§ Hugh Bayley (City of York) (Lab)I begin by thanking Mr. Speaker for responding so quickly to my request for a debate on the closure of the York pensions centre with the loss of 313 jobs. I have invited the hon. Member for Ryedale (Mr. Greenway) to join me in this debate, which will show that there is all-party support in and around York for all possible action to be taken to avoid compulsory redundancies for the staff concerned.
I pay tribute to the staff of the York pensions centre and their manager, Ron Stead, who have done a first-class job to introduce the pension credit in East Yorkshire and North Yorkshire. In City of York, there are now 6,230 pensioner households receiving the pension credit, on average getting £34.90 a week, which means that an extra £217,000 a week, or £11.3 million a year, is coming to our pensioners. Can the Minister assure the hon. Member for Ryedale, my hon. Friend the Member for Selby (Mr. Grogarn)—who is also here to support me and his constituents, who are affected by the decision—and me that the quality of the Pension Service for pensioners living in York will not decline as a result of the closure decision?
The decision is a serious blow to the York economy. Although unemployment in York has fallen by almost three quarters—from some 6,400 10 years ago to 1,700 today—it was not at all helpful for my hon. Friend the Minister for Pensions to say:
York's economy is fairly buoyant and it is therefore more likely that some of those affected will be able to find alternative work.York's economy is performing well, but it is going through a difficult patch at the moment. Some 316 jobs at Terry's of York, the chocolate factory, will be lost when it closes next year, and 150 nigh-tech computer jobs at Norwich Union are to be made redundant as a result of the company's decision to put some of that work out to contractors. I shall do all I can to help Pension Service staff from York to find alternative work, but the Government have created the problem, and I hope that they will assure me that they will do all they can to help those staff to find alternative work and that it will be possible to avoid compulsory redundancies.When the Lyons review was considering relocating jobs from the south of England to the north, I submitted evidence arguing York's case as a suitable location for job relocations. When the review was published, York emerged as one of the favoured locations. Before the announcement of the Department for Work and Pensions closure decision on the York pensions centre, I wrote to the Department for Environment, Food and Rural Affairs and to the Ministry of Defence to ask them whether they were considering moving jobs, under the Lyons review, from the south to the city of York. I chose those two Departments because they already have a substantial civil service presence in the city, and I received helpful responses from Ministers in both Departments.
This is therefore a time for joined-up government. The DWP must co-ordinate its decision, which will lead to job losses in York, with decisions being taken by other Departments to increase job opportunities in 412WH York and to try to achieve a seamless transfer so that people are not left jobless but can transfer from their current jobs to new civil service jobs in the future. I was grateful to the Secretary of State for Work and Pensions for contacting me on the day on which he made his announcement, and when I spoke to him, I asked him to get in touch with those Departments, and any others that he knew were considering moving jobs to York, to see whether such joined-up government, and coordination of Departments, could take place. I would be grateful if the Minister told us what progress has been made on that front.
I know that the Department for Work and Pensions has met the York Inward Investment Board, now known as york-england.com. I would like an assurance from the Minister that he will continue to co-operate with the local authority and the York Inward Investment Board until an alternative user can be found for the Pension Service building, Triune court.
Last week I visited the centre, which is just over the border of my constituency in that of the hon. Member for Ryedale, and met managers, members of staff and the trade union representative for the pension centre, Julie Kemp. I was pleased to see that the management and union are working together to deal with the problems that they face, but there can be no hiding the anger that staff feel at the decision. For instance, one employee had given up a higher paid job to transfer to the civil service because he believed that a lower salary was compensated for by greater job security. I met a woman who had just had a baby and is losing her job at the pension centre because of the Government's decision. Her husband is also losing his job at Terry's in York.
I was concerned to be told that many staff believe that the Government planned from the outset an early closure of the pension centre. They think that the Government opened it to deal with the peak work load when pension credit was introduced. Having worked as a junior Minister in the Department, I do not believe that early closure was planned from the start. I would be astonished if the Government had taken on a 15-year lease through their property manager, Trillium, and spent millions of pounds on equipping and commissioning the building, as well as recruiting and training staff, for a short-term purpose. However, that poses a difficult question: how did the Department get its projection of the number of staff needed for the Pension Service so badly wrong? What will the Government do to avoid similar mistakes in the future? It is important to avoid such mistakes, because they are costly, especially for the staff concerned, who think they have job security only to find that they do not and who may get in great difficulty with their mortgages or other financial commitments. It is also costly for the taxpayer if the Government invest in a new building, staffing and training, only to write off those costs after three years.
Will the Minister answer some questions of which I have given him notice? How long is Trillium's lease on the premises, Triune court? How long is the Department for Work and Pensions under an obligation to pay Trillium for using the premises? What will the premises cost his Department if left vacant from April next year, when the pension centre is due to close? What was the cost to his Department of commissioning the building—putting the walls up in the right places, painting and 413WH furnishing it, installing computers and cabling the building? How much has been spent on recruiting staff for the York pension centre?
The way for the Government to recoup part of those big costs is to retain the staff within the civil service when other Departments move to York and to retain the building for Government use so that the cost of commissioning it is not written off. Will the Minister closely examine other Departments' decisions to move staff to York as a result of the Lyons review, and co-ordinate the time scale for his Department's regrettable closure decision with other Departments' decisions to move jobs to York? Then there would be a prospect that some—I hope many and possibly all—staff at the pension centre could transfer to other civil service jobs in the area.
§ Mr. John Greenway (Ryedale) (Con)I begin by congratulating the hon. Member for City of York (Hugh Bayley) on securing the debate. He referred to the speed with which Mr. Speaker granted the debate; it happened before I could scratch my head and work out in my diary when I could apply for a slot for this debate—as the hon. Gentleman said, the facility is in my constituency in the York suburbs.
York has four Members of Parliament, and three of us are here today. Announcements on redundancies of such magnitude transcend party politics, certainly locally, and I want to impress on the Minister the fact that we all want to do our best to represent the interests of the community that we collectively serve. That means, first, finding an alternative use for the work and pensions office; secondly, securing alternative employment if the alternative use does not allow everyone to keep their job; and, thirdly, in any event to cushion the blow to the local economy, which is suffering at the moment from other job losses at Norwich Union, the Terry's factory and elsewhere.
I, too, visited the facility, and I have some experience of private sector call centres and IT processing centres. I am bound to tell the Minister that what has been created in York is the equal of anything I have seen in the public or private sector. I have made that view clear, because the staff deserve congratulations on what they have been able to achieve in a relatively short period.
I am told that the Department for Work and Pensions is preparing the necessary data to market the site and staff to other Departments. Will the Minister confirm today exactly what his Department is doing and over what time scale the closure will take place? Yorkshire Forward is pursuing private sector means, and I believe that the facility has attractions for both the private sector and other Departments.
I particularly want to impress it on the Minister that my first preference is to find, as far as possible, an alternative use for the facility—the staff and equipment as well as the building. The last thing I want is the premises to be vacated and everything to be ripped out, only to find two or three years down the track that there is an alternative use and that we must start all over again. That would be a wicked waste of public funds for the reasons made clear by the hon. Member for City of York.
414WH Yesterday, the Chancellor announced the relocation of some 20,000 civil service jobs from the south-east to the regions with the idea that some would go to Yorkshire. Yorkshire was specifically mentioned in the context of the Department for Environment, Food and Rural Affairs. It is a shame that the way that our business has been organised means that the Minister responsible, who is from that Department and who was here a few minutes ago, has vanished. We would have liked to ask him about those matters, for reasons that will become obvious in a moment.
I want to stress that there is some interest and, I dare say, optimism that that relocation of jobs might be good news for York, but we must be clear about the fact that the 20,000 jobs that will come from London to the provinces represent redeployment. Given that there will be 100,000 or more redundancies throughout the civil service, competition for alternative jobs in the civil service will be extremely intense. I understand that when the Department for Work and Pensions opened the facility at Triune court at Monks Cross, a number of people were redeployed and came to York because they saw it as an attractive place to live. As the hon. Member for City of York said, some even took a pay cut to come, but a significant number were recruited locally, and we hope that that will be, the same in this instance.
The Chancellor, in his statement yesterday, referred to the potential for 250 posts from the Department for Environment, Food and Rural Affairs to be moved to Yorkshire, and just under 100 from the Department for International Development to East Kilbride. We are interested in the 250 DEFRA jobs coming to Yorkshire, and I want to impress on the Minister the history of what was previously the Ministry of Agriculture, Fisheries and Food when it moved jobs to York.
When my party was in government, we were very successful in persuading Ministers not just to create the central science laboratory at Sand Hutton in the south of my constituency on the outskirts of York, but to pull down the old Adams hydraulics factory in the Vale of York constituency. That enormous site was redeveloped with brand new office buildings occupied by DEFRA, mostly for the Meat Hygiene Service. If DEFRA wants to go to York, it may wish to take up accommodation in Kings Pool on Foss Island road, which might mean one or more of the agencies in Kings Pool, such as the Meat Hygiene Service, relocating locally. The scale of the facilities at Triune house would fit the bill.
Finally, I stress the importance, if only in terms of the human cost and the value for money cost of what has been invested in Triune house, of finding an alternative use for this facility. We need strong marketing, but the product that we have to offer is first class. I endorse what the hon. Member for City of York said about the cost and terms of the lease. All those questions are in my notes, but I shall not repeat them. We need reassurance that when the Department says it will find an alternative use, we will see evidence of action to that effect.
>The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)I, too, congratulate my hon. Friend the Member for City of York (Hugh Bayley) on securing the debate. The House knows him not only as the previous holder of the ministerial office 415WH that I occupy, but as an assiduous and effective constituency Member of Parliament. He has demonstrated that effectiveness in the debate this afternoon. I also want to pay tribute to the hon. Member for Ryedale (Mr. Greenway), who has also sought to represent his constituents in a constructive, but determined, way. I hope we can work with them both to find a way forward on a problem that faces us all.
My first remarks must be directed towards the staff of the Pension Service in York. I understand that this is a distressing time for many of them and that the announcement that the closure of the York pension centre is planned must have come as a shock. These are inevitably uncertain and worrying times for them. I pay tribute to the professionalism with which they have responded—one of their first concerns was to ensure the continued efficient service to the public. I therefore want to give them and my hon. Friend the two assurances that he asked for in his opening remarks.
First, the high level of customer service being delivered to pensioners will not be affected by the organisational changes we are making. Secondly, we will do everything we can to help those staff whose jobs are affected by these changes and to pursue vigorously all redeployment options where staff reductions are necessary, with the aim of helping them to find suitable alternative employment wherever possible. My hon. Friend will understand that we cannot rule out the possibility of some redundancies.
These are now matters for consultation with the unions, which is one of the reasons why I cannot give the hon. Member for Ryedale a precise idea of the time scale here. That would be premature, given the consultation process, but in a few moments I will say a little more about the practical arrangements we are making to help staff.
The situation in York should be viewed in the overall context of the changes we are mating in the Pension Service and the Department as a whole. Since 2001, the Department has been rationalising its office network. The creation of Jobcentre Plus and the Pension Service combined the old Benefits Agency and Employment Service networks in two new agencies in modern offices that are focused on the needs of our customers. That has involved moving from an organisation with hundreds of public offices to a centralised approach processing work in larger centres.
As well as the obvious economies of scale, the creation of the local service network working with partners in the state and voluntary sectors has enabled us to be more responsive to our customers' needs and to deliver services more effectively to them. When we made our plans for the introduction of the Pension Service, we did so on the basis of an unprecedented investment in the Department's future. I am talking about an investment of some £5 billion across the Department, including £2.8 billion over two spending reviews in modern IT infrastructure.
We always knew and made it clear that over time our staffing needs would peak with the roll-out of pension credit. That was especially the case given the radical approach of having five-year awards for pension credit. Greatly reducing the requirement to report changes not only improved the experience of our customers, but 416WH simplified ongoing administration. We set out our plans for a managed reduction in our work force of 18,000 posts in October 2002. Since then, we have had the added efficiency challenge, which was announced by the Chancellor in March. That has resulted in our having to find further savings over the four-year period to 2008.
The lessons learned from the establishment of the Pension Service and the success of the centralised process for delivering pension credit demonstrate that we can maintain high levels of service with a reduced work force. Since the budgetary announcement, further detailed planning has been taking place across the Department. This has included discussions on the future size and shape of the Pension Service, the scope for integrating benefit processing in larger centres in Jobcentre Plus, and the continued modernisation of the Child Support Agency and the Appeals Service.
From those discussions, it has emerged that, of the 29 pension centres, we have identified six that should transfer to Jobcentre Plus to improve the efficiency of benefit processing. Two further pension centres will transfer to the Appeals Service and the Child Support Agency. However, at this stage, we have been unable to identify alternative departmental uses for the two pension centres in Liverpool and York.
As requested by my hon. Friend the Member for City of York and the hon. Member for Ryedale, I can give an assurance that we are doing all we can to promote the sites and the work force to other Departments and the private sector, in the spirit of joined-up government that my hon. Friend requested. Both hon. Members know, as they know the site well, that it is extremely flexible and will be attractive in respect of other uses. Given its location, we are optimistic that, if we work closely with them and other agencies, we will be able to find alternative uses. We are working closely with york-england—formerly the York Inward Investment Board—and, as the Secretary of State pointed out when he spoke with my hon. Friend, he has been actively promoting the York and Liverpool sites to Cabinet colleagues.
The Department has an agreement with york-england jointly to market our site and our people, and I can assure both hon. Members that we are investigating opportunities with four Departments that may have an interest in the York area. Following yesterday's spending review announcement, the position of other Departments may be clearer that it was even 24 hours ago and they are therefore in a better position to assess their own needs.
Concerns have also been raised that, when the Lyons report is recommending moving jobs out of London and the south-east, these centres are being considered for closure. It is only fair to point out that when we set up the Pension Service, we did not locate any of the centres in London and the south-east. In fact, only 10 per cent. of the Department's work force is in London and a further 7 per cent. in the south-east. In the north-east, including Yorkshire and the Humber, the figure is 20 per cent.
As a responsible employer, we have been completely honest with our employees and have gone to great pains to explain the situation to them and to help them to prepare for the future. Within the Pension Service, a redeployment unit has been established to work with 417WH managers to find people redeployment opportunities in the DWP or in other Departments. The unit's aim is to help to find people jobs as quickly as possible and to facilitate the development of skills to enable people to take up opportunities. The unit's approach will be fair, open and transparent and it will follow DWP principles of equality of opportunity and diversity, with individuals' needs being taken into account in determining suitable alternative opportunities. In addition, the pension centre management team are in the process of creating a local redeployment service to support staff in activities such as identifying vacancies and completing training to strengthen their Cvs.
Since the announcement at York, we have ensured that the staff have access to experienced human resource professionals to advise on the detailed issues associated with redeployment and severance policies. We have also provided a counsellor from Right Corecare, one of the providers of an employment assistance programme used by the Department. I understand that most staff have attended a presentation by human resource staff and have had a personal counselling session with a human resource adviser.
I shall respond to both hon. Members on the issues that they raised about the criteria used to select York as one of the sites that would no longer be required by the Pension Service. My hon. Friend the Member for City of York raised questions about the cost of setting up the centre in the first place and the cost of closing it now. We obviously needed to balance those costs in making the decision on which of the 29 centres should be considered for closure.
The criteria covered a number of areas and were divided into two categories: the operational tests and the economic tests. The former category included things such as the quality and age of the facilities, the lay-out of the site and the site's capacity to handle larger work loads.
I hear what my hon. Friend says about the buoyancy of the local labour market, but he will agree that there has been substantial growth in employment since 1997, both in the Ryedale constituency and in the city of York. That is not why we took the decision to close the York pension centre, but it is an important part of the context.
The economic analysis concentrated on retaining sites with higher exit costs and lower running costs, including such things as staff exit costs and estates and telephony exit costs.
The suggestion was made that when we established the York centre we always intended to close it soon afterwards, and that the considerable investment we 418WH made was therefore irresponsible. The implication was that we were being less than honest with our staff. I give the reassurance today that that was never the case; we would never have made that investment had we not intended the provision to be long term, but circumstances have changed. The new efficiency challenge that the Department faces—a considerable challenge, but one that we believe we can meet—means that we have to make such organisational decisions across the board.
§ Mr. GreenwayI want to raise a separate point that is important to the people of North Yorkshire. When the office was opened, a number of smaller, local offices closed and people were advised that they could raise their queries at York. Can the Minister assure me that there will be no reduction in service for people living in the county in relation to pensions and other advice on social security?
§ Mr. PondI can certainly give the hon. Gentleman that assurance. There will be no reduction in the service. From the point of view of our customers—the pensioners whom we serve—the impact of the organisational changes will be invisible. We are committed not only to maintaining the service, but to improving it and to providing pension credit to as many people as possible who are eligible.
My hon. Friend the Member for City of York asked one or two questions about some costs involved and the period over which we have the arrangement with Trillium. Our contract with Land Securities Trillium is until March 2018, and because of the categorisation of York pension centre we can give notice to LST in April 2008 for disposal in October 2008. We may be able to reduce that commitment through a commercial negotiation with LST once a decision has been taken on the future of the York building.
My hon. Friend also asked for other specific information on costings. I will write to both hon. Members with that information, which I hope they will find useful.
In the few seconds remaining, I pay a final tribute to both hon. Members for raising the issues in the debate and, most importantly, to the staff of the pension centre in York, who have acted professionally. I reiterate my assurance that we will do everything possible to help the staff through this uncertain and difficult period of change and to ensure that we find them suitable alternative employment wherever possible. To that end, we will be working with them and their staff representatives.