is the Minister responsible for the proposal, early in November I was concerned to discover that within a week of his taking the decision he was not aware that the proposal had been reviewed by the Conservative Government in 1979. In fact, I had to tell him what had happened. I am worried about how well the Minister was briefed before he was prepared to take the decision.
I want to consider the consultants' report produced by Peat Marwick McLintock on whose recommendations the Minister is acting. I also want to comment on the letter from the Minister announcing the decision about the transfer. After spending 20 years in industry and 15 years in local government, I have seen many management consultant documents. They were not on the same subject, but the format was the same. The recommendations are usually very scientific. On odd occasions I have witnessed the decisions and comments based on unscientific generalisations and statements similar to those made in this case. Normally statements are not backed up by facts because the clients have insisted that the decision is going ahead. I cannot see why a reputable company such as Peat Marwick McLintock, which considered DDSM 15, should produce such proposals. Indeed, page 19 of the study states:Our study shows there is no significant cost advantages in moving DDSM 15 to Harrogate, the justification is in the non quantifiable benefits.It does not refer to any cost benefits. Indeed, if a report such as that went to the board of any major company—I am thinking of a famous supermarket chain—it would go straight into the waste bin because it contains no facts.
The report says there could be staff reductions of 20 if the transfer goes ahead, but at no point does it say where those job savings would be made. It then says that the transfer could cost £585,000, but that does not take into account the heavy costs involved in early retirement payments that would have to be made before redundancy could be offered.
In his letter of 19 November, the Minister takes up the theme of financial savings through a reduction of 20 jobs, but says that the transfer costs would not be £585,000 as suggested by the consultants but the much lower figure of £335,000. In fact, the proposed transfer would increase the numbers employed at the unit, according to the consultants, who sayA requirement to accommodate 75 DDSM 15 staff at Harrogate could, under the worst assumption, result in additional accommodation.The Minister, however, wrote saying:DDSM 15 represents some 70 of the 1,100 staff employed at RAF Carlisle.In fact, the figure of 1,100 is wrong because it should be 980. But I agree with the figure of 70. That number are employed at Carlisle. In other words, if they go to Harrogate, according to the consultants, there will be 75 staff. So if there are 70 now and there will be 75, that is not a saving of 20 staff but an increase of five. In other words, the report is nonsense, and dangerous nonsense.
At present the unit is satisfactorily accommodated at RAF Carlisle. That will be abandoned, even though it is 1068 a good building. The consultants talk about additional temporary or semi-permanent accommodation. I think I see the Minister shaking his head in dissent. I assure him that that is what the report claims. The consultants also say that a new office block will be required in the 1990s, and we are only three years away from the 1990s.
The Minister claims in his letter that there will be no loss of efficiency during the transfer period. In fact, the unit at Carlisle is more efficient now than the unit at Harrogate. The sum of the experience of the people employed at Carlisle amounts to 250 years, much of which will be lost when they refuse to transfer.
The people employed at the unit in Carlisle are not dealing with civil servants in other parts of the country. They deal in the main with representatives of American aircraft companies. Those personal contacts are vital, and if they are lost the efficiency and ability of the unit to respond will be lost, and that must, for two years, affect the efficiency of the RAF.
The Minister then talks about a problem of communications. If that was not a problem in 1974, when the matter was reviewed, and it was not a problem in 1979, when it was reviewed again, why now, when we have all the electronic technology at our disposal and better roads, should it be a problem? Much play is made about the 100 miles between Harrogate and Carlisle, but the main communications in this case are between this country and America. Communications between DDSM 15 and suppliers in the USA span a distance of up to 5,000 miles, so why is there such a major problem with a distance of only 100 miles?
I am sure that the Minister will reconsider the matter. When he does so, he will decide, like his predecessors, that there is no moral reason for the transfer. Is it not immoral to take jobs away from an area that has over 10 per cent. unemployment and give them to another area that has 6 per cent. unemployment? Further, to say that that is being done on the grounds of efficiency, with no care for the effects that it will have on the community, is also immoral.
No financial saving will be made because, as the report says, five extra staff will be employed. Extra costs will be incurred for accommodation. There is no defence reason for the transfer because it will weaken, for up to two years, the RAF's ability to respond.
The Minister should come to the same conclusion as the two previous Ministers. They were wise men — it is a seasonable time of the year—and if the Minister takes this decision he could become the third wise man. If he does not, my constituents will think that he is one of the brass monkeys.
I hope that the Minister will accept that the decision that has been made is wrong and that he will let the people of DDSM 15 get on with doing the job for which they received commendations from the Government during the Falklands war.
§ Sir Hector Monro (Dumfries)
I am glad that the hon. Member for Carlisle (Mr. Martlew) obtained this debate, and I am grateful for the opportunity to say something on behalf of myself and my hon. Friend the Member for Penrith and The Border (Mr. Maclean), in whose constituency the RAF unit lies.
I have grave concern about the employees affected by this decision, grave concern about the efficiency of supplies to the RAF of United States' aircraft spares 1069 subsequent to this operation, and grave concern that the Peat Marwick McLintock report does not justify the upheaval. I doubt whether savings will be made if the transfer takes place, and the hon. Member for Carlisle highlighted some of the problems.
I read the executive summary of the consultants' report, and paragraph 46 says that there will be no cost savings. Volume 1, paragraph 9 of the more detailed report says that the move cannot he justified on cost saving factors. Such cost saving factors seem to be the basis of my hon. Friend's decision. Paragraph 45 casts grave aspersions on accommodation at Harrogate.
The hon. Member for Carlisle highlighted the statement in the report that in the 1990s it is likely that the Government will have to purchase or construct accommodation in the Harrogate area. There are doubts about the availability of married quarters, and the report comments on the present layout of the site at Harrogate.
The move from Carlisle, where there is space and accommodation, does not seem to be a step towards practical efficiency. It needs much imagination to believe that a possible saving of £250,000 per year can be made in this new, expensive purchase or building programme.
My hon. Friend is hard pushed to justify the move, and particularly to bring into consideration the distance of 100 miles between Carlisle and Harrogate. Everybody knows that it is only about two hours away by road. Surely with the communications that the hon. Member for Carlisle mentioned, a distance of 100 miles should not come into the argument. It is much more important that we look at what will happen to the people involved.
My constituency of Dumfries is just north of the border and of the RAF maintenance unit. We do not have an RAF station or an Army depot. The Ministry of Defence is entirely absent except for an outstation and the CAD Longtown station at Eastriggs. However, the loss of any Ministry of Defence jobs is significant and serious. We have suffered two blows in recent months—the DDSM 15 decision that we are discussing and the Royal Ordnance decision to close the factory at Powfoot in the middle of my constituency. It is a double blow to lose 200 jobs in an area of high unemployment when we are looking to the Ministry of Defence to help provide jobs. It is unacceptable that that should happen.
My right hon. Friends the Members for Henley (Mr. Heseltine) and for Ayr (Mr. Younger), as Secretaries of State for Defence, have both highlighted the importance of keeping jobs in the north, which is an area of high unemployment, but now we are to lose jobs to an area of much lower unemployment which is further south.
My hon. Friend the Minister has been good enough to see my hon. Friend the Member for Penrith and The Border, the hon. Member for Carlisle and me. We have read the Peat Marwick McLintock report, and the case for going to Harrogate is not cast-iron. Too many questions remain unanswered and the report contains too many uncosted suggestions, especially about accommodation. I forecast that there will not be a manpower saving but that we shall have a redistribution of the labour force from Carlisle to Harrogate and nothing towards the efficiency of the unit. As we know, the arrival of the AWACS aircraft in a year or two will add enormously to the amount of spares that will need to be carried at Carlisle. I note from my hon. Friend's letter to Members of Parliament, dated 19 November, that that will not begin until 1989, so my hon. Friend has time to reconsider.
1070 In total 70 jobs are involved. My hon. Friend hopes that 20 will be transferred; 24 people are to be made redundant and 26 jobs have a question mark against them. Are they to be lost through natural wastage? What is to happen to the 26 that are not accounted for? Surely, if the move is to take place — I press upon my hon. Friend that it should not happen and that he should change his decision— can he not ensure that the 50 people who might lose their jobs at the maintenance unit at Carlisle are guaranteed jobs in other parts of that large RAF station or at the CAD Longtown station nearby or elsewhere in Ministry of Defence employment in the area?
It is unacceptable to me that many of my constituents, those of my hon. Friend the Member for Penrith and The Border and those of the hon. Member for Carlisle should lose their jobs under these circumstances. I ask my hon. Friend to look again because there will be a knock-on effect. What will happen the the MT section or to the signal section. It is really a case of people mattering. The people who will lose their jobs really do matter. I do not think that the Ministry of Defence has considered the constituents of the three Members of Parliament who are present tonight and who are concerned about the future. I ask my hon. Friend to think again and reverse his decision.
§ The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury)
I am grateful to the hon. Member for Carlisle (Mr. Martlew) for raising this matter this evening, because the debate gives me the opportunity to explain to the House how my Department is dealing with a matter which is understandably of great concern to the hon. Member for Carlisle and to my hon. Friends the Members for Dumfries (Sir H. Monro) and for Penrith and The Border (Mr. Maclean). They have all taken a close interest in this matter and I understand why, because it is of concern to their constituents. The issue is one on which we have to find a proper balance between improving value for money in the use of defence resources and responding to the legitimate concerns of our staff.
The theme of value for money is central to the Government's approach to the defence budget. We apply it in defence procurement, as we set out in 1983 in an open Government document, through a more commercial approach, greater use of competition at all levels and a broadening of our base of suppliers. We apply it in support, supply and maintenance services by the use of contracting out, privatisation and partnership with private enterprise. We apply it, too, in the management of the Department. The key to success is changing attitudes and developing our management practices. I am sure that the hon. Member for Carlisle will understand that from his own management experience.
I acknowledge gladly the quality of the staff throughout the Department and it is the responsibility of Ministers and senior management to give the staff the best opportunity to get their jobs done as effectively as possible.
There are three particular points which I should make clear from the outset. The first is that the proposal to transfer work from Carlisle to Harrogate does not in any way cast doubt on the motivation or performance of the present staff at Carlisle. It arises simply for reasons of 1071 efficiency and value for money which are outside their control because they relate to the whole organisation of which they at Carlisle are a part.
Secondly, the proposal that we are debating tonight relates not to the depot—No. 14 maintenance unit—at RAF Carlisle, but only to the group of supply management staff in the Royal Air Force department who are currently based at the station.
Thirdly, I have not yet taken any final decision on the proposal, because, in accordance with our normal practice, we are consulting the trade union representatives of the staff concerned about it. I can assure hon. Members that we take those consultations very seriously, and their outcome is by no means a foregone conclusion. The trade union side has asked that the period of consultation be extended so that it can consider its position at a meeting to be held at Carlisle on 14 January. Though we have been happy to accede to that request, it means that I shall not be in a position to reach a final conclusion before the end of January at the earliest.
Let me briefly explain in the time that is available some of the background to the issue that we are debating. The hon. Gentleman has already referred to the function of DDSM 15 and the fact that it is based at Carlisle, whereas the rest of the supply management organisation is based at Harrogate.
§ Mr. Martlew
Is it not the fact that it is being left as it is and is not being brought into the Harrogate unit?
§ Mr. Sainsbury
I cannot reply at this moment about the unit to which the hon. Gentleman has referred. One complication is that we have 11 deputy directorates with more numbers attached to them.
The basic point about the directorate being at Carlisle was originally that they should be located alongside the items for which they were responsible. The RAF supply organisation deals with about 1.7 million separate items of equipment, including complete ranges of items— for example, aircraft spares. The staff at Carlisle are responsible for about 200,000 of those items, most of which are stored at the maintenance unit at Carlisle. However, many other commodities at Carlisle are dealt with by the staff at Harrogate.
The staff group at Carlisle was set up in the 1960s to source equipment which was to be stored at that unit. At that time, RAF provisioning activity relied heavily on local depot records, so it made sense to put the provisioning staff next to the depot where the stores were kept. In recent years, depot records have become less important as the emphasis has switched to central computer control, and the need to have provisioning staff alongside the depot has largely disappeared. Indeed, the provisioning staff who were based at another depot were transferred to Harrogate some years ago.
As the hon. Gentleman has said, the transfer is not a new idea. It has been considered on several occasions in the past. What is new in the present situation is that the proposed transfer needs to be seen as part of a much wider 1072 reorganisation of RAF supply management, which is being undertaken following a six-month study by a firm of consultants. The object of that reorganisation is to seek better value for money from the RAF provisioning system as a whole. The size of the benefits that we can achieve through this process will be apparent when I say that we estimate that each improvement of 1 per cent. in the efficiency of the purchasing process will save us at least £10 million per annum.
Clearly, if savings of this magnitude are available, we must do all we can to achieve them. The clear advice we have from the consultants— and it is advice which I would endorse from my own commercial experience—is that the move of DDSM 15 (RAF) to Harrogate, and its fuller integration into the supply management organisation as a whole, has to be seen as an integral part of that process.
There has been some misunderstanding about the nature of the consultants' recommendations. Both my hon. Friend the Member for Dumfries and the hon. Member for Carlisle referred to that point. In the course of their study, the consultants had neither the time nor the facilities to produce fully validated costings of every aspect of their proposals for the entire RAF supply management organisation. On the information which was available to them, they believed that the proposed transfer was justifiable on wider management rather than direct cost grounds. We have since been able to look at the proposal in more detail and, as I have explained to my hon. Friend the Member for Dumfries and to the hon. Member for Carlisle, we firmly believe that it will provide significant cost savings as well.
From our developing understanding of the changes required in the RAF supply management organisation, we now know that integration of the DDSM 15 (RAF) staff into the rest of the organisation at Harrogate would allow us to save some 20 service and civilian posts in the organisation as a whole. We therefore estimate that the total annual saving in staff costs will be about £250,000. Obviously, the costs of the move cannot be fully assessed until we know the intentions of the staff at Carlisle, but we have estimated the total cost of the move to be, on pessimistic assumptions, about £335,000—not the larger cost assumed by the consultants, who assumed that there would be far more redundancies.
It would therefore seem that, leaving aside the important contribution it would make to the wider management benefits that I have mentioned, the move is worth while in itself. As to the timing of the move, this is expected to take place during 1989. The actual timetable will be decided over the next few months when we have a clearer idea of the numbers who are likely to move with the work.
Although, as I have said, the financial and organisational benefits of the proposed move are substantial, we are following our usual procedures for consultation with the trade unions, and their views will, as always, be given the most careful consideration. If, following the period of consultations with the trade unions, I decide that the move should proceed, we shall be taking steps to discover the preferences of individual members of staff. Of the 62 civilian staff affected by the transfer, eight are in the higher executive officer and executive officer grades, and a mobility obligation forms part of their terms of service.
1073 We would also try, so far as possible, to meet the preferences of the 54 staff who do not have any mobility obligation. We understand informally that some members of this group have already indicated an interest in a possible transfer. That is not entirely surprising, because a much wider range of career opportunities is open to these staff at Harrogate than at Carlisle. For those who are unable or unwilling to transfer, we shall be putting into effect the normal arrangements to ensure that they have the opportunity to apply for any Civil Service posts that become vacant in the Carlisle area and at Longtown. We shall also be controlling recruitment to the relevant grades at both Carlisle and Harrogate.
If, in the event, redundancies were to become necessary, we should certainly look for volunteers in the first instance. We have made it clear that these arrangements would extend to all the staff in the relevant grades at RAF Carlisle, not just to those who happen to be working in DDSM 15 (RAF) at the moment, so as to ensure that the 1074 effects of the change would be absorbed in as large a staff group as possible. I hope and believe that, through this range of measures, we would keep the number of compulsory redundancies to the absolute minimum.
In sum, we see very significant advantages in the proposed transfer. We also recognise the legitimate interests of those of our staff who are affected by this proposal, but, in the circumstances I have described, we do not feel that those interests outweigh the benefits of proceeding with the move. Nevertheless, it would be quite wrong for me to pre-empt the outcome of the discussions that we are due to have with the trade unions, and I shall not be able to make a final decision on those matters until those discussions are complete. In reaching my decision, I am naturally quite willing to consider the points that have been raised this evening and any further representations that hon. Members may wish to make.
§ Question put and agreed to.
§ Adjourned accordingly at seven minutes to Two o'clock.