Select Committee on Administration Third Special Report

Response

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Money

Committee Recommendation 1

We accept that the trend towards controlling and reducing the subsidy is a reality. Furthermore, we believe that the Refreshment Department should be more actively trying to lower costs in a way that does not affect the quality of the goods and services provided. (Paragraph 29)

1. We agree that the catering subsidy must be prudently controlled and kept under scrutiny to ensure that the services provided by the Refreshment Department represent good value for money and that the Department should seek every opportunity to reduce costs when this can be achieved without detriment to the quality of the goods and services provided. The Finance and Services Committee will continue to play an important role in scrutinising the key performance indicators achieved by the Refreshment Department, reviewing the subsidy target and advising on the speed with which it is aimed to achieve any further reductions.

COMMITTEE RECOMMENDATION 2

We have sought to establish whether there are measures that can be taken to improve the quality of service that Members and other users receive from the Refreshment Department, while at the same time seeking to sustain the subsidy reduction that has already been achieved. (Paragraph 29)

2. The Refreshment Department recognises that the emphasis on reducing the catering subsidy in recent years has, to some extent, pulled management focus away from customer service. To redress the balance, the Department has made an investment of over £30,000 to commission a customer service training programme for all its staff. Supervisory grades of staff, who lead front-line service delivery, have been identified as being critical to the success of meeting customers' service expectations, and they are being trained to a higher level to equip them with the skills to become customer service 'champions'. To complement this, supervisory skills development has been identified as a priority area in the Department's training and development programme for 2006/07.

COMMITTEE RECOMMENDATION 3

At times when Members are not around, such as weekends and during recess periods, we believe the Refreshment Department could become more proactive in its marketing and the Parliamentary Estate could become more open to hosting appropriate events. (Paragraph 31)

3. There are two principal constraints on more extensive opening of refreshment facilities at weekends and during recess periods. The first is security. Currently, House security arrangements do not permit visitors to use catering services other than the Jubilee Café unless accompanied by a Member or appropriate passholder. Any extension of services on a different basis would need to be planned in a way that ensures that there is no associated security risk. The project for the new Parliamentary Access Control System (PACS) is predicated on the maintenance of a public route or zone, beyond which unescorted visitors need not go. Opening of the Refreshment Department's restaurant or banqueting facilities to the general public, whilst potentially profitable, could compromise the underlying principles of and investment in the PACS project.

4. The second constraint is the timing of maintenance and other works. At present only weekends and recess periods are available to undertake work so as not to disrupt the business of the House. The Estate's Works Programme would require more intensive planning and co-ordination, and works would undoubtedly cost more to deliver if access was restricted by more extensive weekend and recess opening of refreshment facilities.

5. The Refreshment Department's banqueting and private dining service remains open throughout the year, with the exception of August, and is only closed on Sundays. These closure times coincide with periods of very low demand for private functions, and enable staff holidays and rest days to be properly planned. However, the closure periods are not absolute, and the Department will continue to cater for functions that are either of great importance to the House (such as the recent European Presidency events) or which present a particularly commercially attractive proposition. The Refreshment Department will require guidance about what functions might be appropriate and in keeping with the dignity of the House before any significant change to the rules relating to the sponsorship of functions could be considered.

6. The opening of facilities at weekends can be costly, requiring staff such as security, cleaning and maintenance crews as well as catering staff. Many staff of the House are contracted to work a 5-day, Monday-Friday week, with weekend working attracting premium payments. Weekend functions attract an additional charge to cover these additional costs, but detailed analysis demonstrates that smaller functions are uneconomic at weekends unless they coincide with staff being brought in to cater for larger events. It is doubtful that a restaurant service could be provided economically unless premium payments for weekend working could be avoided. Such a change would almost certainly meet with strong resistance from staff.

COMMITTEE RECOMMENDATION 4

Matching human resources to demand is an ongoing challenge for Refreshment Department Management. (Paragraph 32)

7. The Refreshment Department is aware of the crucial importance of controlling its staff costs, as these typically represent over 60% of its total operating costs. We acknowledge this point, and encourage the Refreshment Department in its efforts to gradually change working practices in order to increase the flexibility and, hence, productivity of its workforce. We note that the Department has already achieved considerable gains in this area, as evidenced by a reduction in its staff complement from almost 320 staff ten years ago to less than 300 in 2004-05, despite a 50% growth in business levels over the same period. This has been achieved by a constant review of business activity trends, attempting to match human resources in the most cost effective way and seeking opportunities to change.

8. As an Investor in People, the House is committed to the welfare of its staff, and changes in working practices that affect people's personal lives, or which require investment in their personal training and development, must be tackled with sensitivity. Business needs must be balanced against issues such as the work-life balance of our employees. Changes in working practices, which are inevitable over time, require careful communication and consultation with those affected. These issues are not unique to the Refreshment Department and the challenge of meeting the needs of the House through the effectiveness of staff employed in the House service is a key priority area in the House's 2006 Corporate Business Plan.

Strategy and innovation

Committee Recommendation 5

In view of the challenges it faces and the desirability of co-ordination with the ten year works programme, we consider that the Department would benefit from a ten-year strategy document, with objectives clearly set out in areas such as: service levels, productivity, benchmarking, selling prices, quality of product and staff training. (Paragraph 44)

COMMITTEE RECOMMENDATION 6

We recommend that the Refreshment Department prepare a draft strategy document for us to consider within three months of publication of this Report, with suggestions for revised specifications and with timescales and key performance objectives for each part of the service to deliver the strategy. (Paragraph 47)

9. The Refreshment Department already contributes to the development of the long-term Works programme as it is possible to identify major refurbishment work over this timeframe. It is proposed that in future the Administration Committee is given the opportunity to provide input into that contribution on an annual basis. However, other aspects of the Department's services cannot reasonably be planned over a 10-year horizon as they are dependent on factors that are subject to short and medium-term change. For example, the House's outline strategic plan only covers the period up until 2010/11.

COMMITTEE RECOMMENDATION 7

We recommend that an individual within the Refreshment Department should take responsibility for encouraging, gathering and analysing innovative ideas from both within and outside the Department that might help to improve service delivery. (Paragraph 49)

10. Menu concept development and food product innovation is a prime responsibility within the Executive Chef's remit. However, innovation must be part of the overall management ethos and responsibility and, as such, must continue to be part of the role of every manager, senior chef and supervisor delivering services in the Refreshment Department.

11. To stimulate and encourage innovation in its operations, the Refreshment Department intends to increase the exposure of its staff to new concepts and ways of doing things. It will achieve this by organising study tours to other organisations, including visits to both contracted-out catering sites and to successful commercial 'high-street' operators. This type of activity is commonplace in commercial business and already takes place for key managers. The first priority will be to formalise this programme and extend it to include key supervisors and chefs, and gradually, to extend the visits programme to staff at all levels. The education programme will be supplemented by regular briefings from a third party expert organisation able to keep up with the fast-paced changes in the foodservice market.

COMMITTEE RECOMMENDATION 8

A survey several months after any changes to the service might well be a useful way of monitoring customer satisfaction, as long as it has high visibility to all those affected. (Paragraph 51)

12. The Administration Committee identifies the need for customer surveys to gauge performance and to help the Refreshment Department understand the dynamics of demand for its services, and if the supply fits. We agree. However, it is important to guard against 'survey fatigue', and the consequent danger that users of the services may not be forthcoming in taking part in feedback programmes. The Refreshment Department proposes to experiment with the use of various surveying techniques, particularly those that require minimum action or effort on the part of the customer. Examples of such simple survey techniques might be:

• 'push pads', which register satisfaction or dissatisfaction by linking to a basic computer programme or counter. This system does, however, have a high initial capital outlay compared to other simple systems.
• 'ball drops' or 'tray drops', which involve customers being asked to drop a set of small balls into a satisfied or dissatisfied container, or clearing their tray to a 'happy' or 'sad' clearing station.
• inviting customers to leave brief anonymous messages at a pre-determined point in the Cafeteria, or by calling a free-phone number from their mobile, House phone or office to comment.

13. The key drawback to all these methods is the likelihood of only negative comments being recorded. They must, therefore, be supplemented by anecdotal evidence compiled by a strong management and supervisory presence on the floor during service, interacting with customers to measure satisfaction and noting how much food and of what type is returned on plates. Periodic formal surveys are necessary to compile detailed feedback about customer satisfaction and to identify future requirements, and we agree that the Refreshment Department should continue with its plans to conduct a comprehensive customer survey in 2006-07, as it generally does once in the lifetime of each Parliament.

14. The Refreshment Department proposes to replace its RD User Group, which does not include Member representation, with a focus group of volunteers from all sectors of the Department's customers. The Administration Committee may wish to be represented on this group. The focus group would have a more structured agenda than the RD User Group and would meet regularly to consider specific aspects of the catering service (eg food quality, queuing, signage, etc). The views of this group would assist the Department in benchmarking and developing its services. We support this initiative.

15. In addition a user survey of all House services is to be conducted in 2007 and this will provide an update on service performance since the last such survey in 2003. Options for monitoring the views of Members and their staff on a more frequent basis in future are to be investigated.

Productivity

Committee Recommendation 9

We recommend that a productivity review of the Refreshment Department should be carried out once a strategy for the Department has been agreed to see if structural and operational changes would help it to reach its targets more efficiently. (Paragraph 52)

16. Structural reviews were carried out by the Refreshment Department as part of its response to the Finance and Services Committee's review of the catering subsidy. We agree that it would now be appropriate to consider whether the adjustments to staffing have been successful in achieving the Department's financial targets without detriment to the quality of service, or whether further changes would improve its efficiency. This process should precede the development of a long-term strategy, as business demands are certain to change over a relatively short period. For this reason, the review should not be a single, one-off event, but should be a continuing focus for effective management of the Department.

17. Whilst we are proud of the comparatively low levels of staff turnover in the Refreshment Department, we acknowledge that this causes a set of issues that have to be managed. In particular, it is understandable that staff who have been carrying out the same job for many years, without exposure to new ways of doing things, may find it difficult to adjust when changes are implemented. Management recognise this difficulty and are focussed on the task of encouraging and stimulating change in a positive way. This includes adoption of a more coaching and mentoring style of training and development where appropriate, and more integration with the wider industry—either through short-term work experience in other organisations or through staff of other organisations being invited to work alongside our staff as part of a structured learning programme.

18. A significant factor in overall productivity levels is the balance between the use of bought-in food products and in-house production. This is something that will be examined by the new Executive Chef, when appointed.

Purchasing

Committee Recommendation 10

We recommend that the Refreshment Department should investigate whether cost and labour efficiencies could be achieved by reducing the number of suppliers used. Given the difficulties of delivery to the Palace of Westminster and the constraints on storage on-site, and in the context of an ongoing study of the options for off-site security clearance of delivery vehicles, we further recommend that the Department should consider options for transferring some of its delivery operations off-site, for subsequent onward delivery to the Palace by a sole operator. (Paragraph 55)

19. The Refreshment Department is actively working towards the reduction of the number of suppliers used and is studying the options for off-site clearance of delivery vehicles to reduce the number of deliveries coming into the Estate. There may be scope also to review the way orders are placed and suppliers allocated to restrict the number of deliveries on a daily basis.

20. The Department recognises the inherent cost incurred by retaining multiple suppliers for key commodities, but balances this against the risk of incomplete orders and of higher prices being charged if there is no on-going element of competition. This is particularly the case for the purchase of perishable foods, where market prices change on a daily basis and the potential for a sole supplier to load prices is high. The diversity of the Refreshment Department's operations requires it to source a wide variety of products for sale, multiplying the number of suppliers retained. Over a third of the Department's suppliers, for example, are small, specialist artisans and small businesses supplying bespoke souvenirs to the House of Commons; it would be very difficult to significantly reduce this range of souvenir suppliers and maintain the diversity and quality of products sold in the souvenir shops.

21. It does not necessarily follow that labour efficiencies would be achieved if fewer suppliers were used, as the same processes would still have to be completed for the ordering, receipt and distribution of goods. There may be some potential to reduce the resource required to check and process invoices, but the primary benefit would be the freeing-up of staff time to undertake operational audits and cost analysis to help improve business performance.

Benchmarking

Committee Recommendation 11

Benchmarking with the private sector as well as the public sector is essential to ensure quality of service. We recommend that the Department benchmark its services strategically and consistently against catering businesses elsewhere, including against high street venues that customers might use in preference to its own facilities. Benchmarking reports should be considered every six months as part of the Department's strategy. The Department might benefit from the use of an independent benchmarking service. Staff at all levels within the Department should be involved in this benchmarking exercise. (Paragraph 57)

22. We agree that detailed and effective benchmarking is crucial to inform the development of catering services, and an initial exercise should therefore precede the development of the Department's long-term strategy.

23. Benchmarking of key performance indicators should not simply focus on financial performance, but must include operational assessments of the product, service, signage and price. Benchmarking should be used to determine where the Refreshment Department is now in relation to other, similar foodservice operations—particularly those that are contractor-operated. It must also include comparison with best-in-class commercial high-street operators, as these are often the benchmark competitors being used by Refreshment Department customers.

24. Selecting appropriate benchmark partners and gaining access to their performance indicators can only be achieved through detailed knowledge of the market. The Refreshment Department has neither the expertise nor the resources to undertake this work without expert assistance. Refreshment Department staff will also need training in order to measure performance in their own areas. A budget will need to be established for this, but in advance of testing the market, it is impossible to accurately estimate the amount of consultancy work that would be required. Based on average consultancy rates, we are advised that a sum of up to £20,000 may be required to develop and implement a comprehensive benchmarking regime. For this order of cost, we would expect to receive a comprehensive range of benchmarking surveys, to include:

i.  Competition Surveys: Who is operating locally? When are they open and busy? What do they sell? What is their signage like?

ii.  Service time surveys: Specifically timing customers joining a queue to placing their order and walking away with their completed order.

iii.  Price Surveys: For a selected basket of products, how much are local competitors charging? Products must be like-for-like; for example, coffee cup sizes must be comparable.

iv.  Product comparison assessments: The purchasing of similar product from a range of competitors. A tuna sandwich, for example, would be purchased from a number of stores and 'dissected' to consider each component—bread, filling quality, and packaging, and compared with the sandwich offered in the Refreshment Department's outlets.

25. No provision for this expenditure has been made in the Refreshment Department's budget for 2006-07 and this would have to be funded from the central reserve. Costs in future years may impact on the Refreshment Department's subsidy position, although it is hoped that the investment would pay for itself as performance improvements are achieved.

Opening hours

Committee Recommendation 12

Given the limited additional cost involved and the apparent demand for such a service, we recommend that the Refreshment Department should provide a limited service in either the Terrace Cafeteria or the Despatch box until 5.30pm in August 2006 on a trial basis to assess demand (Paragraph 64)

26. The Terrace Cafeteria remained open until 5.30 pm during the Easter Recess on a trial basis. No increase in staff costs was required to provide this service as rosters could be adapted to the longer opening times. Business levels were highest between 3.30pm and 4.30pm, averaging 60 covers per day during this period. Most customers were purchasing beverages and confectionery or tea cakes at an average spend per transaction of £1.00. During the last hour of service business levels dropped, averaging 35 covers at an average spend per transaction of £0.75. The customer base was a cross section of office-based staff and security personnel.

27. The Refreshment Department intends to repeat this trial during the forthcoming Spring recess and in August 2006 to assess whether demand increases as customers become more familiar with the extended hours. The outcome of the trial will then be reviewed and discussed with the Committee.

COMMITTEE RECOMMENDATION 13

We recommend that the Refreshment Department should review the opening hours of facilities that are underused at certain times, such as the service in the Members' Tea Room on non-sitting Fridays, and should consider a reduced service, in terms of menu, staff or space, if there would be a cost benefit of doing so. (Paragraph 66)

28. This recommendation is consistent with the on-going approach taken by Refreshment Department management to constantly review service uptake, making adjustments to opening hours, staffing levels, service levels or recommending changes to access regulations as appropriate. It is through this approach that staff numbers in the Refreshment Department have gradually been reduced over a period when business levels have significantly increased.

29. For example, a more detailed analysis of activity levels in the Members' Tea Room is in progress. There is obvious scope to reduce the service provision on non-sitting Fridays, when business levels are as much as 80 per cent less than on sitting Fridays. Even if this did not directly lead to reduced staff costs, it would deliver benefits by freeing staff to attend training and development opportunities, or to cover for staff in other areas scheduled to participate in training. We would not expect the Members' Tea Room to be used for other purposes on non-sitting Fridays.

30. In addition to the possibility of staff reductions, such reviews can increase the potential for generating additional income by using the facility in a different way (eg for banqueting) or by opening to a wider group of users (i.e. by reviewing the access regulations). However, it must be recognised that this strategy is not without risk. If the business of the House is abnormally high, placing unusual demands on a service that is being operated by minimum staff or has been opened to other customers, it can be very difficult to provide services suddenly needed for Members. This was clearly demonstrated last year when the House sat through the Thursday night and throughout the Friday on 10/11 March 2005; staff rostered to work Monday to Thursday only were unavailable for duty on a Friday, and venues such as the Members' Dining Room had been hired out for private events, which it was not possible for organisers to cancel given the short notice. The staff of the Refreshment Department coped admirably under the circumstances, but the operation was under great strain and the Department's ability to meet the needs of Members was severely compromised.

Palace dining rooms

Committee Recommendation 14

We consider that the time is right to change the style of service in the Members' and Strangers' Dining Rooms. Our preference would be for a brasserie-style restaurant, with a simple menu changed on a regular basis, possibly supplemented by a high-quality buffet. Similar changes have been made at venues such as the Members' restaurant at the RAC City Clubhouse. If carried out tastefully and in keeping with the heritage of the environment of the Palace, this would have a number of benefits. The simpler menus and service style should improve food quality and speed of delivery, and should also in the longer term free resources front of house and in the kitchens, some of which might go towards improving quality, some towards more attractive pricing, and some towards reducing the subsidy. (Paragraph 73)

31. The Refreshment Department concurs with the Administration Committee's opinion, which reflects the modern trend towards less formal dining already seen in Portcullis House. Work has tentatively commenced to consider options for the future style of food and service to be offered in the Members' and Strangers' Dining Rooms, but is awaiting appointment of the new Executive Chef, who must play a crucial role in the modernisation of these services.

32. Once the detailed service requirement has been defined and agreed with Members, a staff skills specification and complement requirement can be developed, and a staff training programme, including visits to establishments identified as offering the type of food and service wanted for the Members' and Strangers' Dining Rooms, will be devised.

COMMITTEE RECOMMENDATION 15

We recommend that the Churchill Room should offer a simple but excellent quality grill room menu. We understand that this change should not be complicated or expensive to implement. (Paragraph 74)

33. We agree that this change can be implemented relatively easily and without major expenditure, particularly given that the kitchen is due for some equipment renewals this year. However, to successfully change the ambience of the room, it will be necessary to undertake some redecoration. The Refreshment Department is liaising with the Parliamentary Estates Directorate with a view to completing this during the Summer Recess 2006.

COMMITTEE RECOMMENDATION 16

We look forward to discussing with the House authorities how they envisage taking forward our proposals for improving offerings in the dining rooms in the Palace and expect to examine sample menus and draft timescales for conversation in the coming months. (Paragraph 75)

34. The Refreshment Department intends to report to the Committee on options for changes to the services in the Palace dining rooms before the end of the year.

35. Detailed consultation with Members will be required in order to gain a consensus of their views about the detailed service requirement of the dining rooms. A focus group will need to be set up as proposed in the response to recommendation 8, except that this group should be predominantly made up of Members. Membership should be drawn from a cross-section of volunteers, and should include representatives who rarely use the existing services. The role of the focus group will be to assist the Refreshment Department in defining the service requirement and to identify what changes might be required to the equipment and fabric of the room. It is hoped that the Administration Committee will take a keen interest in the work of this focus group.

COMMITTEE RECOMMENDATION 17

The effect on usage of implementing the changes to the Palace dining rooms that we have recommended needs to become apparent before any changes to the access regulations for these facilities should be considered. (Paragraph 77)

36. We agree that a settling-in period of any service level changes is necessary before access to the dining rooms is reviewed. This will also enable the impact of changes to the House of Lords refreshment facilities to be taken into account. The Churchill Room is an area where we would wish in due course to look at the access restrictions, but before we do so decisions must be reached about the longer term replacement of the Terrace Pavilion (see recommendation 20) and the potential for re-organising the Palace refreshment facilities (see recommendation 40).

Banqueting

Committee Recommendation 18

We recommend that the banqueting service offered by the House should be benchmarked against the offerings of competitors at an early opportunity to ensure that customers' preferences are being catered for as effectively as possible. (Paragraph 78)

37. Our earlier responses to the Committee's recommendations on strategy and innovation, performance monitoring through structured customer surveys, productivity and benchmarking apply equally to the banqueting service. The importance of the banqueting service to the Refreshment Department's finances make it vital that this service is reviewed and developed alongside the department's other services and within the development of its overall strategic plan.

Members' Tea Room

Committee Recommendation 19

We recommend that the Tea Room should remain substantially as it is, but that its menu should be reviewed with an eye to improving the quality of the cold counter, introducing a counter for a limited range of hot food to be served within the Tea Room, and increasing the extent to which dishes can be prepared and plated within the Tea Room itself. (Paragraph 80)

38. It must be acknowledged that the scope for preparation of food in the Tea Room itself is severely constrained by the heritage importance of this area, and by the physical size and inconvenient layouts of its two small pantry areas—located as they are at opposite sides of the room. However, an initial estimate from Parliamentary Works Services for undertaking changes to the servery area that would enhance provision of cold foods and improve layout is in the order of £60,000. Subject to the development and approval of a business case to support this level of expenditure, it is expected that funds can be made available this year. However, unless the work can be scheduled into the summer works programme for 2006 at relatively short notice, it may prove difficult to complete the work without closing the Tea Room during session time. If this is unacceptable, the project will be scheduled for summer 2007.

Terrace Marquee

Committee Recommendation 20

We recommend that the Parliamentary Estates Directorate prepare options for a replacement for the Terrace Marquee with indicative costs for our further consideration. (Paragraph 81)

39. The need for replacement of the Terrace Pavilion has been identified, but at present this is not costed within the Estate's Works Programme. An options study is due to be commissioned this year to commence the process for considering the future of the Terrace Pavilion. There are difficult issues to resolve. The Pavilion was originally installed on the basis that it would be a temporary structure erected during summer months only. Over time, along with its neighbour for the House of Lords, it has become more of a year round fixture, as its annual removal from Christmas until Easter cost (in mid-1990's prices) in the region of £40,000 p.a. and invariably led to damage to the fabric or equipment. From dialogue with Westminster City Council (WCC) and English Heritage (EH), we understand that no notification was given for this extended use.

40. It is apparent that the current pavilion is not liked by the planning and conservation authorities. The frontage of the Palace of Westminster to the River Thames is of great importance and is a well-known image around the world. Any permanent structure, even if acceptable in principle, would have to be of exemplary quality, attracting, as it would, a lot of attention by conservation/pressure groups and the press alike. Any replacement Terrace structure will naturally have to be co-ordinated with that of the House of Lords. With this comes the subsequent complexity of achieving agreement between both Houses.

41. The lightweight un-insulated fabric of the existing pavilion is not energy efficient and any future structure would need to address both this problem and the issue of fire risk to the Palace. Close co-ordination would also be needed with the project to repair the cast iron roofs along the riverfront, as this may require scaffolding to be erected up the external façade.

42. All of the above points indicate that planning for a replacement to the Terrace Pavilion is likely to involve a lengthy consultation period and the cost of any replacement structure is likely to be high.

Bars

Committee Recommendation 21

We recommend that the any Refreshment Department longer-term plans for the relocation of facilities within the Palace should include looking for alternative locations for the Strangers' Bar which would allow it to realise greater potential. External advice should be sought on location and design. (Paragraph 82)

43. There are limited options for relocation of the Strangers' Bar given the constraints on space in the Palace. Bearing in mind the Bar's present location, it would make sense if the options study for replacement of the Terrace Pavilion includes this point.

COMMITTEE RECOMMENDATION 22

We recommend that detailed consideration be given to options for introducing sandwiches and other light pre-packaged snacks into the Strangers' Bar. (Paragraph 83)

44. Although there are severe space constraints in the Strangers' Bar, the Refreshment Department hopes to offer sandwiches on a trial basis soon after the Whitsun Recess. One option would be to offer freshly made-to-order sandwiches, prepared in the kitchens, over the peak hours of 12.30-3.00 pm and 5.30-9.30 pm. This would have the advantage of not requiring refrigerated display equipment to be installed, thus not taking up precious counter-top space, but has the disadvantage of customers having to wait whilst the sandwich is prepared. If take-up is high, the waiting times for sandwich orders may become unacceptable. Therefore, the Department's preferred solution is to source equipment that would enable sandwiches and other chilled snacks to be displayed in the bar itself, with the intention that the equipment could be leased or rented over the trial period so that sales levels for such an addition to services could be measured and monitored. A search for suitable equipment is in progress.

COMMITTEE RECOMMENDATION 23

We recommend no change to the Smoking Room. (Paragraph 84)

45. Minor works are planned to the bar in the Members' Smoking Room to improve the efficiency of the storage and serving area. These works should not alter the overall layout and ambiance of the room. It is anticipated that the issue of smoking in the catering outlets, including the Smoking Room, will have to be reviewed in the near future. A separate paper on this issue will be submitted to the Administration Committee in due course.

COMMITTEE RECOMMENDATION 24

We recommend that Annie's Bar should be closed, and the pool table suitably relocated. Options should then be put to us for alternative uses of the space. (Paragraph 85)

46. Annie's Bar ceased trading on the rise of the House for the Easter Recess, but the room will remain open for access to the pool table pending agreement on its relocation. Options for the alternative use of this space must be considered within the context of the strategic development of the Refreshment Department's services in the Palace.

Cafeterias

Committee Recommendation 25

We recommend that the Refreshment Department should seek to improve the quality and freshness of sandwiches and salads served in the cafeterias. (Paragraph 87)

47. The only cafeteria with the facility for made-to-order sandwiches is the Portcullis Cafeteria in 7 Millbank. This service is very popular and despite long queues at peak lunchtimes, customer feedback consistently praises this facility. There is no space in other cafeterias to replicate this service without losing other elements of the existing food offer. The redevelopment of the servery counters in the Terrace Cafeteria (see recommendation 34) may provide such an opportunity, but given the constraints of space in this venue, it is unlikely that this could be achieved without further overcrowding this service. It would therefore be preferable identify a suitable space for a separate sandwich and snack facility specifically designed to target the 'grab and go' market. This must be considered as part of the strategic options for the re-organisation of the Palace refreshment facilities.

48. Most contractor-operated catering establishments supplement made-to-order sandwich facilities with pre-packed sandwiches made daily on site to maximise freshness and quality. Not only does the Refreshment Department not have space for made-to-order sandwich bars in its existing facilities, it has no space in its kitchens to prepare its own pre-packed sandwiches on site. Consequently, the Department must rely on the use of bought-in sandwiches. This impairs both quality and availability. In the short-term, management believe that the sale of pre-packed sandwiches would be improved by reducing the range stocked and reducing the number of suppliers used in order to focus on a core range of products. For example, on a recent day in March, 41 product lines were offered in the Debate. This provides customers with choice, but inevitably slows the purchase decision. We are advised that 'best-in-class' high-street sandwich bar chains stock considerably fewer lines, typically no more than 30.

49. Salads in all cafeterias except the Debate are offered from self-service salad bars, whereas most contractor-operated foodservice facilities offer a combination of self-service and pre-packed salads to help reduce queuing. The Refreshment Department will examine the potential to follow suit. We note, however, that while the use of pre-packed salads can significantly increase the speed of customer throughput, it also increases the amount of waste packaging materials—most of which are food-contaminated and so unsuitable for recycling. This conflicts with our desire to increase the recycling of waste and a sensible balance between these objectives must be reached.

COMMITTEE RECOMMENDATION 26

We recommend that the Refreshment Department should ensure that pricing in its outlets is based on a consistent model and does not act as an artificial disincentive to the purchase of healthier food and drink. We further recommend that the Department should examine the feasibility of providing foods to meet special requirements such as gluten-free, kosher and halal diets. (Paragraph 89)

50. The Refreshment Department believes that its pricing does follow a consistent model that reflects both wholesale prices and prices charged by comparators. There is a specific issue with fresh food products (eg fruit and milk), which are liable to VAT when sold in a catering outlet, but not when sold by a retail outlet. Matching shop prices for these items would add to the subsidy.

51. The Refreshment Department has commenced work to improve awareness of the benefits of healthy eating and the special needs of customers suffering from food allergies in general and gluten-intolerance in particular. Recent initiatives include specific training to increase staff awareness of food intolerances, sourcing of a wider range of wheat-free and gluten-free foods, and introduction of a pilot scheme to label wheat-free or gluten-free dishes on the menus in the Terrace Cafeteria.

52. Catering for customers with strict religious dietary requirements is more problematic. Both kosher and halal food require separate preparation as well as the purchasing of suitable foods; for strict religious observance this can only be achieved by having separate kitchen facilities and separate equipment for the preparation of kosher or halal foods. This could only be achieved if one of the Department's venues was specifically designated for this purpose and appropriately qualified chefs engaged. We do not believe that this is a viable option, even in the medium term, and recommend that the Refreshment Department continues to cater for requests for strict kosher or halal meals by buying them in from approved suppliers.

COMMITTEE RECOMMENDATION 27

We welcome the introduction of a pilot recycling scheme in the cafeterias, and look forward to this being rolled out as swiftly as possible to outlets across the Parliamentary Estate. (Paragraph 90)

53. The pilot recycling schemes have now been in operation outside the Terrace Cafeteria and in the Portcullis House atrium since mid-February. Initial problems with the frequency and timing of emptying the bins seem to have been solved and customer usage of the scheme is slowly increasing. Plans for the extension of the scheme to the Portcullis Cafeteria in 7 Millbank and Bellamy's in 1 Parliament Street are well-advanced.

COMMITTEE RECOMMENDATION 28

The most effective way of increasing the popularity of Bellamy's will be to ensure that standards of food and service—and pricing—compare favourably with other venues on the Estate. We recommend that the Refreshment Department should continue their proactive approach to promoting Bellamy's cafeteria in 1 Parliament Street. (Paragraph 101)

54. It is the Refreshment Department's strategic intention to continue to develop services in 1 Parliament Street to draw away volume from the overcrowded facilities in Portcullis House and, to a lesser extent, from the Terrace Cafeteria. The modernisation of the Press catering facilities next year should also assist in this respect.

COMMITTEE RECOMMENDATION 29

We recommend that the Refreshment Department erect clearly visible signage outside all outlets indicating the appropriate access rules and showing sample passes for the avoidance of doubt. (Paragraph 104)

55. The Refreshment Department recognises the need for clear signage, prominently positioned and well lit, but there are significant heritage constraints on the form and positioning of signage, particularly in the Palace. The Department will continue to work with the Parliamentary Estates Directorate to improve signage systems on an incremental basis. In some areas, particularly the outbuildings, we believe that it may be possible to use more innovative signage and information boards, for example by mounting flat screens showing the day's menu and displaying any specific message to be communicated. This could include information about queuing times in alternative venues.

COMMITTEE RECOMMENDATION 30

We recommend that the Refreshment Department make available through the Pass Office to new pass holders on arrival a simple guide to the rules on access to its facilities, as well as electronically on the Parliamentary Intranet. (Paragraph 105)

56. The booklet setting out details of the Services of the Refreshment Department, originally developed as information for new Members, is being updated to ensure that it is suitable as guidance to all pass holders. In the meantime, the existing booklet is already available with the Serjeant at Arm's information pamphlets, and is issued as part of induction training for all new House of Commons staff. The Refreshment Department will ensure that the Pass Office has adequate stocks of the booklet for issue to new pass holders. The Department will also continue to prominently display this information on its intranet site.

COMMITTEE RECOMMENDATION 31

We recommend that a designated member of staff should be posted outside the Debate and Terrace cafeterias at lunchtimes on Mondays to Wednesdays for two weeks running and then at regular intervals afterwards, tasked with controlling access and advising pass holders of the regulations. (Paragraph 106)

57. There have recently been particular problems with enforcing the access regulations as a result of the temporary closure of the Jubilee Cafeteria in connection with the works in Westminster Hall. This has been partly alleviated by additional signage outside the Debate cafeteria reminding customers of the regulations.

58. Refreshment Department management is most needed to provide a strong presence in the department's venues during busy periods. The policing of access to the Debate and Terrace cafeterias is therefore most cost-effectively done by posting security officers outside their entrances, even if this requires extra resource that has to be recharged by the Metropolitan Police Service and adds to the catering subsidy.

COMMITTEE RECOMMENDATION 32

We recommend that civil servants should only have access to the House's catering facilities when on specific parliamentary business, and that they should be required to obtain special passes to enable them to have this access. (Paragraph 108)

59. Most passes held by civil servants are temporary Category 17 yellow passes. In addition, a number of day passes are issued to civil servants attending parliamentary business. In recent years efforts have been made to reduce the number of civil servants holding such temporary passes. Only officials with a demonstrable and regular requirement to come to work in the Palace should receive such passes. Temporary pass-holders are not allowed to use the Terrace or Debate cafeterias at lunchtime, or to bring in guests at any time. There are also a small number of civil servants with full passes, for whom the House is their principal or only place of work, or who need to be able to bring in visitors.

60. The tighter enforcement of access rules as recommended by the Committee should ensure that the existing rules are being observed. Furthermore, the attention of civil servants holding temporary passes has been drawn to the Committee's strongly-expressed view that they should not be making any use of the House's catering facilities unless they are attending business in the House or its committees and have no time to eat elsewhere (see also response to Recommendation 30).

61. A regime of special passes for civil servants to use catering facilities as envisaged by the Committee would require a House official to be available throughout the parliamentary day to issue such passes. Further staff effort would have to be devoted to ensuring that civil servant passholders seeking to use catering facilities held such a special pass. It would thus be both expensive to administer and difficult to enforce. However, if tighter controls and the reminders issued to civil servants do not have the desired effect, or if there is evidence of abuse, further consideration will be given to a regime of special passes as recommended by the Committee.

COMMITTEE RECOMMENDATION 33

We recommend that temporary works contractors should not be allowed to use the Terrace Cafeteria, and should be advised of the alternatives available to them. (Paragraph 109)

62. The Committee's recommendation refers to "temporary works contractors", and is understood to be directed primarily at those contractors' staff working during the summer in the main building for whom mobile canteens are generally provided. The Committee also notes that it does not wish "to restrict the access enjoyed by longer-term contractors' staff working in the House". It is understood that the Committee's main concern relates to contractors staff making heavy use of the Terrace Cafeteria for morning meals during the summer recess. At present the practicable alternatives open to these staff are limited.

63. Contractors' staff working in the main building for the Parliamentary Works Services Directorate (PWSD) and Parliamentary Estates Directorate (PED) currently receive a temporary Category 26 pass. This is colour coded blue; some other temporary contractors' staff such as cleaners and Post Office staff have a separate category of pass. The standard Category 26 pass does not currently allow use of the Terrace Cafeteria between 12 noon and 2.00 pm, but it does permit use at other times, in particular in the mornings for breakfast.

64. It would, as the Committee acknowledges, be difficult within the current pass system to enforce any differentiation in permitted access between "temporary works contractors" and "longer-term contractors' staff working in the House". Category 26 passholders in the latter category include a number of staff working throughout the year for contractors under long-term contract to PWSD or PED, such as furniture removal staff or refrigeration engineers.

65. In response to the Committee's recommendation and the concerns expressed in its Report, Mr Speaker has agreed, on an interim basis, and with effect from 26 July 2006 to 6 October 2006, to an extension of the current period of exclusion of temporary works contractors' staff from use of the Terrace Cafeteria, to run from 10.30 to 14.30. The effects will be monitored and reported to the Administration Committee. Steps will also be taken to ensure that temporary works contractors' staff are made fully aware of the rules, and of the standards of dress and behaviour expected. The authorities will also explore the possibility of providing a fuller mobile canteen service, and will discuss with the Lords authorities the prospects of that House providing some comparable service.

COMMITTEE RECOMMENDATION 34

We recommend that the redesign and refurbishment of the Terrace Cafeteria servery area should be an early priority for the Refreshment Department and that external advice should be sought on this redesign, incorporating best practice from providers of similar facilities elsewhere. (Paragraph 110)

66. We welcome this recommendation. It is 10 years since the last refurbishment and discussions have already commenced between the Refreshment Department and the Parliamentary Estates Directorate. Subject to preparation and approval of the business case for the required investment, and subject to the timetable for other planned works, it is hoped that the work could be completed in the summer of 2007.

COMMITTEE RECOMMENDATION 35

We recommend that all full pass holders be allowed to use Bellamy's Clubroom and that in the longer term the use of the Clubroom and the gift kiosk in 1 Parliament Street should be reconsidered. (Paragraph 112)

67. With the agreement of Mr Speaker, access to Bellamy's Clubroom has been open to all full pass-holders since the return of the House in April 2006.

68. The gift kiosk in 1 Parliament Street, which closed in December 2003 as part of the review of services to reduce the catering subsidy, will be included in plans for proposed alterations and redecoration of the first floor corridor area in 1 Parliament Street in summer 2007. A strategy for the future development of this area was commissioned some time ago, as part of the development of plans for the refurbishment of Bellamy's Cafeteria. The favoured proposal is to redevelop Bellamy's lobby area to provide a coffee bar along the lines of the Despatch box, which would enable tea and coffee provision to be taken out of the cafeteria; this would reduce congestion at peak times and increase table turnover rates, thus increasing the handling capacity of Bellamy's Cafeteria. Detailed plans will be brought to the Administration Committee for comment in due course.

Press Gallery facilities

Committee Recommendation 36

We recommend that the Press Gallery Cafeteria should be made available to all full pass holders as soon as possible, but that only those categories of pass holder currently permitted to use it should be allowed to bring guests. (Paragraph 117)

69. The Committee recommends that full pass-holders should be allowed to use the Press Gallery Cafeteria "as soon as possible". The Committee notes at paragraph 118 that it is minded to consider access to the new Press Gallery café-bar and dining facilities once plans for refurbishment have become clear.

70. The cafeteria will only be maintained in its current form until July 2006, when it will be closed for the first phase of refurbishment of Press Gallery accommodation and catering facilities. Only a limited cafeteria service will be available between October 2006 and July 2007, relying upon a temporary kitchen to be installed over the summer months. This may prove insufficient to support the potentially significant increase in the level of usage which could arise from opening the cafeteria to all pass-holders.

71. Mr Speaker has therefore agreed, with the consent of the Press Gallery, that all full pass-holders will be able to use the new cafeteria facilities in the Press Gallery which will be open from October 2007, with the proviso that only those categories of pass-holders currently permitted to use it should be allowed to bring in guests. Mr Speaker will await further advice from the Administration Committee before reaching a decision on access to the café-bar facility. Use of the re-provided dining facilities will remain as at present, subject to further advice thereon from the Administration Committee.

COMMITTEE RECOMMENDATION 37

The monthly press lunch is a valued event which needs to be able to continue, but it is scarcely justification for the continued running at public expense of a separate dining facility for the press. (Paragraph 120)

72. Since publication of the Administration Committee's report, plans have been approved for the modernisation of the Press catering facilities. The agreed scheme provides a flexible and multi-purpose restaurant facility, which is predominantly self-service but with some waiter-service tables. The Press Gallery has accepted that both these facilities will close in order to accommodate their monthly lunches. The bar is to be re-located and designed as an all-day snack bar and meeting space as well as providing a bar facility.

COMMITTEE RECOMMENDATION 38

It is vital that the catering facilities that emerge after the Press Gallery refurbishment should be provided at a significantly lower level of subsidy than those that exist at the moment, and that the business case for their provision at this expense should be capable of standing up to detailed public scrutiny. A refurbishment press gallery should not contain a separate press dining room. (Paragraph 124)

73. The detailed business case for this project has not yet been approved, but the net cost of operating the new facilities is estimated to be significantly less than the current cost. We believe the new services represent good value for money, with the potential for the subsidy to be reduced even further when access to the self-service restaurant is made available to all staff.

Retail outlets

Committee Recommendation 39

We recommend that the range and pricing of retail items sold on behalf of the House should be subject to benchmarking and that there should be internal and external review of the range of products available. (Paragraph 124)

74. Our previous comments about benchmarking (recommendation 11) apply equally to the souvenir outlets.

Reorganisation of Palace facilities

Committee Recommendation 40

We recommend that the Refreshment Department's strategy should have a longer-term perspective, and that the Department should bring suggestions to us for ways in which its accommodation might usefully be reconfigured. (Paragraph 125)

75. We agree, and any recommendations for the re-organisation of the Palace refreshment facilities will be included in the development of the Refreshment Department's strategic plan.

Looking outside the House

Committee Recommendation 41

We recommend that the Refreshment Departments in the Lords and Commons formally share information on the usage of their catering facilities and their selling prices on a regular and recurrent basis. (Paragraph 127)

76. The House of Lords Refreshment Committee has yet to discuss this proposal.

COMMITTEE RECOMMENDATION 42

We recommend that the purchasing authorities of both Houses continue to consider which areas would benefit from joint procurement in the future. We expect the House of Commons Refreshment Department to explore further joint working with its Lords counterparts. (Paragraph 130)

77. The Refreshment Departments of both Houses continue to liaise closely when planning their procurement timetables, and consider the potential benefits of joint procurement for each and every contract tendered by either House. Generally, this has proven to improve purchasing effectiveness through the negotiation of better prices for greater volumes, through the sharing of procurement expertise and resources, and through reducing the number of deliveries requiring access the Parliamentary Estate.

COMMITTEE RECOMMENDATION 43

We recommend that the Refreshment Department should identify reasons why parts or all of its operations should not be successfully contracted out in order to deliver a better quality of service and value for money, and bring suggestions to us by the end of October as to how this might be achieved on a pilot or permanent basis. (Paragraph 132)

78. A move to outsourcing part or all of the catering facilities would be a major strategic decision and, once taken, there would be no easy way of reverting back to an in-house operation.

79. In any move to outsource a service, major issues need to be considered. The Refreshment Department's foodservice operation is complex and the in-house team has extensive experience and knowledge of the House's needs. An incoming contractor would obviously seek to exploit this knowledge and would 'inherit' staff through TUPE regulations. Contractors taking over public sector contracts have often sought to refresh the offer by gradually moving long-service staff to other areas of their business and replacing them with staff more attuned to their corporate ethos and objectives. This brings with it the risk that key knowledge and experience of the unique demands and pressures of the House will be lost. It is also a matter of significant concern to the staff of the Department, who are deeply loyal and committed to the House's objectives without the distraction of having to balance these against the objectives of their employer.

80. An incoming contractor would only be interested in taking on the business if there was deemed to be sufficient scope for profitability within the operation. While in the short-term a contractor would be able to exploit any inefficiencies that it was able to identify in the current operation, the need to maintain profitability might in time lead to compromise on service levels (assuming that the House retained control over pricing). There is no such conflict when the service is provided in-house. As we have learned through recent experience with cleaning, outsourcing a service can bring a new set of problems such as loss of control over terms and conditions, and public sector experience demonstrates that outsourcing does not always deliver the desired improvements.

81. Finally, if the objective of outsourcing is to improve performance levels, there is no reason why the in-house structure could not address any inefficiencies identified by benchmarking or closer scrutiny of existing practices.

82. Given the above, the Commission confirms that it has no plans at present to consider contracting out Refreshment Department services. It does not therefore consider it appropriate that suggestions as to how contracting out part or all of the Refreshment Department operations might be achieved on a pilot or permanent basis should be brought to the Administration Committee.

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Prepared 6 June 2006