Catering Services in the House of Commons

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE    To be published as HC 560-v

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Administration Committee

CaterinG Services in the House of Commons  

Monday 13 December 2010

Hamish Cook

Oliver Peyton

Evidence heard in  Public Questions  214 - 268

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the  Administration Committee

on  Monday 13 December 2010

Members present:

Sir Alan Haselhurst (Chair)

Geoffrey Clifton-Brown

Thomas Docherty

Mr Mark Francois

Nigel Mills

Sarah Newton

Bob Russell

Mr John Spellar

Mr Shaleish Vara

Mr Dave Watts 

________________

Examination of Witnesses

Witness: Hamish Cook, Chief Executive and Managing Directors’ Representative International, Spotless Group, gave evidence.

Q214 Chair : Good afternoon, Mr Cook. Thank you very much indeed for coming to see us. I gather you may have recently arrived back. Is that correct?

Hamish Cook: I had a few days in Australia a couple of weeks ago.

Q215 Chair : Thank you very much indeed for making time in your no doubt crowded diary to be with us. You have had some understanding of what we are trying to do here: to try to make some sense of the catering facilities. You’ve had some experience of how they do it in both Australia and New Zealand, which I think is going to be of particular relevance to us. Would you like to start by making any general observations?

Hamish Cook: Thank you very much. As outlined in my profile, I’ve been employed by the Australian facilities services company Spotless for the last 22 years. My roles with Spotless have certainly focused my attention on the outsourced catering industry and service markets in Australia and New Zealand and, more recently, in the United Kingdom. I commenced with Spotless in the late 1980s, working in fine dining restaurants within the arts and cultural centre, and also within corporate Australia. Since then, I’ve spent time in senior management and executive roles, overseeing businesses in Australia, New Zealand and, more recently, internationally.

The vast majority of my time has been spent working in commercial, business and industry, education and age care markets, and working with corporate clients as well as government clients at all levels of government in Australia and New Zealand. During my time with Spotless, I have had small roles with Spotless consulting to the Parliament of Australia, when they outsourced their catering in the early 1990s, and more recently I’ve been part of our project team that was involved in retendering for the New Zealand Parliament business a couple of years ago. I have some experience in those environments, and I’ve certainly looked at other government catering services that have been in house and outsourced at a state level within Australia.

Having researched the scope of your inquiry, I feel the relevant parts of my experience would be the management and outsourcing of staff function, retail and tourrelated activities, because I’ve had experience in Australia and New Zealand in those areas. My experience in assisting corporate and government clients, reducing catering subsidies and working on projects to do that in large complex environments would also be relevant to the team here. Whilst my comments today reflect my experience working at Spotless, they will be related to myself and personal views, as opposed to those of Spotless. Obviously you will understand that some of the requirements of contracts with clients will limit what I can say about the specifics of some arrangements with our clients in Australia. Thank you.

Q216 Chair : Thank you very much indeed. Presumably every parliament building these days has to be regarded as needing special protection, and the more one opens the doors to members of the public, the more there is a security aspect to it. Given that that is a fundamental issue for an organisation that is operating perhaps between 30 and 35 weeks a year as an active sitting parliament, do you think there is any golden rule as to whether it is better to have an inhouse arrangement or to outsource the catering facilities?

Hamish Cook: For a successful inhouse or a successful outsourced arrangement, the key is for the inhouse team or the outsourced team to clearly understand what the security requirements are. Our large corporate clients, our large government or nongovernment clients, all have security concerns, whether that is because of intellectual property requirements, or whether it is because they work in sensitive areas themselves. It’s about the relationship that an outsourced provider has with the organisation, and understanding what the rules are regarding access to and egress from those properties.

Q217 Chair : So you think it could be done either way?

Hamish Cook: It could be done either way, definitely.

Q218 Bob Russell: I wonder if I could follow up your question because the briefing we were given says: "Mr Cook was part of the team responsible for delivering the catering services to the Parliament of Australia and the New Zealand Parliament. Both Parliaments outsource their catering services." Was part of your briefing the fact that security was a consideration, and was that security anything like the security we have here?

Hamish Cook: When I was involved in outsourcing for the Australian Parliament, which was in the early 1990s, security was certainly a factor. Staff, whether they’re in house or our employees, all need to go through appropriate security checks. That’s just a process that needs to be managed and it needs to be in line with anybody coming into this environment.

Q219 Bob Russell: So it’s not an insurmountable problem?

Hamish Cook: Definitely not.

Q220 Mr Watts: Hamish, did your work in the Australian Parliament mean that parts of the parliamentary building were off limits and some were not, so that the public was directed a certain way? Was there a need to secure certain parts but not others?

Hamish Cook: I think I would struggle to answer that regarding what’s going on in the Australian Parliament now, but certainly, having been a recent visitor with my daughter to the Australian Parliament, there are public areas and there are areas that are quite clearly out of bounds.

Q221 Geoffrey Clifton-Brown: Absolute figures are not going to mean a lot to us, but could you say in both the New Zealand case and the Australian case what percentage saving they made from switching from an inhouse operation to an outsourced operation, and would you expect the same percentage savings to be made here or can you see that there are factors over here that are different?

Hamish Cook: I’m probably not in a position to answer that question, because I’m not privy to the exact pre and post figures.

Q222 Geoffrey Clifton-Brown: What percentage savings would you expect might be applicable here?

Hamish Cook: I don’t know because I’m not privy to your current financial arrangements.

Q223 Nigel Mills: Perhaps we can try to get at the same thing in a different way. You said that you have experience of reducing catering subsidies in complex organisations. What do you think are the key things you need to do to achieve that?

Hamish Cook: The initial starting point with any cost management project is, certainly, clearly understanding what it is you want to achieve. In catering activity, there are generally different customer bases that have different expectations and needs. That may be staff; it may be executives; it may be function users. Whether it’s a corporate client or a government client, it doesn’t really matter. You need to understand what has to occur in each of those functions. It may be that you want to subsidise your staff dining. It may be that you want to run a commercial function business, because the only alternative is to go outside, and you may want to offset subsidies in those instances. It’s very clearly about understanding what you want to achieve at the outset.

Once you get into a project to reduce costs, it’s then working out, if I look at staff dining, what you want to subsidise as an organisation. Many organisations that we work with these days are very happy to subsidise main meals and food that is produced on site. They don’t want to be seen to be subsidising retail items like bottles of Coke and chocolate bars. Therefore they will have a different pricing structure in those instances, and it’s managing that. For executives that may have a different requirement and a need, because they work late and have meetings outside of work, you can provide a different level of service again, and there may well be no cost or cost transfer to recognise that. The cost is providing the service.

If I look at government institutions-parliaments and the like-I think you’d be saying that the Members would have a requirement and it would be expected that you would have a subsidy in those environments. Staff may have a subsidy, but the subsidy may relate to the fact that there’s no rent charged for that space, and the prices are therefore discounted by the equivalent of what you may pay as rent on the high street. You may want to run a function business that generates income to offset those subsidies for those other two parts of your business.

Q224 Nigel Mills: Do you recall whether the Australian or New Zealand Parliaments allowed people to pick and choose which outlet they went to? Here we have subsidised outlets for staff, but also you can take in visitors and use them in some situations. Would you envisage, generally, that you would be trying to restrict some outlets for some uses and some for other uses? Would you recommend continuing that kind of crossuse?

Hamish Cook: You need to clearly define the purpose for each outlet. There is not necessarily a requirement to limit who can go to some outlets. You may decide that staff can’t go to where the Members dine, but there should be nothing to stop Members or guests, general public excluded, going to the staff cafeteria because that’s where they want to dine. What you want to do is make sure that people clearly understand the main purpose for that outlet and understand that the menu is for that purpose, not necessarily trying to make sure that every outlet offers every range of food.

Q225 Chair : How easy is it? I can remember more clearly the geography of the federal Parliament in Australia in relation to the rest of Canberra. I’ve only been to the present New Zealand Parliament on one occasion and I can’t just now recall how close other outlets were to it. One of the problems we have here is that Members, if they are not facing an imminent vote, can very easily reach outlets of different kinds and that takes away business. Are Australia and New Zealand in your experience slightly different, because it’s not quite so easy to get out of the building? Therefore, there is a better footfall.

Hamish Cook: Australia, as you know, is quite removed from other retail outlets, so it’s probably a car journey or a bus journey to go to local competition. From where the New Zealand Parliament is located, in downtown Wellington, it’s very easy to get to other retail outlets.

Q226 Chair : In the New Zealand Parliament then, do they fill, or get a satisfactory level of takeup in, their dining rooms?

Hamish Cook: I haven’t seen the most recent figures there, but my understanding from my colleagues in New Zealand is they get good usage, yes.

Q227 Chair : Here one of the difficulties seems to be that the business of the House can vary, even from night to night, with a dramatic effect upon the numbers of people who come in. I just wonder from an outsourcing point of view whether anyone contemplating making a bid to provide those services could overcome some of those handicaps, when you can’t necessarily substitute a different type of trade to fill the empty tables.

Hamish Cook: Like operating any catering service, knowledge about custom, practice and what goes on is crucial for success, for instance, in the sporting arenas in which we operate. You build up that knowledge over a period of time, and therefore manage the business accordingly.

Q228 Mr Watts: I think I take from you, Hamish, that the first thing you would think that needs to be done is to identify what is the purpose of every cost centre and it’s important that you have the information about what that cost centre costs, including any central costs that are determined. That’s where you should start.

Hamish Cook: That’s where you should start.

Q229 Mr Watts: As has just been said, the very difficult thing we have is that sometimes it’s busy and sometimes there’s nobody there. Is that going to put off anyone who is a contractor, because he or she does not know the level of revenue that is going to be derived from each of those outlets?

Hamish Cook: I think the contract catering industry or the outsourcing industry have a level of understanding on how to operate staff facilities, and that would be driven by total staff numbers available. They would know how to run a retail outlet that is open to visitors, based on the number of visitors that you measure coming through the facilities on an annual basis. I think the challenge would be the Members’ dining area, because it is driven by changes in House sittings and Government business. Once again, that would be manageable over time, because I imagine that there are trends in how the House sits and how the business performs over a period of time.

Q230 Geoffrey Clifton-Brown: It obviously takes time to get to know how a new business works. In Australia and New Zealand, what was the length of contract?

Hamish Cook: The process in Australia was that they went through a consultancy process, I imagine similar to what you’re currently doing, for about a sixmonth intensive period. The business was then put to a formal tender and was let on a fiveyear basis initially.

Geoffrey Clifton-Brown: Five years?

Hamish Cook: Yes.

Q231 Geoffrey Clifton-Brown: Was it for all catering services, including for example shops? Did it include a range of services?

Hamish Cook: The initial contract that we operated there included the staff cafeterias, the retail outlets open to the public, the Members’ dining room and Parliament services to Members’ offices and the like, and then the function and special event business that went alongside that.

Q232 Geoffrey Clifton-Brown: Presumably there were special remits for special restaurants, Members’ restaurants or whatever. What was the general basis of charging allowed?

Hamish Cook: I just can’t remember that. It was on a per head basis.

Q233 Geoffrey Clifton-Brown: It impinges on the Chairman’s question. Was your general level of services at, above or below what could be obtained if you could get a taxi ride or a bus ride elsewhere? It’s very easy to put the prices up and make a huge profit, but then you’re going to drive everybody out and they’ll go elsewhere.

Hamish Cook: It was some time ago; I can’t remember.

Q234 Geoffrey Clifton-Brown: What was the basis for dealing with complaints? It’s all very well outsourcing but, if you’re going to get a lousy service, how was that dealt with?

Hamish Cook: I might talk about how, in the outsourcing arrangements, we would generally deal with complaints and/or feedback from customers. There are shortterm complaints regarding quality of food, quality of service that need to be addressed at the point of service, because that’s the only time we could fix something like that. There is then contractual performance, which is best managed in a meeting forum on a regular basis, whether that be weekly, monthly or quarterly, with our clients. That is based around key performance indicators or criteria that are set when the contract is set up, and then regularly reviewed to make sure that they are still current. Some of those KPIs might be around food service, customer service; they may be around food quality. It may be around the transparency of the relationship and the responsiveness of the relationship managers or team providing the services back to a committee or client.

Q235 Geoffrey Clifton-Brown: Was all your food prepared fresh or was some of it prepared elsewhere and brought into the estate?

Hamish Cook: These days the contract catering industry relies on a combination of readytoeat or readytocook food that’s prepared off site, and that may mean that you procure great curries from a particular provider because they are specialists there, and then you will cook them on site, prepare them on site and present them in a professional way. It may be that you get some of your pastries and bakery items off site, but then you will prepare a range of products-main courses, daily specials-on site as well. It’s a combination of both.

Q236 Bob Russell: Who employs the staff in the Australian and New Zealand Parliaments now they’ve been outsourced? Who is their employer?

Hamish Cook: The contract provider.

Q237 Bob Russell: When they were outsourced, did they inherit staff from the respective Parliaments or were those people made redundant and new people came in?

Hamish Cook: In the Australian Parliament, which we took on from the inhouse operation, we took over a range of people; we didn’t take over all people. Some were made redundant or redeployed when we went through that process. In New Zealand, we took over from another outsource provider.

Q238 Bob Russell: The reason I ask that question is that, having been involved in local government, where grounds maintenance and whatever were taken over by one outsourcing company and they took on the staff, with what we call in this country TUPE arrangements, and then another contractor in four or five years’ time takes over, and the staff get passed around as if they are commodities rather than human beings.

Hamish Cook: That comes down to the maturity of the outsourced organisation. We would like to think, when we take over employees, that they get treated as our longstanding employees. In our organisation, we would recognise their service from the commencement of service at that location, not just their commencement with our organisation.

Q239 Bob Russell: This is hypothetical at the moment obviously but, if that did happen here, there would be no loss of benefits, length of service and so on, if there was a contractingout.

Hamish Cook: The TUPE requirements would indicate that that has to continue.

Q240 Chair : How long have the outsourcing arrangements existed in Australia and New Zealand?

Hamish Cook: I’m not sure about New Zealand. Australia outsourced their catering in Parliament House in the early 1990s.

Q241 Chair : Presumably from the fact that that is still going, although maybe not necessarily with the same contractor, the Members of Parliament, as well as other users, have been broadly satisfied.

Hamish Cook: Yes.

Q242 Chair : The contractors must have been as well. For all the disadvantages of trying to operate within a building that does not have a constant attendance, the contractor has been able to come to an arrangement that is sufficiently profitable for it to be worth doing.

Hamish Cook: Yes, I would assume as much.

Q243 Chair : So what we see as the obstacles here, in your experience, can be overcome?

Hamish Cook: Definitely.

Q244 Nigel Mills: When you’re trying to reduce subsidies, in what sort of cost areas generally do you expect to find the easiest savings that you can bring into play to meet your new budget? Is it procurement or staffing levels or is it income generation that you look for?

Hamish Cook: The art in going through a subsidy reduction project is to look at the supply chain, and by that I mean look at what items could be more effectively produced off site, rather than on site. It is certainly looking at the opening hours and the services offered in each outlet. There needs to be a review of what each outlet exists for. There needs to be a review of what outlets are open at what times of the day for what types of service. There should be no expectation that every outlet is open from daybreak until the close of business. When you clearly understand how people behave in this environment, where they want to go and how long they’re going to be working here, you can put together a picture and make some recommendations to refine what’s going on, but I would suspect that there would be labour savings and there would be efficiency savings in food production by going off site.

Q245 Mr Watts: I don’t know if you’ve had a chance to study the commercial and event revenue from this place. In a professional view, if the security issues could be resolved and the surplus time that this place is empty could be maximised, do you think that there’s a major opportunity to actually reduce the overall subsidy?

Hamish Cook: I haven’t seen the financial figures here so it would be somewhat hard to make a comment on that. We as an organisation operate in large town hall and government facilities, where there are local councils or city councils that have requirements to block off facilities for various times of the year. It’s about understanding when the rooms are available and understanding the rules around booking functions. You could definitely run an effective function or event business in this environment. It may not operate 365 days a year; it may only operate 150 days of the year, but you could generate income out of that.

Q246 Mr Watts: In comparison to other facilities that you run, how attractive would this be as a proposition?

Hamish Cook: I’ve only walked through the main entry. However, the facilities are impressive. The history associated with this, I would imagine, would be very easy to sell.

Q247 Chair : As a contractor to a parliament, did you have any kind of interface with your customers through, say, a committee like this one, which has the responsibility for services to Members, or was your interface directly with them as customers, be they Members of Parliament, be they staffers or whoever?

Hamish Cook: There is a businesstocustomer interface every time they come into a restaurant or book a function. There is that level of relationship that goes on, and I think that’s where you need to hear feedback immediately about the service that’s provided. My only comment about the senior relationship would be that, if there is going to be an outsourced arrangement, there need to be senior people who are managing that process to start with and ongoing to ensure that every stakeholder is effectively heard and issues can be dealt with quickly and effectively.

Q248 Chair : Is there an inevitable drive by a contractor to try to ensure that you are making the most money from the assets of the building you’re operating in, bearing in mind that you could probably charge more for banqueting functions involving members of the public who are coming in to enjoy the particular venue and so on? Is it inevitably the case that banqueting will start to edge in much more?

Hamish Cook: I think the relationship between a contractor and the client needs to be open and transparent. Both parties need to clearly understand why the service exists and what the desire for revenue growth is. Decisions should be made together rather than just the caterer trying to maximise revenue themselves. Our organisation would generally work very closely and in a transparent manner with our clients, and provide them with the information regarding revenue and, in many instances, costs, so that our clients can make decisions with us that benefit the longterm sustainability of the business.

Chair : Thank you very much indeed. We greatly appreciate your coming to see us.

Examination of Witnesses

Witness:  Oliver Peyton, Chairman, Peyton and Byrne, gave evidence.

Q249 Chair : Good afternoon , Mr Peyton, and thank you very much indeed for stepping into the breach to come and give us the benefit of your experience. You will have heard from the previous exchanges some of the thoughts that are going around us at the present time, as we try to make sense of the catering service s in this place in the 21 st c entury . Is there anything you would like to say , first of all , by way of opening , on the basis of either your experience or what you ha ve just been hearing ?

Oliver Peyton: It’s a mixture of things. I think you can look at the ebbs and flows of any business-if you’re talking about the Members, when they’re around, when they’re not around. For example, personally, I operate businesses that go from £10,000 to £175,000 a week. In some of the places I operate, it’ll be sunny one moment and snowing the next. Any commercial operator has to factor in the realities of how any business operates. That’s why we’re in business. In terms of what I heard lastly about the commercial exploitation of the building for events, I’m on the list of Lancaster House. The problem with Lancaster House is it has to be kept at short notice for Government activities.

If you’re looking to explore the concept of using the building for more commercial activities, one should start looking at the narrow windows when Members are not around, when the building is not being used. By and large, commercial operators for events will want to use the space at the same time as Members want to, because people go on holiday. There are probably narrow windows, given that you seem to take slightly longer holidays than everybody else, where you could try it out, where you could say, "The building is closed; let’s give it three days where it could be used for commercial activities." Dip your toes in the water and see how that goes.

I think any space can be made secure. It all depends on the cost and how much people are willing to pay. If you have a few days available to rent out this building, I guess there’d be a super premium involved in that, and lots of people would want to do that, particularly companies that would want to impress people from abroad. Obviously there’s a super premium involved in holding an event here, so it might work out quite well just to dip your feet in the water.

I come from the opposite end of the spectrum about food, in the sense that we make all our food every day, so we have our oncentre kitchen; we make our bread; we don’t start making our sandwiches until the bread arrives from our kitchen. Everything’s fresh every day. I believe that, in the place that I operate, it is my responsibility to compete with the high street because, in most of the places I operate, there’s a choice whether to eat in the National Gallery or in the park. We’re just about to start in the Royal Academy. The Royal Academy is located in one of the most commercially aggressive restaurant neighbourhoods in the world. My job is to compete against those people, whilst still giving people a cup of tea and a bun, or a bottle of champagne.

I think it’s very important that in this country we start to demonstrate how great the produce of the country is. We have relationships with farms where they only rear the beef for us. We rear White Park beef, which is the oldest indigenous beef in Britain. We don’t use consolidators; we buy from virtually all our suppliers direct, so we know who the farmer is. We try not even to use wholesalers. I am completely against consolidation in purchasing food. I think a place like this should be showing the way forward for the country. It’s a shop window for people coming to visit the country. It’s a shop window for the people you represent throughout the country. I think we are on the cusp of greatness in terms of food production in this country, and we have to step up to the mark and support them.

One of the things that I’m personally interested in-a slight aside but an important factor in putting down how I feel-is that every British embassy I visit abroad only serves the food from their country, like in France or America. We don’t have British food available in foreign embassies. To me, one of the greatest commercial opportunities is to sell British food in our embassies. Why wouldn’t you want to do that? I am a bell ringer for commercialisation and a shop window for what we do. The Italians do it; the Spanish do it; the French do it all the time. We are at least as good as those. The journey that British food has made in such a short period of time is just amazing, and we need to be showing it off. That’s my take on it.

Q250 Chair : How attractive would this place be, do you think, to an outside contractor, if we could get over some of the difficulties associated with the fact that it is a Royal Palace? We would have to ensure that permissions were granted for certain types of exploitation of the facilities. We’ve also got a difficulty whereby the pattern of business of the House is not constant. It falls off quite sharply midweek, as the demands of constituency have grown over the years. Also there are a considerable amount of repairs that have to be done to this building, which might make it at times not as hospitable to people coming in for an outside function and so on. All that said, would you still believe that there is a very good case to be made for outsourcing, which would attract some great interest?

Oliver Peyton: It is a crown jewel, so any operator including myself would be strongly interested in operating in this building, because of what it is. Also, in terms of the sector that I’m in, most people operate on around 30% margins. I think one of the things people were trying to get at before is the labour costs, and certainly in the sector that I’m in, they are around 30%. Give or take 2 or 3%, that’s about what we would expect to pay, in terms of percentage. I think you were trying to get a handle on that earlier. I think that’s an important thing to say. The industry average varies between 28% and 32%, depending on certain factors.

Q251 Mr Watts: Oliver, you were talking about your passion for fresh food and locally sourced food. How does that compare to massproduced boughtin products? Is it a lot more expensive to do what you do?

Oliver Peyton: No. I think it’s a bit of a fallacy that to have fresh food is more expensive than boughtin food. When you’re flying turkey roll from Turkmenistan or wherever it’s coming from, there’s an inherent cost to that. My opinion, and I know this to be a fact, is that any food that is produced locally is cheaper to get to us than from Turkmenistan or wherever it’s coming from. It’s just the way it is. I really don’t subscribe to that at all.

Q252 Mr Watts: It could be cheaper.

Oliver Peyton: Sure. Also it’s important to say that, when it comes to staff facilities, like the British Library, last year we increased the turnover in the public space by 23% when we took it over. This is what I would consider to be people who are readers, students and everybody else. When you give people what they want at the right price, whatever the parameters are about it, they will come back. People have a choice now. People in Britain are more concerned about food; they’re more concerned about their diet; they’re more concerned about how they live. If you’re in a building like this and you’re surrounded by places outside you can go to, where it’s perceived as better value, you’re just going to do it if it’s on your doorstep. I think the job is to compete with the outside world.

Q253 Mr Watts: Can I just ask you about management costs? Our structure seems to be managerially based. Is that something that is common within the catering industry or do you try, as an organisation, to push down costs?

Oliver Peyton: The pie is a certain size. I say this all the time. You see what the turnover is; you look at the different intricacies of the business and you work out how, in an open way, you operate the business. You have to remember that Britain comes from a culture of not really having very highquality catering management systems in place, if you know what I mean. There aren’t the high-end catering management colleges to back it up. A lot of it’s been higgledy piggledy. What operators like the people you’ve been seeing bring to the table is their own sense of commerciality. I have yet to see a case where that isn’t substantially better than what happens in house. We wouldn’t exist if you were better, if that makes sense, because we have the desire and the passion to do this, and we want to do it. That’s just the way it is. I think that’s the best way to describe it.

Q254 Thomas Docherty: First of all, can I thank you for bringing Absolut to this country? On a more important point, you mentioned the issue of super premium; I’m assuming perhaps a superpremium price comes attached that you would be able to charge. You’re probably aware that at the moment the House is often made available to charities and other organisations on fixed budgets, for launching campaigns and raising awareness, and Members sponsor that. If we did go down the route of a superpremium brand, how do you balance that desire to raise revenue while making the House available to organisations that perhaps can’t afford to pay super premiums?

Oliver Peyton: I think that’s extremely easy, because you basically have different levels of offer. That’s a nobrainer. You wouldn’t want to offer the same thing to people who were trying to raise awareness or a charity as you would to people who want to show off their company or their awards or whatever. It’s very common that one is doing what I would call fixedprice catering and premium catering in the same building.

Q255 Thomas Docherty: Following on from Dave’s point about costings, and Sir Alan’s point, would you be surprised that we seem to operate a fixed level of staffing, effectively throughout the week, and that our costs are also worked out on the basis of days that we aren’t open? Is that normal practice, in your experience?

Oliver Peyton: No. For example, in a venue like, let us say, Inn the Park around the corner, during the winter the turnover plummets to a shocking level and we would tend to move those people into our other venues. We have a fluidity of people so that, as it gets quieter, we’re already starting to move them around. We would never allow ourselves to be in a situation where you have people being paid for keeping a space empty. It’s just not the real world.

Q256 Geoffrey Clifton-Brown: Returning to your charging mechanisms, if you’re going to charge a super premium, presumably for visitors’ restaurants-

Oliver Peyton: I was talking about events predominantly.

Q257 Geoffrey Clifton-Brown: What basis of charging would you adopt overall?

Oliver Peyton: I can’t say that. For example in the Wallace Collection, where I operate, they charge essentially £15,000 to get in for the evening. It depends on the level of what you’re offering, how many people come through the door, what it’s for. If you’re asking me what the rental price would be, I can’t say until you give me a certain set of parameters. You’ve also got to look at the cost to the business of opening: how much the security is going to cost, what the surrounding costs are.

Q258 Geoffrey Clifton-Brown: To return to my previous question to the previous witness, if you put the prices up too much-it’s very easy to put the prices up -you end up emptying the restaurants. With the other venues that you run, are your prices in line with what you can obtain nearby? How would they compare?

Oliver Peyton: There are two things here. If we’re talking about restaurants and events, they are two completely different things.

Geoffrey Clifton-Brown: Separate the two.

Oliver Peyton: In some places we operate, we have a tariff or a minimum. We have key products like, say, egg and cress, cup of tea, soup that the client wants to be priced and we have no problem with that. In many of the venues we operate I think the reason we’re successful is that we cater to lots of different pockets. We cater from a cup of tea and a bun to royalty or to people having bottles of champagne. That’s our job. For example in the British Library, we will do staff catering, inhouse catering, public catering, events, everything. It’s a mixture. I think that’s the difference when you have commercial operators. They will look at each venue; they will work out what’s best for it, who are the sort of people who should be working there, how it wants to be perceived and they will market it and develop it on that basis. What you don’t want is to have empty spaces. The point is: if you’re empty, you’re wrong.

Q259 Geoffrey Clifton-Brown: If we let this out to you or somebody else, what mechanisms do you operate in your other venues for complaints, adherence to the contract and quality standards?

Oliver Peyton: You have KPIs. In terms of complaints, it depends on what the vehicle for complaints is. Depending on the size of the site, the complaints could go directly to the general manager and they would deal with them personally. On a personal level, I get a consolidated complaint list every week, so that I can see what’s happening. You can always tell, if there are a lot of complaints, that something’s up, so I like to see them. On our new website, you can feed back to me. That starts up at the end of January, so that people can email me directly. I think it depends. Sometimes, particularly when you take over a venue, you tend to get a lot of complaints because nobody likes change. Change is difficult, so you tend to get a lot more feedback right at the beginning. Some of it is correct and you have to listen to it. Some of it is change. On an ongoing basis, we deal with every complaint; our policy is to respond within 24 hours, and have dealt with it within a working week.

Q260 Bob Russell: I’m quite attracted to the National Café at the National Gallery. Is that for staff, visitors or a mixture of the two?

Oliver Peyton: It caters for the public and it’s open at night.

Q261 Bob Russell: Is the price structure there the same for employees as well as visitors?

Oliver Peyton: In the case of the National Gallery, we give a discount of 25% to staff at all the outlets. There is a staff area, which we don’t deal with, but generally speaking staff use our facilities and they get a 25% discount, but that varies between venues.

Q262 Bob Russell: The reason I ask that is there are 650 Members of Parliament, but a large proportion of people here, I think about 10,000 people, are low paid. I was just wondering how would you gear the pricing or whether you would have different establishments, which were structured separately?

Oliver Peyton: That’s not a question for me, but I can tell you some of the different solutions. I don’t know the details of how that would operate, but I can tell you that in some venues we operate subsidised staff restaurants, where there are allowances of between £2.50 or £3.50 per meal.

Bob Russell: Purely for staff?

Oliver Peyton: Purely for staff, yes. In some of the venues where there are no staff facilities, they will get a variety from 25% upwards in terms of discount. That is my favourite policy actually, because you’re guaranteeing the staff the same quality as the public is getting. It’s not always technically possible to do either. The discount varies depending on the relationship between the staff and the client.

Q263 Chair : Do you think it would be workable to have groups that wished to be segregated from others? There would be certain places in a parliament where Members would regard themselves as having sole access-mindful of what Mr Russell said about the needs of staff whose salary levels are different.

Oliver Peyton: In some of the venues we operate, there are private dining facilities, where obviously staff don’t go. It’s just a matter of sorting out where people are allowed to go. What I tend to find is that, in some of the venues we operate that have a staff discount-because we operate in different places-we say to the staff, if there are large queues, or if it is a busy period, please try to order before or afterwards; and people do that. It’s about relationships. In a lot of the venues we operate in, everyone wants to get on, so there’s a willingness to get on. I’m against segregating staff catering. I think it tends to go towards lower quality. I think it’s better to give staff discounts in the spaces where it’s possible to give them a discount.

Q264 Chair : Of an evening, Members probably do want to be able to eat privately and there will be, for example, questions as to whether or not we have a restaurant to which the press had greater access. Members might fear eavesdropping.

Oliver Peyton: I don’t think that’s ever going to happen, is it?

Q265 Chair : There may even be Members segregated from each other, in the sense that Members of one party might prefer to be on their own. It does happen if you want to be conspiring together, discussing issues and so on, but it leads to inefficiency. This is the thing I’m getting at. If you have several different outlets that have a different purpose and the numbers, by a certain time of day or certain day of the week, have begun to dwindle considerably, this puts a waste factor into it, which would be very disturbing to someone who’s looking at it on a purely commercial basis.

Oliver Peyton: That’s the way you operate now. You can’t assume that a commercial operator will feel the same about it, because a commercial operator will look at the peaks when they’re going to make money, and the troughs when they’re going to have to control their costs better. That’s what we do; that’s our job. I run Kew Gardens, for example. I have, on many days down there during the inclement weather, more staff than customers. That’s just how it is. During the summer it’s chock-a-block.

I was listening to what you were saying when Hamish was speaking. People always put up obstacles as to why you should or shouldn’t do this. I think a commercial operator is going to come in; he’s going to work with you to deliver the solutions you need, I’m sure to a higher quality and to a better service level than you currently have, because it’s the nature of the beast. It’s in our blood. We want to serve people and we want to be hospitable and convivial and do the best thing. Your choices should be made around that. We operate in a completely different world. I don’t think you have to worry about troughs. When you sit down and give a brief to people, they will, as I would, be very well aware of the pitfalls in any period when it’s operating. We will understand what needs to be done at the quieter times to keep the client happy and to deliver the service level that we have agreed, so that when it’s busy we’re making our money.

Q266 Nigel Mills: I’m just going to ask a quick question. How do you achieve the staff discount? Is that by swipe card, recognition or what?

Oliver Peyton: There’s a myriad of opportunities out there, but currently it’s almost all on identification. In restaurants, they have a cashless system. There’s a myriad of different things around.

Q267 Nigel Mills: Presumably it’s quite easy just to make sure you’re not having staff buying discounted meals for people who shouldn’t have discounted meals.

Oliver Peyton: I think that tends to happen in places where there are bad things happening. In most places we operate, we try to make sure we operate on a basis of good behaviour, because we don’t have bad relations with any client. We just don’t. For example, we will always try to do some extra things for staff if they want it. In most of the places we operate, the staff are ambassadors for us as well. They are helping us to get customers and keep customers happy.

Q268 Thomas Docherty: I’m loath to put you on the spot here, but there has been a bit of debate about the idea that we could make some of the House of Commons brand available over the internet or in gift shops. With your experience of brand value and so on, do you think there’s a danger that the brand becomes diluted if all the produce is available online. Do you think there’s an element that you’d want to keep some things available only from the Commons, or do you think that’s a bit oldfashioned?

Oliver Peyton: I have been the recipient of some House of Commons gifts in the past. I think there is a luxury value to not having it available on the internet mostly. I think the product range should be a lot more commercial and a lot more diverse than it currently is. My opinion is that no visitor to the building should leave without some little trinket or souvenir of their visit to one of the most famous buildings in the world, but I wouldn’t put it on the internet. With Kew for example we have developed a range called Food for Kew, which is just starting to retail in the shops, from chocolate bars to tea, jams and lots of different things.

I am really a very big fan. I remember the New York Fire Department had a T-shirt for many years, saying "keep 200 yards back". It was very popular in London. In one year alone, the New York Fire Department sold $23 million worth of those Tshirts out of the store in LaFayette. This is preinternet days. Selling the umbrella and all the other things that visitors would want to buy is a great idea. Obviously they’re not very well represented at the moment. We would commercialise food outlets so, if people are buying a sandwich or a coffee, we would also have on display the branded products, so there’s a much greater purchasing opportunity.

Chair : Thank you very much, Mr Peyton. We appreciate your giving up your time to be with us. We shall weigh up the evidence you’ve given us as we prepare our report.

Oliver Peyton: A weighty task.

Chair : Thank you very much indeed.