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Office for National Statistics (Runcorn)

1.30 pm

Mr. Mike Hall (Weaver Vale): It is customary to start by saying that is a pleasure to have an Adjournment debate in Westminster Hall, but the topic of this debate does not give me or my hon. Friend the Member for Halton (Derek Twigg) any pleasure; we are here to record our dissatisfaction and discontent at the decision to close the Runcorn office of the Office for National Statistics. My hon. Friend and I act as a partnership and have spent a great deal of time in the past four or five years trying to make sure that we secure a future for the ONS in Runcorn. We are therefore disappointed at last month's decision.

To understand that decision, we must look at the history of the Runcorn operation. Just after the 1997 election, my hon. Friend and I went to see my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), who was then Economic Secretary to the Treasury, to impress on her the need to keep it running. A review of ONS operations concluded that there was no economic justification for closing the Runcorn office because the cost of redundancies at Runcorn would far outweigh savings that would be made by transferring the operation to Newport. My right hon. Friend therefore decided to keep the Runcorn office open, giving it a guaranteed future for five years. There was a proviso, however, because it was made clear to us that if the economic situation changed and the cost of redundancies went down, it might be economic to close the Runcorn office. The decision, therefore, was to be reviewed and revisited.

As we approached the end of the five-year review period, my hon. Friend the Member for Halton and I went to see the Economic Secretary to the Treasury, our hon. Friend the Member for Bolton, West (Ruth Kelly), to talk about the future of the Runcorn office. It was obvious that the economic arguments for closing the office had not been made. We tried to impress on her the fact that the ONS had made known its wish to close the Runcorn office for managerial convenience; it is a small office, and the ONS did not think that it had a future. Its preferred option was therefore to close the office.

We were certain that in 1997 the ONS had been given two opportunities to deal with the problem—to transfer work from any other part of the organisation to the Runcorn site, thereby offering the office a viable opportunity to survive and a sustainable future, or to move staff from the Runcorn office, reducing redundancy costs and making it economic to close the office. However, it did neither of those things, which surprised me; instead, it tried to allow the Runcorn office to wither on the vine. That is not good management, and it created a bad feeling among the work force, whose morale was low, having been poorly managed for four or five years as a direct result of the ONS decision to allow the office to wither on the vine.

When my hon. Friend and I went to see our hon. Friend the Economic Secretary, we gave her a straightforward message. We told her that we were not interested in any arguments about closing the Runcorn office for the convenience of ONS management. We said that the work force were loyal, had been there a long time and were committed to the ONS; we did not want

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the office to be closed for the convenience of management. We wanted a comprehensive and transparent review of the whole ONS operation to take a proper look at what was going on in the ONS, recognise what it needed to do to meet the challenges of the 21st century and identify problem areas—clearly Runcorn is a problem for the ONS. We wanted the ONS to put all that together in a comprehensive review and come up with a blueprint for taking the organisation into the 21st century.

The ONS could have looked at the major problem of office space in London. It has expensive, overcrowded offices in London, where recruitment and retention are a problem; it could easily have tackled that by distributing work to Runcorn, where office accommodation is abundant and cheap. Employment costs are far lower in Runcorn than in the capital and retention and recruitment are far easier. Such a review could have taken place but, sadly, it did not. Instead, there was a review of the Runcorn office in isolation to see how the particular problem that had been found there could be tackled.

The National Statistician made an announcement on 13 November giving a number of less-than-convincing reasons for deciding to close the Runcorn office. He started by mentioning something that those of us interested in the ONS had known for some time: that integrating a small office in Runcorn with the major statistical centre at Newport was a long-term problem. In this day and age, that should not be a problem; with modern technology, we could have remote working. A range of information technology should mean that such working is not a problem for anybody—and certainly not for anybody with any imagination.

The National Statistician said the ONS wanted greater integration of statistical processes, and that its operations would be driven by new technologies. I do not see that that is a problem; if the ONS wants new technology, there is no reason whatsoever why it could not install it at Runcorn. The National Statistician also said:

Again, there is no barrier to re-skilling the staff at Runcorn and changing the work processes, which could be connected by a remote link to those in Newport. The National Statistician then came up with a gem:

Of course, in the next four or five years, the ONS will not employ fewer staff at Runcorn; it will not be employing any, but that is no reason to close the office. At the end of his statement, the National Statistician returns to an old chestnut:

If Runcorn is too small, it is because it has been kept that way by the ONS, and that problem could have been tackled.

Almost as a throwaway, we were told:

I do not disagree; the move may well achieve those aims. However, that is not a strong enough justification for the decision to close the Runcorn site.

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The Runcorn decision appears to have been made in isolation; there was no full and comprehensive review of ONS operations, and the process has not been transparent. The ONS has provided a feeble excuse for closing Runcorn, which it is doing for the convenience of management. There is no strategic overview to the decisions and the ONS has not taken the opportunity to tackle the problems that it faces in the 21st century. Sadly, it has not shown any vision or the will to keep the Runcorn office open. The decision will cost up to £5 million in redundancy costs; that money could be used to strengthen ONS services elsewhere.

I shall conclude with a straightforward point. We would like the decision to be put on hold; we doubt very much that that will happen but we would like to press the Economic Secretary for a response. There should be a full, comprehensive and transparent review of what the ONS wants to do in the UK to meet the challenges of the 21st century. It should look at all ONS operations, not just the Runcorn problem in isolation, and should come up with a blueprint of what can be done in future. It would benefit my local community and be in the Government's interest to move work from the capital to Runcorn. Government always bring benefits, such as an economic benefit, because they spend a lot of money, employ a lot of people and do a lot of work, and we should share those benefits throughout the regions. That would be a great benefit to the borough of Halton. My hon. Friend the Member for Halton will elaborate on the fact that Halton is the 18th most deprived borough in the UK. We need more Government investment, not less. The work force need the Government to say that they are committed to the site in Runcorn and that the work force have a future. That is a challenge. It may take five or six months to carry out a review, but it should not be difficult.

If, at the end of the day, we still cannot make a case for keeping the Runcorn site open, we might have to accept its closure, but I am not convinced that the measures that we have asked for have been taken. The work force in Runcorn, who have given dedicated service in the employment of Government over a number of years, have not been treated fairly.

Even though there are still 12 months to go, the ONS has already made a decision to take work away from the Runcorn site. That is wrong and has left the work force feeling even more demoralised. I hope that my hon. Friend the Economic Secretary can give us some comfort and will undertake to reconsider the decision.

1.40 pm

Derek Twigg (Halton): I congratulate my hon. Friend the Member for Weaver Vale (Mr. Hall) on securing the debate, which is of great importance to us locally, and on his excellent contribution setting out the background and our concerns as local Members of Parliament. As colleagues, we work closely for the Halton borough and we have had many successes as a result of that partnership, but on the present issue we have not had the success that we hoped for. However, that does not detract from the need for a case to be made for keeping the Office for National Statistics at Runcorn and for questions to be asked about the decision that was taken.

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It is worth pointing out the human aspect of the case. I have worked with a number of people who now work in the ONS. I know what a tragedy the decision is for people who previously worked in Runcorn at the Department for Education and Employment and at the ONS site. Many people have been there for well over a decade—16 years or more. The work force is well established and have given their loyalty and commitment to Government and to the need to provide a good service.

The loss of those jobs would be a loss to the local economy. They are good-quality jobs, requiring specific skills. As my hon. Friend mentioned, Halton is the 18th most disadvantaged borough in England and Wales, so any job loss is a blow. Only a few years ago, the work force numbered 120 to 140, but now only 80 to 90 people are employed at the ONS. You will know, Mr. Pike, of the various economic pressures in the north-west and the loss of jobs that is occurring. We want to avoid that.

The only positive aspect of the decision about the future of ONS Runcorn is the fact that a decision has been made. It has been outstanding for a number of years, which has had an effect on staff. Despite the decision, people who work at the site have told me that they still have not been given adequate information to justify the closure. They have suffered much frustration and stress over the years. As my hon. Friend noted, there was an argument about the business case four and a half years ago. We proved that there was no business case, and the then Minister accepted our argument. We were therefore surprised when the ONS outlined the reasons for the current decision, which in our view moves the goalposts.

One of the factors that has been mentioned in our discussions is investment in new technology and in the management systems for the ONS. Given that new technology can stretch out around countries and continents, I find it difficult to see that as an important argument for closing the office at Runcorn. On the contrary, it is probably an argument for keeping it open.

We accept that the Runcorn site is the smallest; it was part of a general Government office site in Runcorn. The efforts made by the Department for Education and Skills to ensure that exit jobs were created at the Runcorn site of its headquarters across the road from the ONS site have sustained and consolidated the Department's headquarters buildings there. ONS management did not seem to want to go down the same road, even though it has been proven that that can be done.

My hon. Friend outlined the argument for transferring jobs out of London, where there are hundreds of employees in a very expensive building. Some, if not all, of those jobs could be transferred to Runcorn, which has a higher level of unemployment, social stress and disadvantage. Not only would that be good for us in Halton, but it would be good for the Government. The cost of jobs and buildings in London is much higher, staff turnover is much greater, and keeping good-quality staff is much more difficult. None of those is a problem in Runcorn and Halton. I do not understand why ONS management did not consider that feasible.

The decision took a long time to be reached. That may be due partly to the representations made by us and others in favour of retaining the site at Runcorn. During

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that time, management provided little information. I know that my hon. Friend the Economic Secretary has been in post for but a few months and I do not blame her or her predecessors. Management were lax about providing regular information to staff, which is part of the reason why such frustration has built up among staff, and why they would rather have even a negative decision than none at all. They have had enough of the way in which they have been treated. That illustrates how the ONS has been managed in recent times.

From speaking to members of staff and constituents at the Runcorn site, I know that they feel that they should have the opportunity to get another job locally or to take a redundancy package if that suits them. There is talk of avoiding compulsory redundancies. When managers went to the site to talk to staff on the day that the decision was made, they gave the impression that they did not expect any problem in finding jobs for staff or making available a proper redundancy package for those who wanted to take it. That is what some people want; they are keen to move on and find new careers. I want my hon. Friend the Economic Secretary to be aware of what staff were promised on the day that the meeting took place.

I should be interested to know what consultation took place with personnel managers in the Department for Education and Skills prior to the announcement and since. There is a rumour going around, which may not be true but which I should make public, that personnel managers in the DFES were surprised to learn that they were so closely involved in trying to find a solution. I could be wrong, but this is probably the right forum in which to mention the rumour. What response has been forthcoming from personnel managers in the DFES about providing help in finding new jobs?

There is concern among staff—which demonstrates their commitment—about whether ONS will be able to provide the same service post-Runcorn or even in the immediate future, or whether there are moves afoot to reduce the services that the ONS supplies to its customers and users.

I cannot stress enough how loyal the staff have been at the Runcorn site, and how hard working, how committed and how skilled they are. They would clearly prefer the decision to be reversed so that they could have a future and a career there. I shall not repeat the arguments that my hon. Friend the Member for Weaver Vale presented so coherently and succinctly about why we believe that the decision could still be reversed and the jobs saved.

I wonder whether part of the problem is the way in which the ONS has been managed. Again, I stress that my hon. Friend the Economic Secretary has been in the job for only a few months, but I am sure that she is aware of some of the shortcomings that have been mentioned. I believe that ONS management have let down the staff at Runcorn, have not managed the situation well for a number of years and are still not managing it well. I believe that some of the issues that have arisen in the ONS in the past year or two indicate poor management control and involvement. I want my hon. Friend to be aware of the concerns that have been expressed about those issues. I am sure that, being new in her job, she will consider them.

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Finally, the closure of the Runcorn office is a loss to Halton and to the local economy. These are the sort of skills that we can ill afford to lose. I make it clear to my hon. Friend the Minister that there is still a great deal of anger about the decision. We feel that the jobs should still be saved and that jobs should be brought to Runcorn from the London headquarters of the ONS.

1.50 pm

The Economic Secretary to the Treasury (Ruth Kelly): It is a pleasure to be here under your chairmanship, Mr. Pike.

I must start by congratulating my hon. Friend the Member for Weaver Vale (Mr. Hall) on securing this debate, which deals with a very important issue. The closure of the Office for National Statistics in Runcorn is a matter of significant concern for his constituents, for the north-west and for me as the Minister who has departmental responsibility for the ONS. I know about the contribution that he and my hon. Friend the Member for Halton (Derek Twigg) have made on this subject and about their commitment to the welfare of their constituents.

Nobody likes to see offices close, and I should like to assure everyone that the decision to close Runcorn was not taken lightly. Before addressing the key matters in this debate, I should like to remind members that the Office for National Statistics operates from five sites: Newport, Titchfield and Runcorn, which deal with statistics, Southport, which deals with registration services and, of course, London. The Runcorn office is by far the smallest of those sites and employs fewer than 100 people on a permanent basis—all the other offices employ at least 600 people—and its work is very closely linked with that of Newport.

The ONS has been reviewing the future of Runcorn since 1996, as my hon. Friend the Member for Weaver Vale pointed out. In 1997, my predecessor agreed with the ONS that, in the longer term, Runcorn was not seen as having a strategic future as part of the ONS. However, a final decision was not taken at that time. Indeed, a commitment was given to staff that the site would not be closed before October 2002, unless that could be accomplished without a significant number of redundancies. As has been pointed out, uncertainly about the future of Runcorn has caused staff considerable concerns since that time. Morale is low, career opportunities are extremely limited and, although staff perform a much-valued role in very difficult circumstances, concern about the long-term future of the site has had an unwelcome impact. Indeed, the one key point that was made during the recent consultations on the future of the site was that a final decision one way or the other was seen as being at least as important as the decision itself, if not more so.

In order finally to settle the issue, further consideration was given to the future of the site, most recently by Len Cook, the new National Statistician. On taking office, he considered the matter as part of his reappraisal of the business and the development of a longer-term business strategy for the organisation as a whole. Part of that emerging strategy is concentration of the production of statistics on the two main sites of Newport and Titchfield. The Runcorn site was considered too small to remain viable in its own right,

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especially as the work conducted there has very close links with that which is undertaken at Newport. Investment decisions always require priorities to be established. At a time when the ONS is facing considerable challenges in the development of the infrastructure to support national statistics, it decided that the maintenance of a small and remote site could not be justified. I shall explain why I have come to agree with that view.

Closing a site, no matter how small, is always a very difficult decision. It has become clear to me that this decision is not justified purely on the basis of financial costs in respect of redundancy and moving staff to another site. It rests fairly and squarely in the context of a much broader strategy for the ONS as a whole, which includes an accommodation strategy and a management strategy, as well as the modernisation of the ONS service itself. The ONS is implementing a challenging new business strategy agreed by Ministers earlier this year, which focuses on radically overhauling statistical infrastructure, investing in information technology to support the ONS in becoming an e-business, modernising the administrative systems and investing in staff to ensure that they have the skills, flexibility and so on that are needed under the new process.

The decision was certainly not taken in isolation from the other major strategic decisions concerning the ONS. I would never have taken a decision on that basis. In particular, as my hon. Friends the Members for Weaver Vale and for Halton know, I specifically asked the ONS to consider options such as the transferral of headquarters functions from London to the site at Runcorn. However, that option was also presented as non-viable in the context of wider strategic reforms and modernisation of ONS output. None the less, that option was explored in detail and presented to me for consideration.

Having considered the issue and asked for options to be explored, my conclusion is that the decision of the ONS and its new director on the closure of the Runcorn office is grounded in the overall business strategy of the ONS and will lead to improved efficiency for the organisation as a whole in the longer term. Maintaining the site would have required further investment in accommodation, in addition to the overheads of maintaining a fifth site, and would not have been optimal in the context of the overall business and investment strategy.

In supporting the decision of ONS management to close the Runcorn office, I have been especially mindful of the following key points. First, this is a business decision the ONS wishes to make—a fairly obvious point, but one that needs to be borne in mind. In terms of the overall business and strategy of the ONS, this consolidation offers the opportunity for all-important efficiency gains that would be difficult to achieve if its operations were more thinly spread. For example, small specialist teams are needed in Runcorn to support staff. Such support for computer systems, training or personnel will be available in Newport from bigger

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teams and at lower costs. Costs for infrastructure such as computer networking or building maintenance will all be considerably lower following consolidation.

Regardless of the timing of the decision, even if it had been decided to keep Runcorn open for a little longer, its future was, given its size, always going to remain uncertain. Above all, it was certainty that all the staff wanted. The ONS plans to transfer the work with minimal disruption to the timeliness and quality of the affected outputs. Finally, I took into consideration the fact that the ONS would ensure that the consequence of the closure would be managed sensitively, taking account of the staff's wishes as far as was practicable. It is, of course, important that the ONS achieves that business transition efficiently, but it is an even higher priority that it achieves it with thoughtful regard to the staff in Runcorn—the people who are most affected by the decision. I completely agree with the points made by my hon. Friend the Member for Weaver Vale about the loyalty and commitment of the staff in Runcorn, who have been working in circumstances of considerable uncertainty for a long time.

The ONS will offer all staff the opportunity to work at other ONS sites. If they choose to do so, they will be reimbursed for any costs that they incur by transferring. Initial consultation with staff indicates that about a dozen people are considering that option. The ONS will also liaise with other Government Departments working in the region to ensure that ONS staff have maximum opportunity to continue working in the civil service. My understanding is that an agreement in principle has been reached with the Department for Education and Skills, which has said that it will consider ONS staff and try to accommodate them where possible. For those who do not continue in work, the ONS will offer full redundancy payments in accordance with the terms laid out in the civil service management code. In the meantime, it will continue to invest in its Runcorn work force in terms of training and development in the 15 months up to the final closure date. That will help not only to maintain the quality of ONS output throughout this period, but to prepare staff for new job opportunities, whether they are inside or outside the civil service.

In conclusion, this is an important issue, and as such, Len Cook, the director of the ONS, himself announced the decision to Runcorn staff. He took questions from them on the day and has supported initiatives to help in finding opportunities for alternative employment in the area. That has included the development of contacts at working level with the DFES. What is most important is that the uncertainty of the last few years is resolved and that staff know where they stand. The future of the Runcorn site has been under consideration for a long period and has been formally reviewed several times. I am convinced that the decision to close the Runcorn office is the right one for the longer-term business plan of the ONS. It is the only decision that brings the certainty that everyone wanted. The transfer of work from Runcorn to Newport will take place over a period from April 2002 to March 2003.

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