§ Motion made, and Question proposed, That this House do now adjourn.—[Margaret Moran.]5.59 pm
§ Mr. Geoffrey Clifton-Brown (Cotswold) (Con)
May I start by thanking you, Mr. Deputy Speaker, for the opportunity to raise the future of the Fire Service College in Moreton-in-Marsh? I also welcome the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Corby (Phil Hope), and hope that I can thank him in advance for what he is about to say.
A Treasury minute of March 1992 states:Section 4(1) of the Government Trading Funds Act 1973 provides that a trading fund established under that Act shall be under the control and management of the responsible Minister.According to the Treasury minute, the Minister is responsible to Parliament for the running of the college, and I hope that he will make good use of his responsibilities.
The Fire Service College is the world's premier fire training establishment. It is also a very important employer in my constituency, employing some 262 people, most of whom come from the small Cotswold market town of Moreton-in-Marsh, with which it maintains cordial and close relations. It is from that standpoint I have secured this evening's Adjournment debate.
The Fire Service College covers some 500 acres,or 200 hectares. Its facilities include one third of a mile of two-lane motorway, a mock-up oil rig, a boat and an office block, all of which may be set on fire in exercises. It has some of the most modern equipment in the world, including modern lire hoses and fire tenders. It can stage multi-agency mock exercises in which the ambulance, police and fire services are all involved. It has mock aircraft and helicopters, accommodation blocks and a leisure centre. It is potentially a world-beating institution, subject to one or two caveats that I shall raise this evening.
The Fire and Rescue Services Bill allows the Minister to define the college's position asa national Centre of Excellence for the UK Fire and Rescue Service.However, I believe that the future role of the Fire Service College is still far too vague. It makes a loss, and it is no nearer the goal of partnership with the private sector, as identified in the 1999 report "Prior Options Review of the Fire Service College". There is obviously a clear need for a central fire training facility, and the Fire Service College is uniquely placed to meet it. However, it is imperative that the college resolves its short-term financial and organisational difficulties in order to secure a long-term future in the private sector. We must ensure that the college has an increasingly secure long-term future, which will benefit the public, the emergency services, fire officers who train there and, above all, my constituents, by providing increased numbers of jobs.
I shall make five points about the future of the college. First, a chief executive must be appointed speedily. Secondly, the college must have a clear and defined role.
1197 Thirdly, it should be allowed to become a viable commercial entity, to compete in the global marketplace and to raise its own funds for reinvestment in new facilities. Fourthly, the current financial constraints make consistent profitability and meeting the college's financial targets almost impossible. Fifthly, the college has a unique opportunity to expand and become a global leader in the field of civil emergency planning, if the Government give it the freedom to do so.
A key part of the long-term future is the speedy appointment of a new chief executive with a clear remit and proper scope for action. I understand that interviews for that position took place on Tuesday. Will the Minister inform the House when an appointment is likely to be made? Is he satisfied that the package that was advertised will attract a candidate of sufficient calibre, who has dynamism and a proven track record of successfully running businesses of that size and complexity?
Secondly, the Government must identify a clear and well-defined role for the college in the years to come, and must allow the college to compete in the global environment. The Bain report rightly commented:There needs to be clarity of purpose and a culture which fosters organic change … The College must also become the focus for developing the new thinking required by the service … The Fire Service College and Fire Inspectorate need re form with new remits which include the promotion of best practice and the delivery of a wider vision of an effective service.The Government must allow the college to become a genuine global centre of excellence in multi-agency training by ending the present confusion over the college's role. They will fail the college and the dedicated people who work there if they fail to provide strategic direction. As the internal auditor stated in the 2002–03 annual report,There is an urgent need for the strategic direction and associated funding arrangements of the Fire Service College to be clarified".
The conclusions of the 1999 report into the college were supported by the then Home Secretary. The prior options review found that the college had been performing very poorly financially over a sustained period. The review concluded, based on the problems that it identified, thata public sector management team acting alone would not be able to secure quick and effective changes needed at the College to ensure long term viability. We therefore believe that the right route lies in a partnership with the private sector; and we think that joining up the training requirements of the UK fire service with the MOD FSCTE"—at RAF Manston—is preferable to going it alone.That was point 1.16. The review argued thata private sector partner could strengthen and add to the expertise and skills at the College; offer the possibility of new funds for capital investment; act as catalyst to achieve culture change; and enhance the possibility of successful expansion into new markets to increase utilisationof the excellent on-site facilities that I described.
In the years following the publication of the review, and thanks to the hard work and dedication of the then chief executive Terry Glossop and his successor Robin Currie, the financial and overall performance of the college improved substantially. A deficit on ordinary activities before exceptional items of £3,322,000 in 1198 1997–98 was turned into a break-even point in 1999–2000, a surplus of just over £1 million in 2000–01, and a bigger surplus of £2,437,000 in 2001–02. The college also succeeded in winning a large number of international contracts and becoming increasingly attractive to the private sector.
I fear that in recent years the momentum gained in those years has been lost. That is a serious point for the Minister to note. In 2002–03, the college reported an operating deficit of £883,000 and a total deficit of more than £1 million, compared with a surplus of more than £1 million in the previous year. Several courses were cancelled in the last financial year. Sadly, the financial situation has deteriorated further, and this year the accounts are likely to show an even worse result.
The college must make correct decisions and eliminate waste. It recently commissioned an outside organisation to introduce a work regrading experiment, which was abandoned after it led to almost 90 grievances from the staff being received. It is imperative that that drift does not continue.
The college suffers from underinvestment. Page 30 of its business plan states:This has to be addressed as a matter of high priority if the FSC is to retain its existing business and deliver an effective modernisation programme. The under investment totalled some £9.8 million in 1996, and is now in the order of £12 million. In addition, costs associated with meeting modernisation and changed legislative requirements will take the total to an estimated £25 million.After all, if the college is to provide world-renowned facilities, it must have world-renowned equipment on which to train firefighters.
I doubt whether the college will achieve its financial targets. It is required to achieve a minimum return, averaged over the period as a whole, of 6.5 per cent. a year in the form of an operating surplus expressed as a percentage of average net assets employed at current values. Given that it already has a public sector loan of some £16 million on which it is expected to pay a return of 7 per cent. to 9 per cent., I do not know how it is expected to make a profit. The valuation as at 31 March 2003 shows that the net book value of tangible fixed assets was revalued to some £30 million—an upwards valuation from £14 million as at 1 April 2000. Speaking as a chartered surveyor, I suspect that valuation, and I intend to draw it to the attention of Sir John Bourn at the National Audit Office before he draws up the next accounts. If the valuation is too high, how can the college be expected to make a 6.5 per cent. return on assets?
If the college is given commercial freedom, it can develop a proper business plan and consider its income stream before deciding how much to invest in facilities and what those facilities should be. Clearly, the Government must choose to go down one of those routes—privatisation or keeping the college in the public sector but providing it with the investment that it needs.
KPMG faced that stark choice when it suggested that the best option for the Fire Service College was either complete privatisation or management privatisation. 1199 That led the then Minister, the hon. Member for North Warwickshire (Mr. O'Brien), to aim to privatise the college by the end of the year. Sadly, those plans have subsequently been changed.
If the Government decide to avoid commercialism for the Fire Service College, they will find it extremely difficult to make a profit. In addition to the 6.5 per cent. that the college is required to make on assets, the Treasury minute that I have already quoted decrees thatthe prices to be charged to UK fire authorities and also to Exchequer customers, must not exceed the full cost of courses provided for them. For the purpose of calculating full cost for UK fire authorities and Exchequer customers the required return on capital should be 6%.I have already mentioned the public loan, which is currently £16 million. Under pressure from me in 1997, the previous Conservative Government wrote off £13 million.
It is essential that the new chief executive has a properly defined role and remit. I hope that the Minister will tell us something about that tonight. He must agree a new strategic direction for the future of the college with the Government within a few months of his appointment. There must not be a repeat of previous occasions, when previous chief executives have been blocked when trying to gain new business abroad in countries such as Malaysia, Qatar and Saudi Arabia. Some of those countries are excellent places for new business.
The Minister should consider several issues for the future of the college. Previous chief executives have been in negotiation with Cotswold district council to use some of the college's brownfield land on the western edge of the site for new housing. That could generate mixed tenure and social housing, which is needed in the area and, above all, generate up to £26 million. Will the Minister give an assurance that, if the money were generated by a sale or some form of partnership, all of it would be used to write off the £16 million public loan, and the balance used to reinvest in the site rather than being taken back into Treasury coffers?
The Minister might also like to reflect on the impact of the Government's airfield support services project, its part privatisation and its effect on the college. That is a big privatisation of various services in the Ministry of Defence and I have already said that if its firefighting training were concentrated at the college, that could hugely benefit the institution. One of the bidders for the ASSP is Serco, which has a large training college in Teesside. If the bid were successful, there might be some synergy in moving some of its aviation training from Teesside to Moreton-in-Marsh and beefing up the facilities there.
The global environment created by 11 September and the threat of global terrorism has made the need for a first-class training centre to deal with all civil emergencies through a multi-agency approach even more urgent. The Fire Service College has the potential to be the centre of best practice. Indeed, the Minister should consider that the college, which our forefathers set up as a world centre of excellence to train fire officers in 1968, could be transformed into a world centre for civil emergencies planning.
1200 Firemen are unlike members of the armed forces, who may or may not experience armed combat in their career. From the moment they are trained and attend their first incident, firemen put their lives at risk. They deserve the best training we can give them. That means that the Government's previous blurred vision must now be cleared. The Government must give the college a proper vision for the future.
A former London fire officer, Gerry Clarkson, described the Fire Service College asone of the most critical parts of the British Fire Service.The people of Moreton-in-Marsh, those who work in the fire industry, those who work in the Fire Service College and the people who are trained there look to the Minister tonight to give us a clear vision for the future.
§ The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope)
I congratulate the hon. Member for Cotswold (Mr. Clifton-Brown) on securing this important debate on the future of the Fire Service College at Moreton-in-Marsh. I want to begin by doing exactly w hat he has just asked me to do, which is to reaffirm our support for the college and to acknowledge the huge importance of its role in the modernisation of fire and rescue service. The Deputy Prime Minister has visited it, as have I and other Ministers on a number of occasions.
The hon. Gentleman's brief description of the fire ground did it little justice. It is a unique facility not just in this country but across the globe. He was right to say that our firefighters deserve the very best, and at the Fire Service College, that is exactly what they have. I appreciate that with an annual turnover of £20 million and a permanent staff of more than 200—the hon. Gentleman mentioned a figure of 262—the college is a major local employer and supporter of the local economy. Many of the staff and their families live in the immediate area, and I am pleased to say that the college has a good relationship with the Moreton-in-Marsh community. It opens itself up for many annual events and gives support to local charities. Membership of the modern, well equipped sports centre is also available to the local community. The college also has other more formal roles within the community. For example, it is the designated evacuation centre for Gloucestershire county council. The House and the fire service, along with the Moreton community, are bound to take an interest in what goes on at the college, and in its future.
In May 2002, my hon. Friend the Member for Southampton, Test (Dr. Whitehead) announced the creation of a task group of fire and rescue service stakeholders to look into the future of the Fire Service College. As I announced to the House on 30 June last year, the task group concluded that there was a need for a central training facility for the fire and rescue service, to take forward work on vocational development through the integrated personal development system, on the civil contingency response arising from the events of 11 September, and on the modernisation agenda opened up by the 13ain report. The task group also recommended that a national work force development strategy be drawn up to define the role of the college in relation to other training providers, and that there should be a long-tern plan for improving the college's infrastructure and services.
1201 In accepting the recommendations of the Fire Service College task group, I also accepted the need to address the shortcomings set out in the task group's report, some of which the hon. Gentleman has mentioned tonight. As a trading fund since April 1992, the college has struggled to meet its financial targets. It has not been able to generate the income necessary to invest in the site, or to develop its training facilities to meet the needs of today's fire and rescue service. Nor has it been able to modernise its student accommodation to meet the standard now expected by stakeholders.
So where do we go from here? It is important that the college should be fit for purpose and able to deliver the key role that it has in modernisation of the fire and rescue service, as set out in the White Paper. This sets out a number of functions for the college as a centre of excellence. It should be a national centre for incident command training, based on a fire ground that is unique in the world in its size and scope. It should provide national specialist training in urban search and rescue and other new dimension techniques, working closely with the other emergency services. It should also provide drive and leadership for reform of the fire and rescue service through links with other services and fire industry institutions, and training and development for the most senior and specialist roles. It should lead the implementation of the integrated personal development system, and spearhead e-learning in partnership with the Scottish Fire Services College.
The hon. Gentleman mentioned investment. In my statement of 30 June, I confirmed that we would make £5 million available to the college for the upgrades necessary to meet health and safety and other legislative requirements, and to invest in its training facilities and student accommodation. I am pleased to say that that work is well under way, with training rigs on the fire ground being upgraded and a new accommodation block under construction. A further £2.5 million in new dimension funding has paid for a brand new urban search and rescue training facility. This is now in use, enabling the college to provide training to fire and rescue services in how to deal with collapsed buildings, for example. Those skills of the UK fire service search and rescue terms were recently used at the tragic factory explosion in Glasgow to very good effect.
We are also making good progress in bringing the college fire ground and facilities up to standard, but years of limited investment can only be made good over the longer term. It is therefore important that the college has a coherent and realistic corporate strategy in place that shows how it will benefit from our investment and how it will generate the income for future investment, which I know that the hon. Gentleman is keen to see.
When I visited the college earlier this month, I met the acting chief executive and college directors, and we discussed both their business plan for the current year and, importantly, the development of a corporate strategy for the next five years. The hon. Gentleman is right that that strategy will need to explore the options for partnerships with both the public and private sectors. He mentioned one specific project—the airfield support services project. He will know that the fire service college is a service provider for the consortiums bidding for firefighter training under the airfield support services project. Certainly, the college welcomes the possibility of joint working with the Ministry of 1202 Defence. It has made provision in its business plan to do so, but given that negotiations must continue, the college's planning remains flexible, depending on the outcomes of those discussions.
The hon. Gentleman also mentioned the importance of the right management team. He is right about that. I share his view that having the right management team in place is essential to realise this clear vision for the college. The appointment of a new chief executive is a key component in drawing up and delivering the college's future strategy. The selection process for a new chief executive is being run in accordance with Civil Service Commission recruitment rules to ensure fair and open competition. The competition has attracted strong interest and a selection panel chaired by a commissioner is interviewing a strong shortlist of candidates. When that process of selection has been concluded, I will have an early meeting with the new chief executive and college senior managers to discuss the corporate strategy as it takes shape.
§ Mr. Clifton-Brown
This is a critical point. Can the Minister give us any idea, as there has been a long period of uncertainty, how long that process will take? That would be helpful to people working at the college.
§ Phil Hope
I am mindful of the point that the hon. Gentleman raises. Of course, the proper processes must be followed, and it is not for Ministers to intervene in that. It is right that we need to get on with this job, because of the uncertainty that there has been, and the sooner that we get a chief executive in place in the college, the better for the college and the whole senior management team. I fully understand that concern, and I will take back those comments.
The hon. Gentleman mentioned financial and performance targets. It is important for the college to meet its targets and to have a sound financial footing so that it can meet its obligations as a trading fund, as set in the Treasury Minute that he mentioned, laid before the House on 15 January. To remind the House, those obligations were to meet outgoings from its funded operations, and to achieve a surplus on ordinary activities of 4 per cent., expressed as a percentage of average capital employed. The college has not met those targets in the past two years, but he and I would recognise that in both years trading was significantly disrupted by the fire dispute, resulting in the cancellation of 22 weeks of courses. That is one of the realities.
In my recent discussions with college senior managers, we have been in full agreement that a return to at least break-even in 2004—05 is a priority, and that is reflected in the college's budget plan for the current year. The college has also made substantial progress in modernising its products and services, with the development of a more flexible, modular form of training within a new course prospectus that is fully compliant with the integrated personal development system. We are continuing to work together to strengthen the college's trading performance in this and future years.
I want to emphasise training. The take-up of new training by fire and rescue services is positive, and the coming on-stream of new urban search and rescue 1203 training facilities in particular has prompted strong interest. The college does not have a monopoly of training for the fire and rescue service, however, and it operates in a highly competitive market. As I said earlier, the task group recommended the drawing up of a national work force development strategy to define the college's role in relation to others. The strategy will build on areas in which the college is a strong performer, where it has an established reputation, and where training and development can most efficiently and effectively be delivered at national level.
However, there will remain a need for some training and development to be delivered at regional and local levels. It is likely that the college will have a part to play in supporting the fire and rescue authorities and the regional management boards in those local and regional responsibilities. We look forward to the possibility of its offering services such as outreach training, development programmes and quality assurance.
I believe that the college is best equipped to provide specialist and operational training, taking advantage of the unique fire ground facilities that have already been mentioned. We have invested in updating those facilities, and in the provision of new capabilities. Further development is planned, and we are exploring ways in which the site's potential for joint training with other emergency services might be realised. The hon. Gentleman mentioned that, and we are keen to pursue it.
§ Mr. Clifton-Brown
I assure the Minister that this will be my last intervention, as time is getting on.
Part of the college's way of meeting the business plan—and this is where it was so successful under its former chief executive, Terry Glossop—was going out into the world and selling itself. Could the Minister tell us something about this aspect of the new business plan for the next five years? How does he envisage foreign businesses being brought into the college?
§ Phil Hope
I think the hon. Gentleman has been reading my notes! I was about to deal with the market strategy for—literally—the wider world.
I think it fair to say that the college has an established reputation in the fire service community, not just here but abroad. I was keen for it to adopt a new marketing strategy to build on that, which it has now done. The Fire and Rescue Services Bill, which has been dealt with in the House of Commons but has not completed its passage, will give the college the additional flexibility that it needs to consolidate or—this is the point raised by the hon. Gentleman—expand 1204 its presence in wider markets both in the United Kingdom and overseas where it has the products, capability and capacity to do so. I should stress that meeting the training and development needs of the UK fire and rescue service will remain the college's primary task, but the hon. Gentleman is right to draw attention to the opportunity offered by business abroad.
The college also has a key role in the support framework for the IPDS, which we set out in chapter 6 of the national framework document. The ODPM's enhanced support for the IPDS has resulted in a strengthened central team and three regional teams working from the college, giving advice and support to fire and rescue services. The college is currently working on a proposal to establish a major e-learning capability that will support the rolling out of the IPDS, especially in the retained service.
The White Paper sets out further development for the college as a nucleus of a centre of excellence for the fire and rescue service, bringing together service and fire industry institutions to provide a focus of expertise, research and innovation. I recently approved in principle the relocation of the Fire Protection Association and the Institution of Fire Engineers to Moreton, and subject to negotiation of terms both are expecting to move in September.
The task group's report spoke of the need to strengthen arrangements for those using the college to give feedback. The practitioners' forum will be able to play that role, enabling key stakeholders to comment on its performance.
Training and development are at the heart of the Government's modernisation agenda for the fire and rescue service. The college has a key role to play. We have invested in it to improve its facilities, and to put it on a sound footing for the future. We will continue to work with it to strengthen its trading performance, and to deliver the modernisation agenda.
§ Mr. Clifton-Brown
On a point of order, Mr. Deputy Speaker. I thank you for allowing me to speak, and I thank the Minister for what he has said and for the positive and constructive manner in which he has said it. I think—subject to reading the small print inHansard tomorrow—that my constituents will be greatly reassured.
§ Mr. Deputy Speaker
I am not sure that that was a point of order, but I am sure that the House will be grateful for what the hon. Gentleman has said.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Six o'clock.