House of Commons - Administration

Select Committee on Administration Second Report

5 CONSTRAINTS

28. There are certain constraints faced by the Refreshment Department that do not normally apply to commercial organisations outside the House. These constraints need to be properly understood before considering how improvements might be made to the Department's services.

Money

29. 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. The Refreshment Department has told us that they are aware of a perception amongst their customers that since the subsidy review the choice and quality of food and service has diminished, particularly in some of the outlets most frequented by Members: the Members' Dining Room; the Members' Tea Room and the Terrace Cafeteria.[22] One of the key questions we seek to address during this inquiry is whether the measures implemented by the RD have improved efficiency or cut costs at the expense of quality of service. 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.

30. As we have seen, proposals from the Catering Committee for new services failed to make progress after the subsidy review because of the extra costs that they would have incurred. We accept that the cost of any proposal for a new facility, or for change in use of an existing outlet that we might recommend, needs to be justified in terms of strategic objectives and demand.

31. Demand for services is heavily affected by the parliamentary timetable. When the House is not sitting, revenue from most venues declines significantly along with the number of transactions. 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.

32. It is difficult for the RD to adjust its staffing levels to match fluctuating demand, and it would be unreasonable to expect payroll costs as a proportion of turnover to diminish to a level comparable with a commercial operation. As a matter of fact, the number of staff employed by the Department has reduced over the last ten years from 344 to fewer than 300, and there may be scope for further rationalisation over time. Matching human resources to demand is an ongoing challenge for Refreshment Department management.

Heritage environment

33. The Refreshment Department faces a challenge in providing a complex service based in a palace which is a Grade 1 listed building and also a UNESCO World Heritage Site.[23] Whilst providing a setting of grandeur and historical significance for banqueting events, the layout and fabric of the building place limitations on the RD's operations and on the scope for development. Space is at a premium. In addition, listed building consent is necessary for significant structural changes to the building and this process increases the cost of any changes and the length of time for completion of projects. On-site storage, particularly in the Palace, is cramped and inconveniently located, increasing the number of staff required to receive and distribute products.

Security

34. The need for security-cleared catering staff within the Parliamentary Estate is a complication for the Refreshment Department when it attempts to adjust staffing levels to the peaks and troughs of demand. The Department employs permanent full-time staff with relatively little use of agency staff brought in to meet fluctuating demand.

35. The need to maintain security also restricts the timing of deliveries to the Palace. These limited delivery times are inconvenient for suppliers and for the Department and they affect the Department's negotiating position when seeking to maximise its purchasing power.

36. Security constraints also limit the Department's customer base. As there is only one facility which non-passholders may use unaccompanied (the Jubilee Café), the RD has little scope for bringing in custom from non-passholders. The Department does, however, seem to be making better use of its potential customer base, recording over 8,000 transactions a day: a significant increase over the 7,000 transactions a day reported in 2001-02.[24]

Service obligation

37. The RD is obliged to provide a service to core users at times of limited demand when a commercial operation might close its doors. The Department told us that the Members' Dining Room is a "particularly difficult service to operate both efficiently and cost-effectively" as business levels can fluctuate from fewer than 20 Members to 150 Members leaving their meals for the division bell and then all returning at the same time to resume dining.[25]

Unpredictability

38. In addition to the problems posed by the parliamentary timetable,[26] the Department finds it difficult to predict customer numbers accurately. The Business Statement and the Order Paper are a clue to the likely demands of Members, House staff and civil servants when the House is sitting, but an unexpected statement or change of business can alter demand significantly. There is no straightforward way to estimate the number of Members' staff on-site at any one time. Demand for services during recess has also been difficult for the Department to predict. This uncertainty led to a tendency to estimate demand at maximum levels so as to avoid inadequate supply when demand unexpectedly increased. The Refreshment Department has told us that following the subsidy review it has attempted to reach a balance between the tendency to estimate demand at maximum levels and scaling back service capability (in particular staffing levels) to a level based on average demand.[27]

Resistance to change

39. In the past influential Members have been strongly in favour of retaining the labour-intensive traditional dining room style of table service despite increasing opinion amongst other Members that the menus and style are outdated. This resistance has made it difficult for the Refreshment Department to introduce change and has encouraged a defensive institutional culture.

40. In addition, evidence suggests that there is resistance to change among some Refreshment Department staff, particularly those of long service working in the more formal outlets, who take pride in their role. In order to achieve more flexible staffing based on actual business requirements, the Refreshment Department aims to employ multi-skilled staff in all outlets, but progress in some areas appears to be slow.[28]

22 Ev 22 Back

23 A number of the other buildings on the Parliamentary Estate are also listed. The only other listed building in which the RD has a presence is 1 Parliament Street, which is listed Grade II. Back

24 Catering Committee, Refreshment Facilities in the House of Commons, para 5 Back

25 Ev 21 Back

26 See paragraph 31 Back

27 Ev 21 Back

28 Ev 36 Back