Catering and Retail Services in the House of Commons - Administration Committee Contents

1  Introduction

1. In business terms Parliament is no ordinary institution. There are enormous capital costs involved in maintaining the fabric of a treasured national building. Allocating these costs as in any ordinary business to every activity conducted in the Palace of Westminster would produce results showing all of them to be prohibitively expensive. However, there is no serious call to vacate the Palace for a purpose-built, cost-effective 21st century meeting place elsewhere.

2. An institution which comes together in full assembly for only 34 weeks while maintaining staff costs and other overheads for 52 weeks will find it hard to break even. Of course the House has an obligation, not least in the current economic circumstances, to bear down on its running costs. But there is nothing unusual about a subsidy for catering services in a place of work.

3. Members form only a small, albeit vital, proportion of employees on the parliamentary Estate. So this report is also about the needs of many more numerous groups, be they parliamentary staff, Members' staff, visitors, press, civil servants from Whitehall and contractors' staff. Their needs are varied; so too are their incomes.

4. The Commons Catering and Retail Service's aim to perform efficiently and effectively is subject to a number of influences. Being fully operational for only about 65 per cent of the year has already been noted. The hours of sitting, largely dictated by the Government, also affect the situation. The more that they are moved in what is loosely called a family friendly direction, the greater the loss of revenue to the Catering and Retail Service. If Members and staff are free to leave the precincts in the evenings, the greater the likelihood that they will go home (where that is possible) or eat out. The IPSA ruling of 2010 that 128 MPs—recently amended to 97—could no longer claim the cost of additional accommodation has already made this more of a reality.[1]

5. By the same token morning sittings would drastically reduce the opportunity for constituents to undertake much valued tours of the Palace. This would mean a further reduction in demand for refreshment and souvenir items.

6. The increasing need for tight security coupled with tradition has made the House very cautious about the extent to which its facilities might be subject to more open access when not required by Members. Visitors pour into the Palace for tours during parliamentary recesses. Such tours might easily be enhanced by lunches or teas. By extension lunches and teas themselves might be offered to the public without the need for Member sponsorship. To maintain a self-denying ordinance in this regard simply means that overhead costs continue to be borne without any compensating revenue. If security needs are met and accounted for in the prices charged, the House need not hold back from considering whether, in line with other prestige venues, it should not seek an outright profit.

7. A report from a Commons Select Committee has to be cautious and respectful if it crosses the line which divides its responsibilities from those of the House of Lords. Yet to have two separate catering and retail operations within the same building must be a source of extra liabilities for the House. It could only be by agreement, but a merger of the two organisations would surely yield savings. An integrated service would have the potential to create a more diverse range of outlets. This might increase footfall across the Estate.

8. The sale of souvenir items raises a substantial amount of income. At the moment they can be purchased only at sites on the parliamentary Estate. The freedom of the Catering and Retail Service to choose the most advantageous sites is curtailed by English Heritage. The best place for a souvenir shop is the final point on the route followed by the visitor. In the case of the Palace of Westminster this point is unquestionably Westminster Hall. This is not an option which has to date found favour with English Heritage. There is similar disapproval of the souvenir stall which was put into St Stephen's Hall. Whilst this produces a healthy revenue it is absolutely not in the right spot to maximise earnings from what might be termed passing trade.

9. Stately homes and other such attractions would testify that a reliable way of making money from tour groups is to provide a place of refreshment prior to the point of exit. It defies credulity that the Jubilee Cafeteria at the northern end of Westminster Hall manages to buck this trend. Part of the problem is signage. The Jubilee Cafeteria's existence needs to be more boldly advertised. Here again English Heritage's influence has, or is perceived to have, stood in the way. However, it is now time to make a clear decision to override this advice.

10. As this report will show, the catering subsidy cannot be controlled or reduced, let alone eliminated solely by a policy of ever-increasing prices and closure of outlets. The Catering and Retail Service will end up by chasing its tail. A workplace subsidy for catering is nothing out of the ordinary. At Westminster the greatest volume of transactions comes from thousands of modestly paid staff. Their needs should be looked after at reasonable prices. Many of the outside bodies which book refreshment facilities for the purpose of lobbying MPs are charities. It would be unfortunate if they were priced out. Members themselves are well disposed to providing hospitality for their constituents, who appreciate sharing the privilege of tea, lunch or dinner in the Palace. Contrary to myth, MPs do not have an expense account for this purpose. Part of the culture of Westminster is that groups of Members form clubs which dine on a regular basis. These contribute useful income to the Catering and Retail Service. The hike in banqueting prices has impacted harshly on these groups and they now look to eat elsewhere.

11. Suppressing demand is a depressing and ultimately self-defeating way of cutting costs in the complex community of differing needs which makes up a modern Parliament. Provided that prices charged relate to appropriate benchmarking, there ought to be no complaint if the retail sector is the greater generator of additional revenue to help the Catering and Retail Service meet (and possibly exceed) the stiff overall cost reduction target it has been set. If there is a risk to the reputation of Parliament, it must be met and answered.

12. Taking into account all these considerations, this report seeks to identify a positive way forward.

1   Independent Parliamentary Standards Authority, The MPs' Expenses Scheme, HC 501, March 2010, p. 25; and Independent Parliamentary Standards Authority press notice of 25 March 2011. Back

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© Parliamentary copyright 2011
Prepared 10 May 2011