Further written evidence submitted by
the Director of Catering and Retail Services
CATERING SERVICES IN THE HOUSE OF COMMONS
BACKGROUND INFORMATION
1. This paper amplifies evidence previously submitted
to the Committee on 29 November 2010. It responds to the Committee's
request for further information as listed in the Chairman's letter
of 6 December 2010 and incorporates information requested from
the Catering and Retail Operations Manager detailing the top-selling
souvenir products currently sold in the retail outlets.
2. For ease of reference, sections in this paper
are cross referenced to the Chairman's letter where applicable.
COST OF
CATERING AND
RETAIL SERVICES
(Points 1-5 of the Committee's request for further
information)
3. A breakdown of income and expenditure for
2009-10, with central costs allocated across trading outlets,
was provided to the Committee.
4. Sales and cost of sales figures are actuals
for each outlet.
5. Of the £939k central staff costs unallocated
in the previous submission, £611k has now been allocated,
leaving a residual sum of £328k unallocated for the following
costs: Director, Executive Chef, Business Support Manager, maternity
pay, long term sick pay, staff on rehabilitation following long
term absence. The Committee's advisor suggested that these costs
would normally be considered as "central overheads"
and would not be attributed to individual outlet trading costs.
6. Salary and wages figures include Employer's
National Insurance, pension liability and agency staff costs.
7. Late night transport costs have been allocated
only to those outlets open after 11.00 pm, the time after which
staff are provided with transport. These venues are: the Churchill
Room, Terrace Cafeteria, Members' Tea Room and Strangers' Bar.
Other costs have been allocated either on the basis of actual
expenditure incurred (where known) or on a ratio linked to sales,
cost of sales, headcount or other appropriate basis. The Committee's
advisor was involved in discussions to agree the most sensible
basis for apportionment of each type of cost.
8. HR costs are allocated on a ratio linked to
staff headcount in each area, whilst Finance has been allocated
on an estimated resource utilisation for each outlet.
SAVINGS TARGET
FOR CATERING
AND RETAIL
SERVICES
(Point 6 of the Committee's request for further
information)
9. The Commission and the Management Board have
committed to reducing the costs of the House Service by at least
17% in real terms by 2014-15. The savings options put forward
by the Catering and Retail Service are part of this House-wide
savings programme.
10. The Savings Programme was initiated following
the General Election but before the new Administration Committee
was appointed. In the absence of a Committee, informal discussions
took place between senior officials and politicians, and it was
agreed that a target of 50% be tabled as the starting point for
consideration of catering and retail budget reductions.
11. Whilst this target is higher than for other
parts of the House Service, it reflects the ability of CRS to
develop new income streams and to adjust pricing. The additional
income generated by the price increases in Summer/Autumn 2010
will contribute to the savings.
12. The options put forward in response to this
request were all incorporated into the Savings Programme discussed
and agreed by the Management Board and Commission, and circulated
to all Members in November 2010. The Commission has specifically
referred all catering and retail options to the Administration
Committee for their advice and a separate paper has been prepared
to assist the Committee in this task.
PROGRESS ON
LETTING OF
CONTRACT FOR
SANDWICH AND
COFFEE BAR
(Point 7 of the Committee's request for further
information)
13. The commitment made to the Administration
Committee in February 2010 to re-instigate the project to let
the premises to a commercial partner has been delayed for a number
of reasons:
(i) more urgent priorities on senior resource
time, in particular the development of the Savings Programme and
the work flowing from that project;
(ii) competing priorities for procurement resource
time to manage a tender process;
(iii) in the light of the emerging accommodation
strategy, a need to consider the development of new catering services
within a strategic context; the Accommodation Manager's initial
assessment is that: "Annie's bar is an internal space
with no natural light and poor ventilation. The space is not located
on a core circulation route, is encircled by office accommodation,
and access routes cross a change in floor level. All of these
constraints render the space unsuitable for a use requiring a
high level of access. The Accommodation and Logistics Service
considers this space suitable for a back-of-house function, such
as changing, locker or storage space, etc. A front-of-house use
would require major re-configuration of the apace and its access
routes, which would be costly if compliance with disabled access
requirement is to be achieved." This concurs with feedback
from potential bidders.
14. In the light of recent developments, we recommend
that the proposition to offer the former Annie's Bar premises
to a 3rd party commercial partner is reviewed in the context of
other options for income generation or cost savings as put forward
in the Savings Programme or new ideas emerging from the Committee's
Inquiry.
PROGRESS ON
IMPLEMENTATION OF
RECOMMENDATIONS FROM
THE ADMINISTRATION
COMMITTEE'S
2005 REPORT ON
REFRESHMENT DEPARTMENT
SERVICES
(Point 8 of the Committee's request for further
information)
(a) Opportunity for input into the development
of the long-term Works Programme
15. New governance arrangements were put in place
for the planning and delivery of estates matters across both Houses
in 2007, when the Parliamentary Estate Board (PEB), a sub-Committee
of the Management Boards of both Houses, was formed to fulfil
an assurance and advisory role. It is chaired by the Director
General of Facilities in the House of Commons.
16. As part of the annual business cycle, the
PEB receives a detailed submission from the Parliamentary Director
of Estates, which sets out the annual project budget requirement
and programme of work for the following year in detail, and for
the subsequent three years in plan. This is accompanied by a prioritised
list of ongoing and proposed projects, along with the associated
financial forecast. A project initiation procedure has been established,
which provides Catering and Retail Services with a mechanism for
inputting proposals and requirements to this planning cycle, including
suggestions from the Committee. This budget requirement is interrogated
in detail by the PEB and, in due course, is then recommended to
the Management Boards of both Houses.
17. In 2010 this annual project budget requirement
was submitted in the form of an Outline Business Case - Programme
of Works 2011-12, approved by both Clerks on 21 December 2010.
All catering projects are included within this document. However,
it should be noted that any complex or Member-sensitive catering
projects are also submitted to the Administration Committee for
discussion and advice. One such scheme - an option to convert
the Adjournment restaurant into a coffee bar/sandwich/deli retail
area - is almost ready for submission to the Committee.
18. Non complex, "business as usual"
type catering projects (such as the replacement of like-for-like
catering equipment, alterations to extract ventilation, kitchen
layouts etc) are not usually reported directly to the Administration
Committee, but are included in the overall annual project budget
requirement and programme of work.
(b) Study Tours
19. A summary of the principal study tours to
external organisations for the past four years (2007-10) is attached
at Annex B. In accordance with the House's records management
system, records for previous years have already been disposed
of.
(c) Introduction of food to the Strangers' Bar
20. Freshly made sandwiches were introduced in
the Stranger's Bar and trialled for a period of one year. However,
uptake was very poor and wastage was high. In consultations with
customers, the sandwich offer was switched to bought-in product
with a two-day shelf life. This reduced wastage but take-up of
the service remained low, except during the summer months when
customers sitting outside on the Terrace valued the convenience
of buying a sandwich from the bar instead of having to go into
the Terrace Cafeteria.
21. At other times of the year, bar staff collect
and serve sandwiches from the Terrace Cafeteria on an individual
request basis.
22. In addition to sandwiches, a range of good
quality hot savoury pastries and pies has been introduced for
sale in the winter months. Sales are relatively low but regular
customers appreciate the opportunity for a hot snack. Wastage
is minimised and quality optimised by cooking off the product
in small batches.
(d) Possible locations for additional made-to-order
sandwich or coffee bars
23. Since the Committee's report in 2005, Moncrieff's
Café-Bar opened, offering a range of premium coffees and
made-to-order sandwiches. The coffee offer is well used by members
of the Press Gallery, but primarily as a take-away service. The
location has proven too far off the beaten track to attract large
numbers of other customers. A premium made-to-order sandwich offer
was introduced when the venue opened, but take up was poor and,
in consultation with customer representatives, the service was
discontinued after a trial of around a year.
24. To date, the only viable scheme that has
been developed for the introduction of a retail-style premium
coffee/sandwich/deli offer is in Portcullis House, which would
involve the loss of the Adjournment. This option is discussed
in more detail in the Savings paper.
25. Other options are also put forward in the
savings paper for the location of a coffee bar in the Palace,
other than in the former Annie's Bar premises.
USAGE OF
CATERING FACILITIES
(THREE MONTHS
OCTOBER - DECEMBER,
2009 & 2010)
(Point 9 of the Committee's request for further
information)
26. Usage graphs for all catering venues have
been updated to include statistics for October to December 2010
alongside statistics for 2009. These are attached at Annex
C (parts 1-4).
PRICE INCREASE
- ESTIMATED PROFIT
CONTRIBUTION (TO
DECEMBER 2010)
(Point 10 of the Committee's request for further
information)
27. As stated in the evidence submitted to the
Committee in November, it was estimated that additional income
in the region of £80,000 had been generated by the price
rises implemented at the end of August and on the return of House
in mid-October.
| 2010 | Sales increase against Budget
since price increases
£
|
| Sept/Oct
November
December | 80,000*
243,000
157,000
|
| 4-month total | 480,000 |
(*Note: Sept/Oct variance to budget reduced from £150k
to account for contribution from September sitting)
28. Even though January and February are traditionally lean
months, the performance to date indicates that the savings target
of £500,000 from price increases in 2010-11 should be comfortably
exceeded.
29. To date, the additional income has all fallen through
to the bottom line, with the net subsidy moving from a position
of being £240,000 below budget at the end of August (due
to the impact of the General Election) to a position of being
£565,000 ahead of budget at the end of December. This represents
a turn-around of over £800,000 over the four months.
PAY AND
GRADING INFORMATION
(Point 10 of the Committee's request for further information)
30. Staff pay and grading information is attached at Annex
D.
January 2011
| 
