Further written evidence submitted by
the Director of Catering and Retail Services
INITIAL CATERING AND RETAIL SERVICE SAVINGS
FOR CONSIDERATION
BACKGROUND INFORMATION
1. Details of the Management Board's initial
savings for consideration were issued to all Members and House
staff on 15 November 2010.
2. Following the consultation exercise in November,
the Commission agreed in December a package of savings for most
parts of the House service, but proposals for changes to the catering
and retail services have, as an exception, been referred to the
Administration Committee for consideration as part of their Inquiry.
PURPOSE
3. This paper sets out in more detail each of
the initial savings and income generation proposals put forward
by the Catering and Retail Service. It is a discussion document
to assist the Committee in forming an opinion about which items
it does or does not support.
4. These proposals are not the only ways in which
the catering subsidy could be significantly reduced—some
ideas may not find favour, whilst other, new ideas are likely
to emerge from the on-going consultation process and from the
Committee's Inquiry.
SAVINGS TARGET
FOR CRS
5. As a starting point, the Committee will wish
to consider the overall savings target for the Catering and Retail
Service (CRS).
6. The commissioning brief asked CRS to prepare
savings options based on a net cost reduction of 50%. The overall
House target is 17%, but the Management Board have acknowledged
from the outset this will not be evenly distributed across all
budgets. The higher target for catering and retail services reflects
the fact that its operating costs are significantly offset by
sales income: it is the difference that is to be halved, not the
total cost. And CRS has more scope to develop new income streams
than other parts of the House service.
7. The CRS package as it stands represents a
subsidy reduction of 57% by 2014-15, leaving scope to reject up
to £440,000 of proposals and still deliver a package that
would deliver approximately 50% savings.
8. The savings proposals set out in this paper
are relatively short-term measures—they do not include options
for the more radical redesign of services which will be taken
forward as part of the next phase of the spending review. As noted
in the Director General of Facilities' paper, the Administration
Committee will be consulted as service redesign options are explored.
INITIAL PROPOSALS—COST
ESTIMATES
9. The call for Departments to offer short term
savings proposals did not allow time for detailed costings and
business cases to be prepared. For these reasons, the figures
should be treated as "ball-park" estimates only at this
stage.
10. The savings or income potential shown against
each project include an income impact estimate, cost of sales
attached to that income and, where new services or service cut-backs
are proposed, and an estimate of possible staff resource savings
or other operating cost savings.
11. The costings do not take into account any
investment costs, for example to re-develop an outlet for changed
use, or make allowance for staff severance costs if staff are
no longer needed to deliver the new service and cannot be re-deployed.
Such costs would take much longer to establish and would require
wide consultation not only with other users of the services, but
also with Trade Unions, the Parliamentary Estates Directorate,
possibly the House of Lords, and a host of other stakeholders.
12. For this reason, we suggest that this paper
be treated as a "programme initiation document" used
by the Administration Committee to recommend which CRS proposals
should be developed further, which to hold in reserve and which
not to pursue. Together with any other savings or income generation
schemes the Committee recommends in its Inquiry, we would then
set up and resource a series of projects within the Facilities
Transformation Programme, with the Facilities Finance Director
providing assurance that the agreed savings are achieved by the
business.
SAVINGS PROPOSALS
| Ref | Description of Saving
| Start Year | Annual £
|
| Df15 | CRS procurement savings
| 2013-14 | 243,000
|
13. Unlike most other parts of the House service, the Catering
& Retail Service has some bespoke systems in place to manage
its procurement, but the service is subject to the same governance
procedures as the rest of the House service. Details of the CRS
purchase management processes and systems are set out in Annex
B.
14. There is undoubtedly scope to deliver savings through
more effective procurement, and collaboration between the two
Houses is developing rapidly in this area. The savings programme
is spurring on this work, but other constraints, such as the difference
in purchasing systems, are also now being addressed, following
a strategic agreement between the two Houses to develop common
ICT systems to support their catering and retail activities.
15. The savings proposal put forward in the initial package
incorporates several discreet procurement measures, some of which
are more contentious than others:
I. Greater consolidation of supply contracts, including more
joint procurement with the House of Lords, to engineer higher
discounts on the basis of economies of scale.
- As well as the savings imperative, this work is spurred on
by planned the opening of the Off-Site Consolidation Centre (OSCC)
in March. This will require all suppliers to deliver to a facility
operated by a 3rd party logistics contractor, who will carry out
security checks and then decant the goods for onward supply to
the Parliamentary Estate in their own fleet of vehicles. Consolidation
of the catering and retail supply chain will improve the efficiency
of the OSCC operation and provide an even greater incentive to
tender contracts simultaneously bi-camerally. The House of Commons
has already appointed an additional procurement officer for 18
months to speed up this work. Target savings are: 3% improvement
on food, beverage and souvenir prices; 5% reduction in the cost
of disposables; 10% savings on other purchasing, such as small
equipment. Together this adds up to an estimated £116,000,
and has the potential to yield more.
- The project is non contentious, resources have been appointed
to the project and work will commence in February 2011. We therefore
expect to see savings start to come through earlier than planned
when the savings package was drafted.
II. Use of appropriate and suitable purchasing consortia or
other 3rd party partnering arrangements for CRS procurement.
- This is likely to be explored as part of the service redesign
work and so has not been costed into the initital savings package.
The respective heads of CRS in each House are already collaborating
to plan this work.
III. Reduction in quality specifications for, in particular,
fresh foods.
- Many of the quality specifications currently used in CRS contracts
add cost to the product. The most frequent reason for this is
the inclusion of high standards of animal welfare and other provenance
criteria in food specifications. For example, the current animal
welfare standards required for our pork and bacon supply is generally
only achieved as a matter of course by UK farmers, and farming
assurance schemes, such as the Red Tractor, are recognised and
trusted by consumers. By reducing the higher welfare standard
specification, imported bacon could be purchased at an estimated
saving of over £30,000 a year. Other scope for savings include
a switch away from premium branded ingredients, greater use of
frozen produce, less use of prime cuts, etc. We have already identified
many of the savings that could be made in this area, which come
to more than the sum of £127,000 included in the savings
package.
- However, we strongly believe that our customers are keenly
interested in the provenance of the foods they are eating and,
if consulted, would support our current procurement policies in
this respect. We would be very reluctant to go down this savings
route and, to the contrary, believe that we should be more pro-active
in informing our customers about the provenance of foods served
in the House of Commons.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df16 | Offer buffet menu and carvery only in Members' Dining Room
| 2011-12 | 145,000
|
16. This proposal has been put forward as a way of reducing
the cost of operating the Members' Dining Room. After allocation
of central costs, the Members' Dining Room is one of the most
costly venues to operate. This is largely due to the pattern of
demand: the service is not needed at times when the House is not
sitting, and income potential is limited by the sitting hours
of the House. The room is already made available for banqueting
at times when the House does not normally sit, but this has caused
problems on occasions when the House sits late at short notice.
Also, the market for private events is constrained by the requirement
for a Member to be present at any private function they have sponsored,
with the result that even if the room is available for banqueting,
it is not necessarily sold.
17. However, when the House is sitting, the Members' Dining
Room performs an important function by providing a facility where
Members can eat in private, with confidence that their conversation
will not be overheard or reported. Evening usage of the room is
notoriously difficult to predict, with no advance bookings and
Members themselves often not able to predict calls on their time
until very late in the day. Occupancy can vary wildly, from very
low numbers to up to 150 Members descending on the dining room
within the space of 15 minutes. Whatever the level of business,
Members rightfully expect a service that is welcoming, swift and
professional, with food that is appealing but not over-elaborate.
18. By far the biggest cost in operating this service is the
cost of staff. We have therefore considered how we might reduce
the labour resource requirement, whilst still providing a level
of service that meets the needs of most Members. On this basis,
we have suggested that the à la carte menu could be discontinued,
reducing the service offer to a carvery and buffet menu only.
This would enable staff savings to be made both in the kitchen
and front-of-house.
19. The projected £145,000 saving assumes the
loss of six posts (four in the dining room and two in the kitchen).
20. Although no capital investment is needed to introduce
the change, some expenditure on new equipment would enhance the
buffet and carvery presentation.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df17 | Convert the Adjournment into a premium coffee/sandwich/deli bar; re-fit the Despatch Box area to provide a quick "grab-n-go" sandwiches, snacks and hot & cold drink; reduce menu offer in the Debate to hot food only.
| 2012-13 | 145,000
(potential to yield £400,000+, depending on operating hours)
|
21. This option has been proposed as a cost saving opportunity,
but a project examining the future of catering services in Portcullis
House has been in progress for some time now and is shortly due
to submit a scheme proposal to the Committee for the re-design
of services around the Atrium (the Despatch Box, Adjournment and
Debate).
22. In essence, the scheme proposes the development of these
catering services into a food court consisting of a "grab-n-go"
sandwich and hot/cold drinks counter where the Despatch Box is
currently located, the conversion of the Adjournment to contain
a bigger, more flexible premium coffee bar with a new made-to-order
sandwich and salad counter, and the re-focus of the Debate on
hot, cooked meals. The service proposition is modelled on the
sort of premium-quality retail food outlet that is now becoming
common in the workplace and which, we believe, would prepare Portcullis
House for the next generation of users.
23. We recognise that the Adjournment is a popular facility
with many Members. However, with the exception of Wednesdays,
lunchtime usage of the dining rooms available for Members to entertain
guests (ie Strangers' Dining Room, Churchill Room and Adjournment)
rarely achieves 50% of capacity (even with capacity defined as
"all tables occupied", not "all seats occupied").
There is clearly over-supply of table-service restaurant facilities
at lunchtimes. Evening occupancy is better matched to demand,
but a new service in the Adjournment could be designed to take
up some of this trade by offering a wine bar and café-style
food offer. Furthermore, other spaces are currently closed in
the evenings, leaving scope to re-define which areas remain open
for trading and which venues are available for private events.
24. The Adjournment is located in a prime space that, unlike
the Strangers' Dining Room or Churchill room, lends itself to
the introduction of a new retail catering service offer. Such
services have proven elsewhere to contribute reduce subsidies,
as the products sold are typically high margin products with lower
staffing costs than traditional restaurant services, and sales
are more likely to extend beyond traditional meal times.
25. The conversion of the Adjournment into this new facility
would deliver the following enhancements:
- a made-to-order sandwich and salad/deli bar in a large, easily
accessible space;
- an enhanced, larger premium coffee counter, with space for
two service points to reduce queuing and improved space for displaying
a range of morning and afternoon cakes and pastries;
- a small hot counter for an enhanced hot breakfast offer and
the potential for a wine-bar/cafe menu to be served in the evenings;
- removal of sandwiches and other "grab-n-go" items
from the Debate, leaving this venue to focus on the offer of hot
lunches only;
- the creation of a "food court" range of offers around
the atrium throughout the day, with the flexibility to contract
the service offer back into the Adjournment space only in the
evenings;
- reduces the cross-flows of customer traffic in the Debate,
and reduces queuing by distributing demand at lunchtimes across
a larger number of service points; and
- depending on the service hours of each counter, the potential
to deliver savings significant in excess of the £154,000
put forward in the initial savings document; a costing model has
been prepared and reveals that, subject the hours of operation
of the various parts of the new service, savings could reach in
excess of £400,000.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df18 | If DF17 not accepted, close the Churchill room and use as permanent banqueting space
| 2012-13 | 257,000
|
26. This option is tabled as an alternative to the conversion
of the Adjournment outlined above. It is based on the same rationale
that there is currently an over-supply of dining rooms for guest
hospitality.
27. As demonstrated in the subsidy cost analysis by outlet,
the Churchill Room is more costly to operate than the Adjournment,
and so the savings of closing may initially appear greater, but
the income potential of the Portcullis House scheme is greater.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df19 | Open the Terrace Pavilion buffet to all pass holders throughout the week
| 2013-14 | 4,000
|
28. The Terrace Pavilion Buffet only opens for six to seven
weeks during June and July, but is currently only open to all
pass holders on Fridays. Fridays are consequently its busiest
day, and there is strong support from staff and other pass holders
to extend access on other days.
29. To prevent the room becoming fully booked by staff and
other pass holders, we would suggest that an agreed number of
tables are held back for Member-only bookings. These could then
be released to the wider market of pass holders at a later date.
We would suggest releasing unbooked tables on a Thursday for the
following week's business.
30. The savings are modest, but the potential to generate
goodwill is significant. There is no reason why this change could
not be implemented for this year.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df20 | Operate the Pugin Room as a bar service only
| 2013-14 | 39,000
|
31. This savings option has been tabled purely as a way of
reducing the cost of a relatively low used space. The afternoon
tea service is well subscribed in the Pugin Room, but this business
could be transferred elsewhere (se IGF4, which suggests use of
the Terrace Pavilion Bar area for the service of afternoon teas).
32. Certainly, the usage statistics indicate that the Pugin
Room is lightly used before 12.00 noon or after 10.00p.m., so
even if the afternoon tea service is retained in the Pugin Room
there is scope to reduce staff costs by opening later and closing
earlier. This should still deliver a reduced saving of around
£25,000 through a reduction in staffing. This may
be deliverable earlier than planned, depending on staff re-deployment
and severance options.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df21 | Restrict the menu in the Members' Tea Room
| 2013-14 | 74,000
|
33. This option is based on a proposition to return the Tea
Room to its original purpose: as a snack bar, not a cafeteria.
The space itself struggles to accommodate the current extent of
food being served, and shoe-horning in additional food offers
has compromised the integrity of the service.
34. If savings are to be made in this area, it could be achieved
by re-directing Members wanting hot, cooked meals to the Terrace
Cafeteria or Members' Dining Room. This would leave the Tea Room
offering a light snack menu of sandwiches, cakes, other cold snacks
and hot/cold beverages only.
35. The savings are all staff related, assuming that sales
income from hot meals would largely be transferred to other venues.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df22 | Close the Members' Tea Room on non-sitting Fridays
| 2013-14 | 10,000
|
36. The usage statistics submitted to the Committee support
this recommendation, and indeed suggest that the room could be
closed on Fridays even when the House is sitting. The savings
are staff related.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df23 | Introduce self-clearing policies in the Terrace Cafeteria and the Debate
| 2013-14 | 81,000
|
37. Self clearing systems operate successfully in all other
cafeterias and we believe they should be encouraged in the last
two remaining, albeit the busiest, two cafeterias. The savings
are staff related, but we would recommend a gradual approach to
staff reduction in these areas to ensure that there are sufficient
staff available until customers are used to self-clear systems.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df24 | Close Moncrieff's self-service cafeteria and the table-service restaurant area
| 2013-14 | 155,000
|
38. This proposal does not include any suggestion to close
the Café-Bar in Moncrieff's, which is a successful, valued
and cost-effective service. Certainly, it has the potential to
do more trade, but closure of the other facilities in Moncrieff's
may assist in this.
39. Daily usage of Moncrieff's table-service area is very
low, and many Members of the Press Gallery would be happy for
this to close if access to another dining facility was extended
to them. Usage statistics indicate that there is capacity to do
this, and there were no problems when special arrangements were
made for the Press to use the Churchill Room during works in Moncrieff's.
40. The self-service restaurant, which is only open at lunch-times,
serves an average of around 100 covers a day, or up to 150 on
Fridays. When the area closed last year for emergency kitchen
works, there was no discernable impact on any other venue, indicating
that the custom from Moncrieff's cafeteria can be readily absorbed
elsewhere.
41. If this area were to close, one issue to address would
be to agree an alternative venue for the monthly Press lunch,
which is very important to the functioning of the Press Gallery.
We do not believe this is an insoluble problem.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df25 | If DF24 is accepted, then use Moncrieff's cafeteria as a staff restaurant for CRS staff
OR
Use Moncrieff's as an additional banqueting space for Member/Parliamentary/staff events
| 2013-14 | 48,000
|
42. Moncrieff's is a relatively recently re-fitted kitchen,
and thought was given to how else this space could be used. The
key difficulty is its location, tucked away on the 3rd floor accessed
by a small lift that many people do not know exists. It is also
in close proximity to unsecured routes that lead directly into
the Chamber and, as such, the Serjeant has significant concerns
about its use for banqueting events attended by large numbers
of unescorted visitors.
43. It could, however, be utilised for the provision of staff
meals to the catering staff. This would have the advantage of
freeing up space in the other cafeterias for paying customers,
and would enable food costs to be reduced by restricting the range
of foods available. Changes to the free meals arrangement for
catering staff would have to be negotiated with the Trade Unions.
44. Alternatively, this space could be used as a banqueting
facility for pass-holder only events. It can accommodate up to
90 people, but with careful screening could be made suitable for
smaller events as well as larger ones. As well as catering for
Member-only and parliamentary events, the facility could be offered
to other pass-holders, for example for retirements or other staff
social activities at a lower tariff than the fully-commercial
banqueting prices. It is difficult to profile the income potential
from this new business, but a net profit contribution of £50,000
is considered achievable.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df26 | Operate Bellamy's Cafeteria as a lunchtime venue only
| 2013-14 | 54,000
|
45. The usage statistics demonstrate that Bellamy's cafeteria
has a low level of trade outside the lunchtime period. Breakfast
business could be transferred to Portcullis House, particularly
if the proposed conversion of the Adjournment goes ahead. Otherwise,
the current hot breakfast offer in Portcullis House could be enhanced
once the kitchen equipment has been replaced this summer.
46. The cafeteria seating area could remain open for teas,
coffees and cold drinks during the morning, but after 3.00 p.m.
there is virtually no demand even for this and we recommend closing
the area after lunch.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df27 | Close the 6th Floor café, 7 Millbank
| 2013-14 | 58,000
|
47. This proposal has provoked more feedback from staff than
any other proposal in the savings package. There is no doubt that
the venue is a welcome facility for a significant number of the
650+ staff based in 7 Millbank, many of whom work in large, open
plan spaces.
48. The 6th floor café serves two markets: it operates
as a premium quality coffee bar with informal meeting area, in
a similar way to the Despatch Box in Portcullis House. However,
unlike the Despatch Box, it also operates a lunch-time café
menu, which is popular with staff who want to treat themselves
to something that is a step above the cafeteria offer.
49. However, the facility comes at a cost of over £120,000
p.a. with allocated costs, or around £60,000 if only direct
costs are taken into account.
50. The Portcullis Cafeteria on the ground floor of 7 Millbank
is now almost 20 years old, and despite some uplifts over the
years it is now starting to look its age and would benefit from
a more extensive refurbishment. If a project is initiated for
this, we suggest that the future of the 6th floor café
is examined at the same time. This project would explore options
for the reprovision of some or all of the 6th Floor Café
services into an enlarged and enhanced ground floor facility should
yield operational savings.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df28 | Close the Portcullis Cafeteria evening service
| 2012-13 | 10,000
|
51. This proposal has been made before, and the staff who
lobbied for retention of the service were warned that they must
be prepared to "use it or lose it".
52. Although the evening service serves an average of around
40 customers a night, only around 5% of these (or two people)
purchase items that are not also available from the vending machines
located on the 5th floor. This level of trade has now persisted
for several years. We therefore recommend that this service is
discontinued. If necessary, a vending machine could be positioned
in the cafeteria or nearby, and the room left unlocked for staff
to use during their rest breaks.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df29 | Reduce cost of the cleaning contract by absorbing some light cleaning tasks into CRS staff duties
| 2012-13 | 110,000
|
53. Cleaning of front-of-house and kitchen areas is carried
out under the bi-cameral cleaning contract. The contractor also
provides a janitorial service during the daytime. Many of the
light cleaning duties carried out by the contractor (such as dusting
of furniture, carpet vacuuming, cleaning down of display cabinets
and low-level cleaning in kitchen areas) are commonly carried
out by catering staff in other organisations.
54. Given that the savings proposals will require re-negotiation
of contracts for staff in many areas, it would provide a timely
opportunity to explore what light cleaning duties could be incorporated
into the catering staff contracts in order be able to re-negotiate
the cleaning contract specification and price.
55. The savings target of £110,000 represents 20% of
the basic contract price for the cleaning of catering areas.
| Ref | Description of Saving
| Start Year | Annual £
|
| Df30 | Further catering staff efficiencies
| 2014-15 | 250,000
|
56. This target has been added to the savings target, largely
to represent the reduced management and support staff requirement
if most of the savings options are accepted. The achievable figure
will vary according to which options are implemented. The saving
is programmed to be delivered by 2014-15, but some savings have
already been made through staffing reductions in the management
and administration teams. It is anticipated that the savings would
flow through incrementally as the service adjusts to its new requirements.
INCOME GENERATION OPPORTUNITIES
| Ref | Description of Income Opportunity
| Start Year | Annual £
|
| IGDF1 | Increase retail souvenir sales by opening a high street outlet, and through development of e-commerce
| 2012-13 | 400,000
|
57. The House currently only sells souvenirs within the confines
of the Parliamentary Estate. This is partly in compliance with
restrictions imposed on the use of the crowned Portcullis badge
when permission was granted by HM The Queen. However, it is likely
that this restriction could be removed if approaches were made
through the appropriate channels. More fundamentally, when considered
by Committees in previous Parliaments, there has been a desire
to retain an element of exclusivity so that visitors to the House
or recipients of items donated by MPs feel "privileged"
in that the product is not available for sale on the high street.
58. This school of thought must be weighed against the commercial
potential if the House of Commons were to follow others, such
as the Royal Collection, who have established a highly regarded
and profitable retail business.
59. The consistent advice of experts in this area is the initial
step should be to set up a high street outlet. This provides an
opportunity to develop an understanding of what products appeal
to the general public, which might be very different to the products
that sell well from the on-site outlets. Setting up a profitable
e-commerce retail business is, according to those same experts,
a lengthier process and one that is slow to build into a profitable
business.
60. Based on that advice, the income target of £400,000
is almost entirely based on opening a high street outlet in the
vicinity of Parliament, most likely in one of the shop units on
Bridge Street or Parliament Street. A study examining the future
of the unit that is currently operated as the Parliamentary Book
Shop has already commenced and the Committee will be consulted
on its recommendations.
61. The target of £400,000 included in the savings package
is based on an estimated turnover of £1 million p.a., which
would double the current turnover from the sale of House of Commons
souvenirs. This target has been calculated at the annualised income
of the weekly average of St Stephen's Shop during the summer opening,
plus a 15% increase to reflect the potential footfall of a well-located
high street shop.
62. The business model assumes trading six-days a week, with
3.5 full-time equivalent staff employed in addition to current
retail resources. This could be a bi-cameral venture, but any
profit-share arrangement with the House of Lords would reduce
the estimated returns to the House of Commons.
| Ref | Description of Income Opportunity
| Start Year | Annual £
|
| IGDF2 | Catering price increases
(already implemented)
| 2011-12 | 1,267,000
|
63. The prices throughout the catering service have now been
aligned against the following benchmarks:
- Cafeterias in line with prices charged in the staff restaurants
in a comparator group of Government Departments and devolved UK
Parliaments/Assemblies.
- Dining Rooms 25% below high-street prices, based on a comparator
group of mid-market, London restaurants.
- Bars in line with prices charged in a competitively-priced
high street pub chain.
- Banqueting prices in line with commercial prices charged by
other Central London conference and banqueting venues.
- Retail (souvenir) prices in line with other comparable venues.
64. The target of saving of £500,000 in 2010-11 is on
track to be achieved or exceeded, indicating that the annualised
equivalent of £1.2 million should be achievable.
65. There remains some scope to re-position a few other prices,
particularly in the retail (souvenir) areas and some of the additional
services sold to banqueting customers (flowers, printing, A.V.
hire, etc). The additional £67,000 in the target reflects
this.
66. Further savings could be achieved by introducing a high
tariff for visitors in the cafeterias. This has not been included
in the savings target, but is estimated to have the potential
to yield around £20,000 per annum.
| Ref | Description of income Opportunity
| Start Year | Annual £
|
| IGDF3 | Extend access to dining rooms to other pass holders
| 2011-12 | 44,000
|
67. This covers two, separate, proposals:
(i) To extend access to the Members' Dining Room to all Members
of the House of Lords, not only those who are former MPs. Agreements
would have to be reached in order to protect availability for
MPs in their own dining room, but if such agreement could be reached,
there is the potential to yield a net contribution conservatively
estimated at £11,000 (based on an assumed additional
30 lunch and 30 evening meals a week).
(ii) Extend access to the bookable dining rooms (currently
the Strangers' Dining Room, Churchill Room and the Adjournment)
to all pass holders. Even if this was on the basis of late availability
only (two working days is the planning assumption), an average
of an extra 10 lunch and 10 evening covers a day is estimated
to contribute an additional £33,000.
| Ref | Description of Income Opportunity
| Start Year | Annual £
|
| IGDF4 | Offer bookable lunches and afternoon teas to Tour Visitors
| 2011-12 | 163,000
|
68. The Strangers' Dining Room frequently has surplus lunchtime
capacity. We believe that this slack could be taken up by visitors
starting or finishing a Parliamentary Tour at a time convenient
to take lunch. Additionally, this could be offered on Saturdays
if the Principal Floor is not booked for a private event. The
Strangers' Dining Room is immediately adjacent to the security
post in the Lower Waiting Hall, but it might be necessary to position
a second security officer outside the dining room. In total, we
conservatively estimate that this business could generate additional
income of around £150,000, with an estimated net contribution
of £85,000 after costs have been taken into account.
69. Similarly, traditional afternoon teas could be offered
to Tour visitors Monday- Saturday. We suggest that this could
be done in the North end of the Terrace Pavilion, affording a
view over the river. It would be possible to physically bar entry
onto the Terrace itself, and security is already configured to
allow public access to the banqueting areas. Based on a selling
price of £18 a head, which is very competitive in the London
market, such a scheme could yield a net contribution of another
£75,000+.
| Ref | Description of Income Opportunity
| Start Year | Annual £
|
| IGDF5 | Convert Main Souvenir Kiosk to premium coffee bar
| 2012-13 | 42,000
|
70. Looking at sites to locate a premium coffee bar in the
Palace, nowhere is available with access to a meeting space as
desirable as the Atrium in Portcullis House. However, apart from
during severely inclement weather, the Terrace is a popular place
to take a cup of tea or coffee. There is potential to grow this
market by offering a premium coffee bar. This type of business
contributes a high gross margin and incurs low staffing costs,
so is strategically a desirable business proposition.
71. The savings package suggests that the Main Souvenir Shop
could be converted for this purpose, with the souvenir business
consolidated into a larger, enhanced shop in St Stephen's Hall
or Westminster Hall. The Medals Corridor, where the proposed site
is located, enjoys a high footfall, and if 50% of the business
level of the Despatch Box could be achieved, this project has
the potential to deliver an estimated net contribution of £42,000.
72. Alternatively, but on a more modest scale, the Strangers'
Bar could be re-fitted to include an espresso machine (although
it is acknowledged that space is tight in this bar counter area).
A modest refurbishment of this area, which opened in 1995, would
have the double benefit of uplifting the Strangers' Bar itself
and, with the incorporation of a daytime coffee service, would
make use of a space and staffing that is underutilised through
the day.
| Ref | Description of Saving
| Start Year | Annual £
|
| IGDF6 | Increase banqueting income
| 2011-12
2012-13 | 128,000
220,000
|
73. The largest contributor to this proposed new income stream
would be from the hiring out of Westminster Hall on a limited
number of occasions a year for public/corporate events. The simplest
way to do this would be for the House to offer Westminster Hall
on a room hire basis only, with clients contracting direct with
an approved 3rd party event catering specialist to deliver the
event. We have been advised that a daily rate of £25,000
would be readily achievable for such a unique and historic location,
and that to preserve exclusivity and premium pricing, the House
should only offer the venue a few days a year. The savings package
includes a net contribution of £100,000 from this
source, based on hiring out Westminster Hall four times a year.
74. There is still scope to increase banqueting room hire
fees to bring them into line with commercial rates, and at present
no room hire fees are charged for events taking place in Portcullis
House, Conference Room E or the Jubilee Room. It has been conservatively
estimated that this could generate an additional £40,000
p.a.
75. Currently, the banqueting events can be booked as long
as there is space availability and the booking meets the regulations.
Banqueting staff do not have the authority to exercise discretion
to decline business, even when they know that the event will be
unprofitable. This most frequently applies to small weekend events,
which are often family celebration that attract the 25% discounted
price. If no other functions are taking place at the same time,
and with staff paid at premium rates for weekend working, these
events are unprofitable. The banqueting team have estimated that
around £30,000 a year could be saved if they had the
discretion to decline such unprofitable business.
76. As has been said in previous evidence to the Committee,
it is difficult to sell banqueting space at times when Members
are not present in the House. This could be assisted by allowing
all Members of the House of Lords to host events in the House
of Commons at off-peak times (peak demand is Tuesday/Wednesday).
A further £30,000 net contribution has been estimated
from widening the sponsorship regulations in this way.
77. A target to squeeze a further £20,000 from
banqueting sundry revenue has been included in the savings package.
This is likely to be achieved through many small changes, including
increased income from the recently enlarged Terrace Pavilion.
January 2011
Annex B
PURCHASE MANAGEMENT PROCESSES IN THE HOUSE OF COMMONS
CATERING AND RETAIL SERVICE
1. The House of Commons Catering and Retail Service (CRS)
currently purchases over 4,500 food, beverage and souvenir products,
plus another 1,000+ other commodities and supplies needed to carry
out its business activities. The service currently retains around
160 suppliers to supply these goods, but this includes over 40
small businesses who supply specialist ingredients or bespoke
souvenir products.
2. Under the House of Commons Resource Framework, supplier
contracts are subject to the following thresholds for tendering:
| — | Up to £1,000 |
1 oral quote |
| — | £1,000-£2,000
| 2 oral quotes |
| — | £2,000-£5,000
| 2 written quotes |
| — | £5,000-£25,000
| 3 written quotes |
| — | £25,000-£90,000
| 3 formal tenders |
| — | £90,319+ |
|
3. In determining the tendering method, the contract value
is generally taken as the value of the supply requirement over
four years. This avoids the cost of tendering too frequently but
provides a sufficiently long contract to be of interest to the
market. CRS contracts are generally let for a period of three
years, with an option to extend for a further year.
4. Given the size of the catering and retail operations in
the HOC, the vast majority of procurement for the catering service
must be tendered under the EU procedures. The central Commercial
Services Directorate in the Department of Resources oversee all
EU tenders for CRS, except in the case that a bi-cameral contract
is being tendered and managed by the central procurement service
in the House of Lords. In the House of Commons, EU tender notices
and responses are issued through the Commercial Services' e-tendering
portal to provide a full audit trail of the process. A team is
set up to manage each tender, led by a procurement officer provided
either by Commercial Services, a House of Lords' procurement officer,
or the Purchasing Manager employed within CRS. Chefs and managers
employed in the business are responsible for drafting product
specifications for inclusion in the tender documents, but are
not authorised to appoint suppliers or transact business with
unapproved suppliers.
5. Joint procurement for catering supplies has been in place
for a number of years, but even though the House of Lords are
invited to join in a tender, they may for their own business reasons
prefer to contract separately. As well as adding purchasing power,
joint procurement helps make best use of specialist procurement
staff resources, and works towards a strategic aim to reduce the
environmental impact of deliveries to the House.
6. Bi-cameral contracts covering CRS activities currently
include fruit and vegetables, dairy, eggs, laundry, agency staff,
learning & development, EPoS (point-of sale system), temperature
monitoring, the Offsite Consolidation Centre, kitchen and front
of house cleaning (as part of House-wide cleaning contract). The
dry goods contract was tendered as a bi-cameral framework agreement,
but the House of Lords subsequently withdrew from that contract.
The House of Commons CRS has recently agreed to fund an additional
procurement officer, due to commence work in February 2011, with
the specific aim of increasing the level of joint procurement
with the House of Lords. This post will be part of the Commercial
Services Directorate team in the Department of Resources, but
will work closely with the Purchasing Manager in CRS.
7. Most contracts for the supply of food, beverages and other
catering consumables are set up as framework agreements, generally
with three suppliers appointed to the framework to ensure on-going
competition and to obtain best value over the full lifetime of
the contract. Some contracts are let on a sole supply basis, for
example cleaning chemicals, laundry and many souvenir suppliers.
This tends to be in cases where suppliers have a unique product
or service, or where the commodity prices are relatively stable
and unlikely to fluctuate wildly over the life of the contract.
8. Once a contract has been let, the CRS Purchasing Manager
is responsible for monitoring supplier performance and holds regular
review meetings with appointed suppliers. He works closely with
the Executive Chef or another designated senior chef to manage
food suppliers, and with the Operations Manager and other front-of-house
managers for beverage and souvenir suppliers.
9. Purchasing of food, beverages, souvenirs and some other
catering consumables is managed through a computerised system
that is an off-the-shelf product designed specifically for use
the in the hospitality industry (Check SCM). Other procurement
for CRS is managed through the House-wide system (HAIS). Both
systems are set up with agreed authorisation levels and system
users are unable to carry out functions for which they are unauthorised.
10. The CRS Purchasing Manager is responsible for supplier
management of appointed suppliers, ensuring that prices remain
competitive in the market-place, monitoring supplier performance
against contract, and performing periodic financial health-checks
of suppliers. This latter task has been particularly necessary
in the economic down-turn of the past two years, and despite this
proactive checking there have been several instances when previously
well-performing suppliers have ceased trading or suffered difficulties
in servicing the contract.
11. Chefs and managers working in the CRS operation cannot
do business with suppliers that have not been set up on the appropriate
system, nor can they place orders directly with suppliers. Price
re-negotiation is handled by purchasing staff. The only exception
to this is that fresh fish prices are re-negotiated weekly by
the Executive Chef's office to check availability, obtain best
market prices and plan menus for the next week accordingly.
12. The CRS purchasing and stock management system, "Check
SCM", is managed by the facilities finance team to reduce
the span of control of procurement staff.
13. Stores and cellar staff place orders for dry foods, disposables
and souvenirs, to ensure that stock levels are adequate for the
business; goods are issued to the kitchens and outlets against
an authorised requisition.
14. In the case of fresh foods, daily orders are placed on
the system by the sous chef for each kitchen or their authorised
assistant. The system produces a consolidated order, which is
then checked and placed by the purchasing team. The order is placed
with the most cost effective supplier within the framework unless
there is a recorded quality or other supplier performance issue
for the required commodity, or unless the lowest price supplier
is unable to fulfil the order.
15. Authorised Purchase Orders are then faxed to the supplier
by the purchasing team to confirm the order. The system provides
an audit trail of the procurement, and provides on-line documentation
for staff checking deliveries. Goods are receipted on-line and
charged to the appropriate kitchen or trading outlet if not delivered
to store. This process automatically updates cost prices held
in the system so that standard recipes and stock holdings are
re-valued on a 'latest cost' basis.
16. Receipted invoices are checked by food and beverage control
staff in the finance team to ensure costs have been allocated
to the right area, and that invoices are correct against the purchase
order. Credit notes are obtained for any overcharges, short deliveries
or rejected goods (usually due to poor quality or wrong item delivered/charged)
as noted by the person who has receipted the goods. Invoices are
not authorised for payment until any credits due against them
have been received. Invoices authorised for payment are transferred
electronically from Check to the House-wide system and then paid
by the central accounts payable team in the Department of Resources.
17. All other purchase orders are raised and authorised through
the House-wide HAIS system. This works in a similar way to Check,
but does not have the stock management and recipe costing functionality
of the catering-specific software.
18. An IT project has been initiated by PICT in response to
a request from CRS to review stock management and procurement
software commonly used in the hospitality industry. This is being
managed within the bi-cameral Facilities ICT Steering Group and
any replacement system will be installed in both Houses. Alternatively,
the House of Lords Catering and Retail Service may choose to install
Check SCM and more closely align their purchasing systems with
those used in the House of Commons.
Annex C
See additional written evidence at http://parliament.uk/ac
Annex D
CATERING & RETAIL SERVICES
PAY BANDS & GRADING—MANAGEMENT AND ADMINISTRATIVE
STAFF
| No. of Posts | Grade
| Job Titles | Salary Range
|
| 1 | SCS1A | Director of Catering & Retail Service
| £95,000-£100,000 |
| 1 | A1 | Executive Chef
| £56,584-£74,270 |
| 1 | A2 | Operations Manager
| £46,071-£61,255 |
| 4 | B1 | Food & Beverage Managers, Head Chef, Purchasing & Stores Manager
| £34,643-£42,401 |
| 6 | B2 | Catering Managers, Reservations Manager, Hospitality Manager, Business Support Manager
| £29,786-£41,601 |
| 11 | C | Asst Catering Managers, Asst Retail & Catering Manager, Banqueting & Events Coordinators, PA to Director, Kitchen Coordinator
| £22,579-£29,330 |
| 2 | D1 | Administration Assistant, Purchasing Assistant
| £19,198-£24,839 |
PAY POINTS AND GRADING—CATERING GRADES
| No. of Posts | Grade
| Job Titles | Pay Rate
|
| 2 | CGA1 | Senior Sous Chef, Pastry Chef
| £37,607 |
| 8 | CGA2 | Sous Chefs, Banqueting Weekend Duty Management
| £33,270 |
| 6 | CGB | Junior Sous Chef, Chief Steward/Back of House Manager, Butcher, Banqueting/Principal Floor Manager, Headwaiter
| £28,207 |
| 19 | CGC | Senior Chef de Partie, Cafeteria Supervisor, Head Linenkeeper, Head Storekeeper, Banqueting/Dining Room Supervisor
| £24,590 |
| 42 | CGD1 | Goods Receiver, Cellarkeeper, Storekeeper, Chef de Partie, Stillroom Supervisor, Souvenir Shop Supervisor, Senior Bar Attendant, Senior Room Service Assistant, Deputy Cafeteria Supervisor, Assistant Chief Steward, Catering & Retail Supervisor
| £21,697 |
| 62 | CGD2 | Storekeeper, Demi Chef de Partie, Bar Attendant, Dining Room Waiter/ess, Assistant Linenkeeper, Barista, CaféBar Assistant, Souvenir Shop Attendant, Stewarding Supervisor, Evening Shift Leader (7MB)
| £19,598 |
| 100 | CGE | Cafeteria General Assistant/Cashier, Kitchen Steward, Sotres Porter, Room Service Assistant, Linen Steward, Retail Assistant
| £17,554 |
| 21 | Commis | Commis Chef
| £16,174-£17,228 |
|
