Examination of witnesses (Questions 20
WEDNESDAY 13 DECEMBER 2000
and MR DAVID
20. I am not sure that I drew the conclusion
from your evidence, at that stage, that something as radical as
this was one of the things you had in mind.
(Mr Siddall) I think I, personally, tried very hard
to make it clear to you, Chairman, and to the Committee, at that
time, that we did have a significant deficit which would need
action. I remember raising that with you.
21. We got that far, certainly.
(Mr Siddall) Forgive me, but I made it clear that
we could not carry on like this and we had to make someI
remember explicitly saying that we could not rule out job losses.
We knew the restructuring plan was on the go, and it had been
on the go for several months by then.
22. I must say, I think I grasped what was likely
to come. Not the specific
(Mr Siddall) We could not talk in specifics at that
23. Okay, so there were inhibitions about full
consultation before August. What consultation process has there
been since the announcement?
(Professor Wilson) Since the announcement on 11 September
we have had meetings with the HDC, with the East Malling Trust,
with the East Malling Research Association (EMRA), with the HRIA
and a large number of groups and Site Advisory Committees who
represent the industry both at Kirton and Efford. So we have been
doing a great deal of discussion. As I say, whether or not it
is "consultation" is, perhaps, a moot point, because
by that stage the Government-agreed plan had already been put
24. We have got submissions from romantically
named organisations, like English Village Salads and Yorkshire
Saladswhich are particularly invigoratingand one
here from Humber Growers. "As Chairman of the NFU Protected
Edibles Groupthe group most affected by the closure of
Stockbridge House, and as Chairman of Humber Growers Ltd, one
of the biggest HDC levy payers, I would have thought that some
more detailed information would have come forward by now. It is
very difficult to comment upon whether or not the cost cuts are
being achieved in the most efficient way." In other words,
he is saying he does not have enough details of the restructuring
(Professor Wilson) This is a document you received
25. This is dated 28 November, from Humber Growers.
(Mr Siddall) I think a lot of people are inclined
to take that view. I am afraid the answer we give them is that
we have the facts and it is our duty to manage the organisation.
26. Will the industry have an opportunity of
consulting on the plans?
(Mr Siddall) No, not really, no. It is a done deal,
is it not? We have gone through this with the best advice we can
get. We have had the backing of MAFF, we have spoken to the industry
in the way that Michael has described and we have had subsequent
discussions with MAFF, and the plan is the plan. They are funding
it, they think it is the right decision, and as the management
and directors of this organisation we feel it is our duty to go
ahead. There is not any doubt in anybody's mind, detractor or
not, that we have to cut costs and close a site. The argument
is which site, and that is where the subjectivity comes in.
27. Could we move on to the staff situation?
There are two issues in relation to staff. The second one is to
do with the problems for the staff themselves, but looking at
it from the industry point of view, I have got concerns over the
proposal to reduce the staff by 145/146. Are you convinced or
can you convince the Committee that that is not going to affect
the operation of the organisation in delivering the service that
the industry wants? In particular, are you convinced that the
closure of Stockbridge House, even if you are offering relocation
to some of the staff there, will not lead to the loss of crucial
members of staff that could actually fundamentally undermine the
on-going success of the organisation itself?
(Professor Wilson) Perhaps I should answer that question.
On the first point you raise, in fact, of the 68 compulsory redundancies
identified by the Heads of all the Scientific Research and Technology
Departments in HRI, only one research scientist that you would
classify as a "development scientist" is on that list.
Post losses have actually dug harder and deeper into what you
might call the basic-strategic end, because that is where we have
been taking the cuts predominantly from MAFF. On the issue of
Stockbridge House, we identified eight staff there that we would
have wished to have kept with the organisation. On 11 September
I wrote each of them a long personal letter indicating that we
would seek to develop their careers, that we would give them very
generous packages and that we valued them highly. In the end,
when I asked them to give me an answer by 31 October, all of them
responded by sayingsometimes very brieflythat they
would not be prepared to take up my offer to them, and that, therefore,
they would be making themselves redundant and taking the package
that we were offering. We were not enforcing the "mobility
clause". So, basically, they got a very generous package
and we lost them. We were very deeply upset by that. However,
HRI has many other staff who are equally capable of filling those
gaps, and if we still have gaps then we can recruit to fill the
few key places to deliver the development-type work which will
be lost with the people from Stockbridge. In one or two cases,
I do believe the Stockbridge staff decisions were for personal
reasons, and from what they told me in great detail I accept that.
I think with some of the other issues going on around Stockbridge,
and this new technology centre ideastuff of which we had,
obviously, no knowledge early onthat may have influenced
some of them, I believe.
(Mr Siddall) If I could just add to that, in general
terms on the staffing and the capability of HRI to do its job
properly and to support its future business development, there
is no question that we have preserved the full capability and
that the reorganisation and, essentially, the simplification of
a multi-site organisation will make it possible for us to be much
more productive and efficient. This is something that I think
we are very clear about. We are much better organised and having
three main sites in future will enable us to be much more concerted,
efficient and fast in the way we operate. There is another level
of staffing problem where I think we do have a problem, and that
is at the management level. We are still quite weak there. We
have lost one or two people in recent times, and we do need to
strengthen the management team in particular areas, which I think
are well-publicised. We are a bit under strength there, and that
is of concern to me at the moment and to the Board.
28. I understand there are some concerns from
within the industry that the capability of the organisation will
still be there after the reductions in staff have been made. To
what extent have you been able, as a result, as you have gone
through the specific posts and you have got responses from staff
on whether or not they will transfer or move, to satisfy those
concerns from the industry (particularly those in the north of
England, who, I think, are particularly concerned about the loss
of the facility) that the same sort of research will take place
in the remaining facilities?
(Professor Wilson) I can, perhaps, give two parts
of an answer there. One is that on 1 December we met the HDC Council
and a large number of senior staff, those key staff that are in
HRI who are particularly involved in development-type work. We
spent many hours with the HDC Council. We presented very thoroughly
our succession planningthe movement of staff and the movement
of projectsand I can quote from a joint press release from
the HDC and HRIwhich will come out in The Grower
tomorrow, I am told"The HDC felt comfortable with
HRI assurances that the vast majority of the projects would be
completed on time, provided the plans to recruit key staff are
successful." We are in that process now. We already have
over 95 per cent of the HDC projects covered. We have been through
them in great detail and my scientists and research staff have
basically looked at every individual and we have looked at the
funding of every individual, we have looked at their skills, and
the 145 posts (68 of which were compulsorily made redundant) were
all thoroughly analysed for their impact on the capability capacity
of the organisation.
(Mr Siddall) In general, I think we have an issue
about maintaining the confidence of the industry. I think this
is a general point which has come up. It is probably appropriate
to deal with that at this point. I think we are conscious, as
a result of the extremely strong outcry that has arisen, that
the industry is not very happy with us. We think that we are still
doing the job, and the evidence that we have is that we are transferring
technology and serving the industry in the same way as we have
done hitherto, and that there has not been any falling off. However,
the perception this year has grown very rapidly that that is not
the case, and that we have gone all sort of high-science and we
are not interested in the industry and in development any more.
This, I think, is a problem we have to address and we are very
committed now to rebuilding bridges with the industry at all levels,
and we have made some clear commitments to HDC, in particular,
about closer liaison at the high level of the Chairman and the
Council and, at the lower level, of the sector panels. In particular,
in relation to the population around Stockbridge House, there
are obviously a lot of growers who are feeling that we have abandoned
them. That is not the case. We have to make absolutely sure that
the communication, that technology transfer, will continue without
our having a physical presence on the ground in Yorkshire any
more. That is a clear obligation which we accept. We do it in
other parts of the country, we do not believe that the technology
is regional specific anyway, but the communication must be to
the growers where they are. That is something which we can be
a lot better at in the future, and we are taking very active steps
to do that.
(Professor Wilson) In fact, I could embellish on that
point because last May, at one of our pre-Board dinners, both
Mr Sparkes and Mr Ward who attended, made the point that it would
actually serve the industry better if HRI were to organise farm
demonstration projects in localities to cover the whole of the
UK. They also made the point that if the research and the development
and technology transfer were good enough it would be immaterial
where the site was; they would travel to any site for something
which was going to add significant value to their business. They
would go to California, if necessary. Most of them work in the
UK and Spain anyway.
29. Can I just ask a question about the people
who have chosen not to go on with you? Are they taking early retirement?
Are they going elsewhere in the industry? Or are they just going
to leave the industry? One presumes that this is quite a loss
to the industry as a whole.
(Professor Wilson) All of them that have communicated
with me have simply indicated that they are not going to stay
with HRI. Some of them may be going off to be consultants. I really
have not done what you might call an "exit survey" of
what their plans are. Some of them may wish to get involved in
other organisations in that part of the country. As far as we
are concerned, we are being generous in our interpretation of
the redundancy packageswhether voluntary or compulsory,
or people who have been offered posts and decided not to move.
We still give them a package.
30. Let us turn to Stockbridge House, which,
on the face of it, looks very much like a panic measure and a
particular piece of vandalism towards industry. We have received
very strong letters of concern and protest about what has been
going on. Here is Humber Growers, again. " . . . Stockbridge
House is the only site currently owned by HRI which has a `Good
Laboratory Practice' certificate, essential to carry out [MAFF]
work. Also, the staff who are employed on the SOLA programme have
all indicated they are not willing to move to Wellesbourne . .
. Stockbridge House is the one site owned by HRI which had the
glasshouse space to carry out the `muddy-boots' side of HRI's
workwithout it the transfer of knowledge to the industry
will be lost . . .", and HDC will not be able to deliver.
Then I have the letter I cited earlier from Bernard Sparkes which
says: " . . . a very credible performance from a well managed
site with teams of scientists and development personnel working
on more than 20 HDC projects, managed by people highly rated by
the industry. These are the teams of people the industry cannot
afford to lose." That makes your decision to close it look
like sheer vandalism.
(Professor Wilson) It was not vandalism. Can I address
a number of those points specifically, because they are actually
wrong, to put not too fine a point on it. I suspect they are part
of an orchestrated or, at least, concerted campaign that we have
been up against recently.
31. Orchestrated by whom?
(Professor Wilson) Orchestrated by people around Stockbridge
House, which we can understand, but the facts have been wrong
and I must correct them. Stockbridge House is not the only site
that has GLP; Kirton in Lincolnshire and Efford both have GLP.
On the point of SOLA, half of the SOLA trials have actually been
done at Kirton over the last three years. If you look at the data,
a large amount of SOLA trialling, the QA and the Assistant QA
officers, the Archivists, the Assistant Archivists and the field
trial people, are at Kirton and at Efford. We presented to HDC
the plan for the continuation of SOLA. Our discussions are on-going
regarding the key co-ordinator, the single person that is perceived
as being important but, by no means, unique in that skill in the
UKor in HRI for that matter. Stockbridge House does have
extensive glasshouses. In fact, it has about a third of the total
glasshouse area of HRI. Another third resides at Wellesbourne
and the other third at Efford. As the Chairman has said to you,
we have surplus assets, and the option of the closure of Stockbridge
House, the changing of arrangements at Kirton, and the other decisions
on the number of post losses, represented one of half-a-dozen
options that we looked at and carefully scrutinised. The reason
we closed Stockbridgeand I accept that the teams there
have been very successful and are highly regarded in the industry
(that is why we sought to keep them)was because it has
no unique facilities. There is nothing unique about the labs or
the glasshouses at Stockbridge that is not replicated elsewhere
within HRI, and on all of our other sites there are unique facilities
which we could ill-afford to lose, some very expensive unique
facilities, in which MAFF and other sponsors have invested. What
was your last point about Stockbridge?
32. The muddy-boots side of it and the fact
that technology transfer is best done from that kind of facility.
(Professor Wilson) We believe technology transfer
can be done from all facilities. In fact, the interesting statistic
is that indeed 20 per cent of our HDC funding has operated through
Stockbridge, but 34 per cent of it comes out of Wellesbourne.
There is a misconception that Wellesbourne is a blue-skies, academic
research site, which it is not. Most of our commodity specialists
and the people who sit on and interact with Sector Panels in HDC
actually reside at Wellesbourne. If you really want to look at
industry interactions with the R&D base, if you go into the
LINK programmes, HRI participates in 24 LINK programmeswe
are the most successful LINK organisation in MAFFand 18
of those 24 LINKs are managed and were put together by scientists
at Wellesbourne, 4 of them at East Malling and none of them at
33. Are you satisfied you can carry on the SOLA
work to appropriate levels while the staff will not transfer and
you are going to have to set up programmes elsewhere?
(Professor Wilson) We already have the programme elsewhere.
34. Is it going to be adequately conducted in
the new environment?
(Professor Wilson) Yes.
35. I cannot really see what contribution closing
Stockbridge makes, because we are toldthis, again, is Bernard
Sparkesthat you told him "that Stockbridge almost
`wiped its face'".
(Professor Wilson) I certainly have no recollection
36. He saysand this is his information,
not hearsay from youthat " . . . only 10.5 per cent
of its income comes from MAFF, with 3.5 per cent from the European
Union . . . 45 per cent from HDC and a further 41 per cent from
commercial contracts." Now, HDC, the European Union and commercial
contracts are all, presumably, transferable if Stockbridge House
sets up as an independent technology centre. So, with only 10.5
per cent from MAFF, closing Stockbridge House is not going to
make much of a contribution to your core problem of insufficient
public sector funding.
(Professor Wilson) I contend that it is. It will save
us the running costs of Stockbridge Housethe fixed asset
loss. The decision to close Stockbridge was not made on specific
financial grounds, although I am sure Mr Temperley could furnish
you with some numbers which would, again, refute some of the claims
that Stockbridge "washed its face" or even made a profit
over the last several years. In any case, the mix of funding at
Stockbridge is not the reason that Stockbridge was or was not
chosen, it was the overall effect. It had one-third of the glass,
which, by definition from the previous HortiTech strategy, was
a surplus asset that we were trying to sweat, unprofitably. We
do not need that asset. What we have been doing, basically, is
cutting our asset "cloth" and our partially-funded staff
"cloth" to match the budgets that we have now and anticipate
from our sponsors for the next several years.
37. If the Stockbridge Technology Centre is
set up, and the prospects seem good, and it is an effort I would
commend if it keeps this technology and this facility in the north
of England, it has got to divert funds from you; it is going to
divert HDC funds, it is going to divert European funds and it
is going to divert commercial funds to carry on the work at Stockbridge.
(Professor Wilson) What I would say there is, first
of all, we are not obstructing the formation of the STC.
38. Are you encouraging it?
(Professor Wilson) We are not actively encouraging
it either, because it will compete with usas you rightly
say. It is like your point about universities and others; I am
happy to compete but I am certainly not going to assist a competitor
organisation establish itself. I have already spoken with the
Member of Parliament, Mr Grogan, on that point, and, yes, good
luck to them, but it will remain the case that HRI has the largest
group of expert horticultural research scientists, technologists
and commodity specialists etc to furnish the widest spectrum of
39. If you are closing it to, effectively, save
on the 10.5 per cent that comes from official funding, you are
cutting your nose off to spite your face, are you not, because
you are going to face the threat of losing other funding, which
will now go to Stockbridge and not to you?
(Professor Wilson) Can I let an accountant explain
(Mr Temperley) If that was the case I think you would
be right, Mr Mitchell. Our intention was to transfer the private
sector work as well as any public sector work. Our intention was
not to leave it there. Clearly, if the Stockbridge Technology
Centre sets up and is successful in attracting that work away
from us, then it will have some damaging effects on our overall
plans. It would be foolish to pretend otherwise. However, in our
long-term business case we would still compete with them, and
we would look to build that over time, but in the short term it
would clearly cause us some difficulties. We anticipated a saving,
if you like, contribution from the closure of Stockbridge of the
order of £650,000 towards our £3 million, and that included
transferring the vast majority of the income to other sites without
transferring the expenditure. That is where the benefit comes
from when you carry out this type of rationalisation programme.
So, clearly, if they compete with us in the north it will have
some impact on us.