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Question put and agreed to.
Bill accordingly read the Third time, and passed.
20 May 2004 : Column 1196
Fire Service College
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 fire 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 as
"a 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.
20 May 2004 : Column 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 reform 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, that
"a 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"—
"is preferable to going it alone."
That was point 1.16. The review argued that
"a 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 utilisation"
of 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
20 May 2004 : Column 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.
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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 that
"the 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.
20 May 2004 : Column 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 as
"one 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.
6.14 pm
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