BIS Sheffield closure: committee chairs accuse perm sec Martin Donnelly of "impeding" scrutiny

Meg Hillier and Iain Wright demand detail on BIS restructuring – after permanent secretary Martin Donnelly says the department cannot give figures while redundancy talks continue

By Matt Foster

21 Apr 2016

The chairs of two parliamentary select committees have written to the Department for Business, Innovation and Skills' most senior official, Martin Donnelly, accusing him of "impeding" their ability to scrutinise plans to close the department's Sheffield office.

Donnelly announced earlier this year that the department is to vacate its Sheffield site, which provides policy and corporate support to the department, by 2018. The department will instead focus its policy team in BIS's London HQ, with the move potentially putting around 240 jobs at risk.

The decision is part of a wider BIS 2020 strategy, which will see the department cut its number of buildings from 80 to just seven or eight "centres of excellence" over the course of the parliament. 

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Donnelly told the Public Accounts Committee last month that the move would make policy "work more cost-effectively", pointing out that the department has been asked to save £350m in its running costs over the course of the parliament. He also said the vast majority of staff paid for by BIS would continue to work outside of the capital.

But the move has been criticised by local MPs, who believe it goes counter to the government's decentralisation agenda, while unions have warned of the impact on the local economy.

PAC chair Meg Hillier and Iain Wright, the fellow Labour MP who chairs parliament's Business, Innovation and Skills (BIS) select committee, have now written a strongly-worded joint letter to the BIS permanent secretary.

In it, the pair say that information the department has so far provided on its reorganisation plans has been "wholly unsatisfactory" and they say Donnelly's evidence has been "obfuscatory, if not misleading".

They add: "Your refusal to disclose the information we have sought is unhelpful, unjustified and is impeding our ability to fulfil our scrutiny functions."

"Your refusal to disclose the information we have sought is unhelpful, unjustified and is impeding our ability to fulfil our scrutiny functions" – Meg Hillier and Iain Wright

It follows a letter from Donnelly to the committee in which the BIS perm sec said he understood that the committee was concerned "about the status of information relating to the BIS 2020 process and its implications".

But he stressed that "no specific decisions" had been made about the future of BIS jobs in Sheffield "or other sites", pointing out that a formal consultation process is ongoing.

"There can therefore be no accurate figures about the future distribution of posts within the department at this stage since relevant decisions have yet to be made," he added.

"As a result, it is not possible to provide figures on savings over time, which depends on restructuring decisions about the longer term shape of the department and its partner bodies."

In their reply, however, the MPs demand sight of an internal BIS document – leaked last month to media organisations including CSW – which suggested that the department was considering plans to reduce its workforce by more than 4,000 over the course of the parliament and had agreed £100m of savings beyond those required by the Treasury.

"It is not possible to provide figures on savings over time, which depends on restructuring decisions about the longer term shape of the department and its partner bodies" – Martin Donnelly

Hillier and Wright say: "To be clear, and with reference to your letter, we are not asking for the specific decisions about the BIS jobs in Sheffield, nor for accurate figures about the distribution of posts within the department.

"Instead, we are asking for precise information about the work done to estimate the costs of different scenarios in relation to the closure of the Sheffield office and transfer of posts to London. Specifically, could you please provide us with a copy of the document entitled 'BIS 2020 Finance and Headcount Outline', and any other document which has informed decisions relating to the Sheffield office."

The pair say it "would be helpful" to have the information prior to Donnelly's next scheduled appearance before PAC on April 27. That session is supposed to focus on science capital spending, but PAC has made clear that it will also raise the Sheffield issue again.

PCS strike ballot

The intervention by the two senior MPs came as the Public and Commercial Services (PCS) union confirmed that it would begin balloting its affected members in BIS on possible strike action next Wednesday.

PCS general secretary Mark Serwotka said: "BIS's retreat from Sheffield goes against all the government's northern powerhouse rhetoric and what ministers claim to want for the civil service. BIS must come clean on its plans, including full costings, for Sheffield and the wider department."

Speaking to PAC last month, Donnelly said the department had not yet calculated the cost of any redundancies stemming from the Sheffield decision, but he said "about a third" of the roles at Sheffield would "not be permanently in London".

"It's clear that our numbers are coming down and there will be budgetary cover for redundancy payments should we need them," he told the committee.

He added: "We are reducing the total number of policy jobs over time. It's not a straight line because we have a lot of legislative and policy responsibilities at present.

"And some people we will want to encourage to stay on until the beginning of 2018 or late 2017. So there's still a lot uncertainty about the precise timings. But what is clear is the number of policy staff will shrink significantly by 2020 as we move to more flexible working."

BIS's decision to close its Sheffield site has previously been described by Donnelly as "the most difficult" of his professional life.

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