2 Rationale for the Decision
Restructuring the Identity and
Passport Service
7. In written evidence, the Home Office argued for
the need to restructure the Identity and Passport Service (IPS)
because of excess capacity in its application processing and interview
office networks. It claimed that current and planned improvements
in productivity and efficiency would mean that by 2012, the IPS
would have:
- Excess
staff capacity of around 350 full time equivalents and excess
physical capacity of approximately 25% across [its] application
processing estate;
- Excess
staff capacity of around 150 full time equivalents and 39 local
offices across [its] Interview Office Network.[3]
8. In its submission to the Minister on 13 September
2010, the IPS commented that there were two reasons for the apparent
'overcapacity' in terms of staffing and estates: the cancellation
of the National Identity Service (NIS) programme (that is to say
the "identity card" system legislated for by Parliament
at the instigation of the previous administration and repealed
at the instigation of the new government); and operational improvements.
The Home Office explained that the introduction of a new passport
application system would represent "a net reduction in the
cost of services to IPS of £17.6 million":
The additional functionality provided by this system
will allow IPS to change the way customer applications and telephone
queries are handled and deliver more services online; which together
will result in productivity gains equivalent to 129 Full-Time
Equivalents (FTE).[4]
9. In order to make the proposed savings, the Home
Office stated that it was necessary to close a passport application
processing centre and reduce the number of interview offices.
The IPS had undertaken "an analysis based on criteria which
included cost, affordability, estates, people, customers and partners,
performance and operational feasibility".[5]
The analysis noted that:
Consideration was given to the respective weightings
of the criteria but these were ultimately given equal weights,
as varying the weightings made no discernible impact on the outcome
of the analysis.[6]
We conclude therefore that no weight was given to
the status of the Newport Office as the only passport office within
the Welsh nation, or to the consequence of closing the office
on the economy of the region.
10. The Public and Commercial Services Union (PCS),
the civil service trade union, questioned the reasons set out
by the IPS for the closure of the Newport regional office and
the criteria used. It commented that the Newport Office had had
little involvement in the Identity Card programme and "we
see no reason to argue that the cancellation of the NIS [National
Identity Scheme] leads to the conclusion that there are too many
staff working at IPS and that therefore Newport must close".[7]
The Union also took issue with the fact that operational improvements
would lead to excess capacity:
... to our knowledge, the new passport processing
system is very much a work in progress, indeed in inception and
[...] very few customers currently use the on-line channel […]
If the systems are not in place by the end of 2011 to deliver
the operational improvements the organisation envisages, IPS will
then be under- capacity ...[8]
PCS continued that:
... the proposals depend in part on future operational
improvements to be gained from the introduction of new technology,
much of the information in the submission about the savings to
be made from the Newport closure are pure guesswork, in the absence
of any certainty about the robustness of future operating systems.[9]
11. PCS described the Government's decision as a
"short-term cost-cutting exercise".[10]
Paul McGoay, IPS Group President for PCS claimed that the IPS
had a history of making such decisions, which they then had to
reverse. He cited two examples: the 1999 "major passport
crisis" when the IPS service had not been able to handle
a backlog of applications due to the failure of a new IT system
and a lack of staff; and the decision in 2008 to remove the passport
application processing centre from the Glasgow Passport Office.[11]
In highlighting the reasons for why the decision had to be reversed,
Mr McGoay described how:
Over the last couple of years, [IPS] have had to
put postal production back into the Glasgow site, utilising the
remaining staff there. That has had a detrimental effect on the
service because it has meant that they have had to shut down the
main counter in Glasgow at least two days a week in the peak periods
to bring the counter staff back to examine the postal work.[12]
He concluded:
We were told at the time in 2008 that Glasgow would
never have postal work again. So they have a history of short
term, knee-jerk decisions.[13]
12. We
have some evidence that the Identity and Passport Service has
made decisions in the past that have come to be seen with hindsight
as short-sighted. Decisions are reversible, but in the case of
the Newport Office the impact may be permanent even if the predictions
on which the decision is based turn out to be wrong. For this
reason we believe it is important to re-examine and re-evaluate
the criteria on which the decision was based. They did not include
an economic impact assessment on an area which has suffered long-term
effects from the closures of the heavy industry on which its prosperity
was once founded. Nor did they give any weight to the fact that
the Newport Office is the only branch of the service in Wales.
For both these reasons, we believe the analysis undertaken by
the IPS regarding its cost saving programme was unsatisfactory.
These oversights and omissions should be addressed before the
final decision is taken.
Retaining a full passport service
at Newport
13. Witnesses argued that, rather than reducing services,
the IPS should seek to consolidate its services in Newport. In
its evidence, Newport City Council commented that "If IPS
were looking for better value locations for more back office processing
to reduce overheads, they should actually be thinking about consolidation
in Newport, rather than retrenchment".[14]
14. The executive office of the UK Statistics Authority
moved its headquarters to Newport in 2004, with approximately
1,300 staff now working there. Newport City Council commented
that this move had been extremely successful:
The Head of Communication and Planning at the ONS
[…] said of the relocation that: 'the government were trying
to encourage many civil servants to leave the South East and we
decided that this would be a great opportunity to leave London.
So we thought our quality of life has to get better so we came
down here and we found that's exactly what's happened, we have
countryside on our doorstep, we have beaches down the road and
it's fantastic'.[15]
15. Newport City Council also emphasised the difference
in rental costs between Newport and different parts of the UK,
and stated that the Government was incorrect to assume that "long-term
cost savings will be made by exiting the City rather than relocating
within the area".[16]
In looking at the cost benefits of consolidation in Newport, Newport
City Council claimed that:
There is a wide range of prime office space available
in Newport for the passport office to move into […] which
can cost as little as £8.50-£15.50 a square foot for
grade A office space. The average price for office space in London's
West End—IPS's London office—is around £75 a
square foot.[17]
16. The
UK Government is committed to pursuing a programme of relocating
public sector jobs to the regions. We support this approach. In
the light of this, we conclude that there is a strong case for
consolidating services in Newport, rather than removing them.
We therefore recommend a further re-examination of the economic
case for the Newport Office on the basis of consolidation of services
there rather than their removal. In its response to this report
and to the public consultation, we expect the IPS to give a detailed
appraisal of this option.
3 Ev 21 Back
4
Ev 48 Back
5
Ev 21 Back
6
Ibid. Back
7
Ev 17 Back
8
Ibid. Back
9
Ibid. Back
10
Q 14 Back
11
Q7 Back
12
Ibid. Back
13
Ibid. Back
14
Ev 34 Back
15
Ibid. Back
16
Ev 34 Back
17
Ibid. Back
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