Public Administration and Constitutional Affairs Committee
Oral evidence: Planning for the future of the Government's estates, HC 793
Tuesday 21 February 2023
Ordered by the House of Commons to be published on 21 February 2023.
Members present: Mr William Wragg (Chair); Jo Gideon; Mr David Jones; John McDonnell; Karin Smyth; John Stevenson; Beth Winter.
Questions 118 - 166
Witnesses
I: Geoff Lewtas, Director, National Trade Union Council (NTUC) Convenor, Public and Commercial Services (PCS) Union; Martin Kelsey, HMRC Group Secretary, Public and Commercial Services (PCS) Union; Amy Leversidge, Assistant General Secretary, FDA; and Garry Graham, Deputy General Secretary, Prospect.
Written evidence from witnesses:
– Prospect
- FDA
- PCS
Witnesses: Geoff Lewtas, Martin Kelsey, Amy Leversidge and Garry Graham.
Q118 Chair: Good morning and welcome to the Public Administration and Constitutional Affairs Committee. Today the Committee is continuing its inquiry into planning for the future of the Government’s estates. This session will focus on the involvement of trade unions in designing and delivering these plans, as well as examining the views of their members on recent Government initiatives in this particular area. We are joined by four witnesses today, who I am going to ask to introduce themselves for the record, starting with Amy Leversidge.
Amy Leversidge: I am Assistant General Secretary at the FDA union.
Martin Kelsey: I am the PCS Group Secretary with responsibility for HM Revenue and Customs.
Geoff Lewtas: I am from PCS. I am a senior national officer dealing with these issues at the centre. I am also involved in co-ordinating the six or seven separate trade unions represented under the umbrella of the national Trade Union Committee for civil servants.
Garry Graham: I am Deputy General Secretary of the trade union Prospect.
Q119 Chair: Thank you. I am going to put a question to you in the order in which you have introduced yourselves. The FDA has suggested that progress towards the target of relocating 20,000 Civil Service posts out of London has stalled. What makes you say that and what do you think lies behind it?
Amy Leversidge: Thank you very much for the opportunity to come and give evidence today. This is really important for our members.
Every year we conduct a survey of our senior civil servants, of those members, and we have asked a question for a number of years now about the progress of Places for Growth. I have submitted evidence to the Committee about the 2022 findings. I can tell you today about our 2023 survey results.
Lots of our members have said that there is little progress going on, and I am sure we will explore this later on in the Committee around what our national officers are saying about negotiations locally. In terms of our senior civil servant members, in the 2023 survey only 14.1% said that they were highly engaged with the Places for Growth proposals—so you have well over 85% saying they are not engaged—8.9% have been asked to volunteer to relocate to a location outside of London, and only 3.6% have relocated in the last year. In terms of the actual progress, there seems to be quite little made.
As a union, we are quite positive about Places for Growth. We think it is a good initiative and we think it is a good initiative to place Civil Service roles outside of London. It has been a long-standing issue in posts that are outside of London. Because there are so few SCS posts there, careers stall and you cannot progress. We are more than happy for SCS posts to be moved, but one of the problems is that the centre of gravity of every Department is the Minister. If the Minister is not based outside of London and they are still working in the London office, the SCS posts will be drawn back into London to go and brief the Minister and to advise the Minister for the Minister to make decisions.
Q120 Chair: Do you think that is the central reason as to why there has been a lack of progress?
Amy Leversidge: I think that is one of the reasons why. I don’t think it is the only reason, but certainly that is a big part of it. If you are a senior civil servant, it is a superficial move. Even if you move outside of London, if you then have to travel back into London to go and brief the Minister, the fact that you are notionally based outside of London becomes meaningless if you are travelling back into London. That is an incredibly superficial way to do it. Ministers do need to be meaningfully working in Departments outside.
Our evidence so far from our members is that it seems to be that when Ministers go outside to the second headquarters or to the different offices, it tends to be as visits. The impression that I get is of people going around the office saying, “Thank you; aren’t you doing a good job?” rather than actually working from the office. There are a number of other reasons why I think it has stalled, which I hope we will be able to explore.
Q121 Chair: Do the rest of our panel have anything to add as to other reasons why there might be stalled or slow progress on this agenda?
Martin Kelsey: One of the things that has been on everybody’s radar blip from the middle of last year was the announcement by the then Prime Minister about the prospect of 91,000 job losses across the Civil Service. When you drop a bombshell like that into the millpond, that changes a lot of people’s thinking at a strategic level. I think what has happened is that that seemed to go away a bit with the first change of Prime Minister but, from what we understand now, the possibility is starting to re-emerge again.
Certainly, speaking from an HMRC perspective, when the original announcement was made about reducing the Civil Service to the pre-pandemic levels, we are broadly already at the pre-pandemic levels, so any proposals to reduce the size of HMRC still further would have a major material impact on the organisation’s ability to deliver on its fundamental tax-collecting and customs responsibilities.
Q122 Chair: Do you think that that particular prospect at the time was responsible for stalling any moves at senior levels because those senior civil servants were perturbed by what might be coming down the tracks?
Martin Kelsey: From the engagement that we had from a PCS perspective with the SCS, certainly the proposal on the 91,000 seemed to eclipse a lot of thinking around departmental planning, so it is hard to believe that it would not.
Q123 Chair: Do any other members of the panel want to add to this?
Garry Graham: First, for those of us who have been around for perhaps too long, the moving of jobs outside London has been a cyclical announcement of parties of all different hues. I think there is an understandable concern as to the longevity of this policy and the consequences of it.
Also, I do not think the objectives of this policy have been articulated. There are clearly tensions between the hubs policy and Places for Growth and the closure of regional offices. However, what has not been articulated is a vision for the Civil Service, how it should operate in the future, and what having bases in the regions actually means to policy development, policy delivery and policy evaluation. There has not been a clear vision with regard to that.
The announcement on 13 May, via the front page of the Daily Mail, that 91,000 civil servants were to lose their jobs—I have never seen any other employer operate in that way—would obviously cause people concern and give them concerns about making long-term decisions that might involve uprooting their family. I think that all those issues combined have led to a rather sluggish approach to this.
Finally, when this was presented to the unions, a sign of the political commitment to it was that we were told that Ministers would have offices outside London. We were told that there was significant appetite and enthusiasm for that, but we have no evidence of that happening and I am told to stop smiling and laughing every time it is raised by an official.
Q124 Chair: Mr Lewtas, do you have anything to add?
Geoff Lewtas: Very briefly, from experience—Amy put her finger on this—there is this whole question about senior civil servants who are regularly required to brief Ministers. That is going to happen in London. It is not going to happen 200 miles further north or west. It is just not the experience.
The experience goes back a long way to, for instance, when the Quarry House development in Leeds became a reality. There were quite a number of senior civil servants who took posts in Leeds. There were also Department of Employment people in Sheffield who were at the senior level. Their experience was that often they would spend half their week in London because Ministers required their presence, their knowledge and their input in decisions that Ministers needed to make. That is all perfectly understandable, but it does raise questions about the nature of this proposal regarding Places for Growth.
The other thing that I would say about Places for Growth is that it is unbelievably haphazard. It is based on individual Ministers in their Department largely deciding where that new location will be. It has raised questions that have led, I think, to a degree of cynicism about the motivation of Ministers in the choice that has been made.
Q125 Chair: This is a quick-fire question to you all, again in the same order. It develops your point, Mr Lewtas, on the extent to which Departments are consulting unions over which posts are being selected for relocation and where these posts are to be located to.
Amy Leversidge: I am not sure that trade unionists do quick-fire questions—we are all talkers—but I will try my best.
One of the problems that we have, and we have touched on it already, is the dysfunctional nature of strategy making in the Civil Service, in that you have Places for Growth here, then you have pay here—and this is trying to go from the centre—and then you have delegated employers doing their own thing. You have all sorts of different strategies going on. We touched on it before with the 91,000—the cuts.
The two key ways that they are going to deliver Places for Growth are by trying to relocate civil servants who are working in London outside to second HQs, or through recruiting. All new recruitment will be based outside of London, so it will be advertised in the Wolverhampton office or the Darlington hub and all those sorts of things.
Once the decision was made to cut 91,000 jobs, recruitment was then frozen, so you are not advertising those new posts outside of London. You have already lost one of your levers that you pull in this process, so you are left with just trying to relocate. They have already made it harder for themselves.
The constant drumbeat that we have as Civil Service unions is that all the strategies—first of all, they are not very strategic at all with the Civil Service, but nothing adds up with each other. We discuss Places for Growth, but that does not relate to what they are doing with pay. That does not relate to what they are doing with Civil Service numbers. However, all those things will have an interaction with each other.
One of the things that you might be thinking is what we have at the moment. The bigger concern for civil servants is not that they are going to be looking to move outside of London; it is that they are going to be looking to leave the Civil Service. From our members’ point of view, they can get far more salary in the private sector than they can in the Civil Service. That is the bigger tension, how you keep people in the Civil Service, not necessarily how you get them to move. You have all these different strategies that are going on.
In terms of our local negotiations, it seems to have stalled. It is on the agenda in meetings but it is not really being discussed in a meaningful way. As I say, as new posts are advertised we will make sure that they are advertised with an outside-of-London location, but if your aim as a Department is also to cut posts, you are not really going to get the big numbers that you need. This is where it is completely stalling.
Chair: You are speaking very clearly about a tension or, indeed, a contradiction.
Martin Kelsey: There have been some discussions but nothing robust or clear on where things are going. One thing you have to remember about HMRC, in particular, is that we are most of the way into a massive relocation programme. Back in 2015, when I first got this pitch, we had 170 offices up and down the country. One by one those offices have been closed. We are most of the way through that programme now. Those offices have been replaced by regional centres in parts of the UK that someone in London has heard of. We have a big regional centre in Stratford in east London now. We have a big regional centre in Croydon, to the south of the city, and obviously we still have our Parliament Street base. Beyond that, HMRC offices are based around the United Kingdom anyway.
What I will say, picking up the strategic point, is about things we have lost through the move to regional centres. Leaving aside thousands and thousands of years of experience through redundancies—in one year 17,000 years of experience went on redundancies in 12 months alone—one of the things we have lost is expertise in particular fields.
We closed offices in the north of Scotland, for example, where we had particular expertise in the oil and gas industry—the oil and gas industry that is now making obscene profits that we could be taxing, some would say. Fundamentally, the move out of London is not quite as clear cut with HMRC as it might be for some Departments because we already have that major presence through the regional structures across the United Kingdom.
Geoff Lewtas: The point to emphasise is that these are haphazard and each one seems to be a decision by a particular Minister. No doubt, there has been a degree of consultation internally within government, but it does not seem to have resulted in anyone suggesting that a more strategic overall approach to the Places for Growth programme needs to be taken.
Quite where the figure of 22,000 comes from is a bit of a mystery. Whether the outcome will add up to that figure is uncertain and, frankly, the level of consultation that we have had has been very poor. We have been told rather than consulted about the decisions that Ministers are making, with no opportunity to express views to the contrary or to question what factors were involved in the decision that was taken. It is very unsatisfactory from our point of view, particularly when the threats to individuals, their careers and their families can be quite severe in terms of their hopes for the future.
Garry Graham: If I can just build on that, you have a flavour of the fact that what we are seeing is very much a piecemeal approach. It is not joined up and it is still operating in siloes—very much so. I go back to my point about a vision. There is no vision. They are, rather, shifting individuals. This is having a direct impact on people. Prospect has members working in the HSE, working in London, who have been told that if they want to progress, if they want to apply for vacancies, if they want to apply for promotion and there is not an operational demand that that job is in London, the only way they can realise those aspirations is for them to move out of London. Quite often they will have family circumstances and whatever that makes that impossible.
Sometimes Places for Growth is presented as being agnostic about location, but it is not agnostic about location—or it can be agnostic about location, as long as London is not the answer in terms of where certain posts are. That inevitably will lead the Civil Service to lose skills and experience in a number of areas that are important and critical to organisations.
Q126 Chair: Thank you. I am going to focus on the FDA survey, with an overarching question on that. How realistic is the Government’s target for the proportion of senior civil servants based in London to go down to 50% by 2030? I think your survey of FDA it said that 63% of senior civil servants who responded said they would not consider relocating outside of London.
Amy Leversidge: In this year’s survey, 16% said that they would consider relocating. That is not a high number, but it is not a bad number if every single one of them decided that they would relocate, because you do not need everybody to do it. That number rises to 23.9%—almost a quarter—if they thought that there were career opportunities in relocating. I think that is the key for the senior Civil Service, making sure that their career can still go ahead if they do consider relocating.
Coming back to my earlier point around the Minister being in London, that is the main thing. If your job is to brief the Minister or you know that the trajectory of your career, if you want to go on to be a Permanent Secretary or anything like that, is going to be based on how high profile or how seen you are by the Minister, you might think that the career opportunities are far greater staying in London.
I do not think that we can divorce this from the various comments that we have had from Ministers, the ministerial attitudes that we have seen, around hybrid working and people working at home. We have seen a number of very high-profile comments in the media, and even in the offices directly to civil servants, from Ministers who are walking around offices and putting notes on people’s desks and making comments around people not being in the office. That is giving the impression that, if you are not directly seen by a Minister, you are not getting on with your job and you are not working as hard as those who are in the office. That has been followed up by a deliberate policy by Departments, driven by these ministerial attitudes, to have a certain proportion of staff in the office at any one time, which is an arbitrary number.
We do have examples of where there have been quite good employment relationships in some Departments. The Department for Transport comes into my mind as having very good employment relationships. It has worked out the hybrid working, and that has been done because the Minister is quite pragmatic about when you can work at home, when you can work in the office and when it is good to work in the office, and they have not been making those types of comments.
When you have this attitude of, “Unless I can see you, unless you are right in front of me in my office, you are not working hard and you are not working as hard as the people I can see,” that is a disincentive to then think, “I am going to move to the second headquarters where I know I am not going to be seen”.
Chair: That is helpful. Thank you all very much. I am going to hand over to David Jones.
Q127 Mr David Jones: Mr Lewtas, as we have heard, the Government have abandoned the target of a reduction of 91,000 members of staff, but the Chancellor of the Duchy of Lancaster recently told us that it was still Government policy to reduce headcount in line with cuts to departmental budgets. What is the Cabinet Office telling you about the size of the headcount reductions that the Government are pursuing now?
Geoff Lewtas: If I was here shortly after a meeting that we have with the Cabinet Office on Thursday this week, I might have a better clue. What we do know from the reports we have had of what Oliver Dowden—the Minister you quote—was saying is that, while the 91,000 target has been taken off the agenda, there is still an intention to find large numbers of job roles being lost across the Civil Service generally; in most Departments, I would guess. We cannot put any more flesh on that position until we know.
Towards the end of last year, all Departments were asked to give their views and plans for achieving efficiency savings, and those reports were received by the Cabinet Office around about the end of January. The Cabinet Office has been putting that together into an overall position, and we expect to hear more detail on Thursday of this week. We meet with the Cabinet Office regularly every fortnight on major issues, and this is one of them, and we are programmed to get a clearer view at that stage. I am happy to feed that into the Committee subsequent to that meeting, if that is your request.
Q128 Mr David Jones: Yes, please. Were you consulted on that 91,000 figure?
Geoff Lewtas: No. Originally, it wasn’t. I think the Cabinet was meeting somewhere outside of London on the day that it came to a decision—when Boris Johnson was Prime Minister—and it came completely out of the blue as far as we were concerned. There had been a bit of rumbling about the possibility, but certainly no information and no consultation with unions about that target.
Q129 Mr David Jones: What was the rationale given for that headcount reduction?
Geoff Lewtas: The original rationale was a view that now that Brexit has been achieved, we can go back to the level of the size of the Civil Service that existed prior to the 2016 referendum vote. That was a figure of about 380,000 civil servants. We currently have roughly 470,000, and that is where the 90,000 difference emerges, from that examination of those historical figures.
Q130 Mr David Jones: Mr Graham, did you want to add to that?
Garry Graham: It was one of the most extraordinary announcements that I have experienced in decades as a trade union official. Not only was there no consultation with the trade unions, but what became readily apparent over the hours of that Friday, and then into the following week, is that there had been no engagement or consultation with Departments or agencies at all and there was no plan.
When we met with the officials on Tuesday, as you would expect, beyond expressing our views with regard to the announcement—and particularly the manner in which it was made—we asked them what the proposals were, what it was that the Government were going to stop doing, all these kinds of things. There was no clarity at the centre and, certainly, there had been no prior engagement with Departments and agencies in the lead-up to the announcement.
As a trade union official, I had employers phoning me up on that Friday asking me, “Garry, what the hell is going on here?” That led to the situation, after the announcement, of Departments and agencies being required to come up with plans for headcount reductions varying between 20% and 40%. No, there wasn’t any engagement. There was no consultation on it and there was no plan. It was a figure plucked out of the air.
Q131 Mr David Jones: Ms Leversidge, did you want to add to that?
Amy Leversidge: Yes. To add to the comments about how ill-considered this was, there was no plan here and no consultation with Departments about what could actually be delivered. We still have members, senior civil servants, who are trying to deliver for their teams, unable to recruit when people leave, but their workload does not go down. One of the key points that we have been making is that it is for the Government to decide the size of the Civil Service.
If they want to have a smaller Civil Service, that is their decision. Correspondingly, they also need to work out what their priorities are for the delivery of public services, because they cannot expect everything that was delivered with over 400,000 civil servants to be done with 91,000 less. They need to cut those priorities, and we have not seen that happen. We have people who are trying to deliver and working more and more hours to try to deliver to make up for the people who are leaving.
This is now having a poor effect on the whole Civil Service. You have people leaving who have had enough, working far more hours and getting far more pay in the private sector, “I am going to leave”. They then leave, which creates more workload for the ones remaining, which then creates a downward spiral. That would cut your numbers, so you would reduce your civil servants, but that is not necessarily the civil servants that you want to cut. They are the people who are going because they can get a job elsewhere. There is no overriding strategy about that. There is no workforce planning.
Q132 Mr David Jones: Has the announcement of reductions in the size of the Civil Service had any impact on Departments’ plans to relocate to regional offices?
Amy Leversidge: Only in how I was describing it earlier. The way they are trying to do that is by recruiting new civil servants and putting the posts in the Wolverhampton office, Darlington or wherever. If you cannot recruit new civil servants, you cannot advertise them as being outside of London, so it makes it more difficult for them. It is a lever that they do not have to pull of saying, “We will do this through natural wastage, and as people are leaving we will recruit outside of London”. You can make quite a big change just by doing that over a period of time, but if you are not recruiting, that is something you do not have any more—a lever that you do not have to pull.
Q133 Mr David Jones: Is there a concern among your members that if they do move to a regional office, they may be at risk of seeing their post abolished as a result of the drive to reduce Civil Service headcount?
Amy Leversidge: I will be honest and say that people have not come up with that as a concern. At the moment, if people are concerned about their jobs, from my members’ perspective if they are concerned about their job, they are just looking for jobs outside the Civil Service. They are not looking at relocating inside the Civil Service. This is going to be a real problem.
We saw this with the Institute for Government’s Whitehall Monitor figures that it released just the other week, where turnover in the Civil Service is now the highest it has been in a decade, at 13.6%. That is a dangerous position to be in. If people are leaving because of pay or because of workload and those sorts of pressures, you do not get to choose who goes. It will be the people who can get jobs elsewhere, which might not necessarily be the people who you want to lose.
Q134 Mr David Jones: You clearly think that there has been an impact on morale.
Amy Leversidge: From the 91,000 announcement, absolutely. That is not in a silo. If it had just been that and then nothing else, it would not have had as damaging an effect. That has added to the constant drumbeat that we have had since 2016 of attacking civil servants and the Civil Service impartiality. We have had those. We obviously have all sorts of issues going on around ministerial behaviours. Like I say, we have the incoherent workforce strategy. We have had pay restraint for over a decade. There are all sorts of issues there. When you add that together, it is having an incredibly damaging impact on morale and motivation.
In the last survey that we did of senior civil servants, people who have worked for the Civil Service for 20 or 30 years said that they had never seen it as bad as they do now. Lots of them said, “I have always envisaged that my future career is going to be going to DG or becoming a Permanent Secretary. Now I don’t see that I am going to be here in the next couple of years, because it is such a bad place to work now”.
Q135 Mr David Jones: Would you say that there has been any impact on productivity within the Civil Service?
Amy Leversidge: From what my members are telling me, the biggest impact on productivity in the Civil Service is the inability of Ministers to prioritise, and everything feeling very urgent: “We need this done and we need it now. That is the priority, and it is urgent”. We will go and do that, but then that plan will fall by the wayside, and then we will do something else and then something else.
One member described it to me as being almost like the Department has ADHD, in that it is just completely chaotic and there are no priorities being set. I would say that that probably has a bigger impact on productivity—that you have people working towards priorities that never come to fruition because the Minister will just change on a whim.
Q136 Mr David Jones: Do any of the other witnesses have anything to add?
Geoff Lewtas: Yes. When that announcement of 91,000 job cuts came along, it was in a setting where we had already had 10 years of undervaluation of civil servants in terms of their pay and their prospects and careers.
I am sure you know that there is a major industrial dispute occurring now involving PCS members across a wide range of Departments related to problems of pay, pension contributions and the handling of redundancies. This announcement of job cuts is seen as a fundamental attack on the Civil Service and, ultimately, its ability to do the job that people want it to do.
The vast majority of civil servants are in operational occupations. They are not policymakers. They have a job to do. They are given that job and they carry it out to the best of their ability. They are feeling disgruntled. Their morale is low. The approach that suddenly they are going to do the same work with a cut of more than one-fifth of the workforce was unbelievable and could not be accepted as anything coming from a sensible Government.
Garry Graham: I think this has had a devastating and ongoing impact on staff, taking into account the absolutely crass way in which it was done: the announcement via the front page of the Daily Mail that the Civil Service was to reduce by 91,000 by 2025. What shocked me—and I have been around a bit—was the absolute lack of any analysis or evidential base to sustain these figures in this way.
We need to bear in mind that this came at a time when the Government were coming forward with proposals that they wanted to consult on to reduce redundancy terms as well. A decade of austerity in the Civil Service; pay lagging behind not just inflation and not just earnings in the private sector, but pay increases in the wider public sector; the announcement that the Government want to get rid of one in five staff; the announcement at the same time that they want to slash redundancy terms as well—I think that has had a devastating impact.
I listened very carefully to what the Minister said to your Committee when he gave evidence. I think what he said was consistent with the advice that we had been giving to members that, while the central targets may have gone, you would be naive to think that significant job losses are not potentially on the horizon here. The Minister made it very clear—he was in the Cabinet, I think, that made that decision about those levels of job losses—that he was not distancing himself from the 91,000 figure, and that he believed those levels of job losses were consistent with what was going to be the outcome with regard to departmental budgets. He might have been slightly more urbane than the screaming headlines of the front page of The Daily Telegraph, but he did not assuage any concerns that I or we had about potential job losses of this magnitude for the Civil Service.
Job losses, threats to redundancy terms, and what has happened on pay are the extraordinary reasons behind the fact that Prospect, for the first time in more than a decade, is balloting a significant proportion of our members working in the Civil Service and wider public sector on industrial action. That is not something that we do lightly and not something that we do regularly, but something that certainly has a resonance with the members we represent.
Q137 Beth Winter: You have all touched on the impact of austerity, the cost of living crisis, pay restraint and pay cuts, which I am going to explore a bit further. Ms Leversidge, is London becoming too expensive, particularly for senior civil servants, and is there any truth in certain elements of the media with maybe a certain political persuasion claiming that senior civil servants want to move to cheaper housing and villas in the north of England, as an example?
Amy Leversidge: I do not have any evidence of that coming from our members, but I can tell you about our fast stream members. They have voted to take industrial action. That is the first time in history that we have ever balloted our members of the fast stream. As you all know, the fast stream is the graduate development programme. This is not a group that you would traditionally think of as even contemplating industrial action. As Garry very rightly said, for all our members as public servants it is an agonising decision to mark that X in the box to take industrial action. To do it for the first time in history with a group of people who are recent graduates, new to the Civil Service—it is extraordinary that we have got to the point where they are taking industrial action.
The reason we have done that is because of chronic and long-standing issues with the pay structure, the way that the fast streamers are paid. Their salary starts at around £28,000, and this is the converse to the Places for Growth agenda. Fast streamers go on placements. They go around different Departments, and they tell us that they are terrified of being placed into London because of the cost of housing. Just with the nature of their role, they would be in rented accommodation as they move around.
They speak of being terrified of going into London. They have to rely on their parents for handouts. These are grown adults doing a professional job, and they have to rely on loans from mum and dad to get them through, which obviously depends on whether or not your mum and dad can actually help you to do that. They talk about skipping meals to get through the day.
This is our lowest paid section of members. These are the people who are most enthusiastic. These are the people who are going to be the future Permanent Secretaries, the future leaders of the Service, and they are so disgruntled that they have voted to take industrial action. Our mandate was quite overwhelming. We had a 60% turnout with 88% voting in favour of taking industrial action.
Fortunately, subsequently, the Cabinet Office has entered into some negotiations with us, and we are quite hopeful and positive that we can sort out the pay structure for this group of members. We have not announced any days of strike action and we hope that we will not have to ask members to do that, but certainly from our perspective that is the biggest group that really do have an issue.
Again, in the Institute for Government’s Whitehall Monitor, we have seen the value of Civil Service salaries drop by over 20% in some cases. That is unsustainable for anyone. We have this moment in time where we have high inflation and the cost of living crisis, which is hard to withstand, but that is following on the back of 10 years of pay restraint, which has left people with their wages of far lower value than they were before, which is simply unsustainable. What we have is people, as I say, looking to go elsewhere, looking to move to the private sector. For some of our members, they could probably double their salary if they went into the private sector.
Of course, I do not need to tell you all that civil servants are motivated by public service and their commitment to the Civil Service. They love the work that they do, but I have members saying to me, “I cannot justify this to my family any more. I love my job, but I have to try to raise my pay because it has literally not risen; it has stayed where it was 10 years ago”.
Q138 Beth Winter: When people are relocated, what happens to their pay, do we know, in terms of any relocation packages?
Geoff Lewtas: There is a model relocation policy that talks about the expenses package, and it relates solely to Places for Growth. It does not relate to other ongoing or normal types of changes that occur. It puts a maximum of £14,000 on expenses. It does not allow for any of that money to cover stamp duty costs, which can be considerable in cases where you are looking at the medium to higher house price levels.
I should add in detail that there is usually a mark time pay arrangement, which will last for at least a few years so that people’s pay does not deteriorate. Normally, pay outside London is lower than the pay for London by at least a few thousand pounds a year, which can be quite a big difference to many people. There are mark time pay arrangements. They tend to be worked out in detail at departmental level, so they do vary a little bit, but that is available.
What this package does not do is to provide, frankly, any serious incentive to encourage people to move out of London. They may well be in a situation where they are struggling considerably with accommodation costs in London, and I know many of our members would feel themselves very fortunate if they could ever get to the stage of being able to buy a property. They are forced to rent because London costs are so high, and the thought of getting a mortgage is impossible for them in many cases.
Q139 Beth Winter: Do we know anything about figures for civil servants in receipt of the minimum wage, and the impact? I know that PCS recently did a survey with some staggering results on food bank usage, with one in 12 civil servants using food banks.
Martin Kelsey: In terms of the minimum wage, I am glad you asked that question. We are in a position in HMRC where, come next April, 19,000 members of staff in HMRC will effectively be on the minimum wage. That is around 30% of the workforce on the minimum wage. This is the Department, as I said earlier, that is responsible for bringing in the money that runs every public service in the land, and nigh on a third of them will be on the national minimum wage come April.
You mentioned London, and obviously with the increases in the national minimum wage, that is catching up with particularly our lowest two grades, where the impact is going to be even greater on them. As a general rule, even taking London out of the picture for a second, if you move work out of London into the regions, particularly in some of the more junior grades, the pay is so poor that there will be zero incentive for people to move.
You are talking about asking perhaps young families to up sticks and move to another part of the country. If it was, “Up sticks and go to another part of the country where there is a decent amount of pay on offer,” they might be a little bit tempted, but the reality is that that is not the case. The reality is that pay levels have deteriorated across the Civil Service to such a degree that it is now firmly entrenching itself as a minimum wage employer.
Garry Graham: You raised a good point around housing and the cost of housing. Our most recent analysis for the members we represent is that pay has fallen in real terms by around 26% over the past decade or so. As most people are familiar with, housing costs have gone up faster than the rate of inflation for most people. With housing costs, the ability to buy a house is an aspiration of dreams for many of our members. They are just not in a position to do that. That is not just limited to London and the south-east.
In terms of relocation, historically there has been the idea that staff will flock to move out of London because they will have the dowry of the house that they sell in London and be able to buy themselves something larger outside London if they relocate. For many of our members working in London and the south-east at the moment, the ability to buy is not there and has not been there for a significant amount of time. That incentive that there has been in the past simply is not there for people.
Q140 Beth Winter: Thank you. Can I very quickly have a brief supplementary? As we have been talking about the cost of living pressures, there has been a consistent failure to institute a single pay bargaining process. How concerned are you about that?
Martin Kelsey: Massively concerned, because there is a huge differential between the Departments on how they operate their individual pay structures. The irony is that the only thing that seems to be bringing harmony to it at the moment is the national minimum wage, where the lowest grades are being picked up by that. Across the other grades, there is a huge disparity between the various Departments, the different pay scales, the different terms and conditions of service.
The irony is that 30 years ago we had a common set of pay and conditions of service across the Civil Service. We had one group of people on the official side and one group of people on the trade union side who would negotiate on the pay and conditions covering absolutely every civil servant in the land. Now that is replicated in every single Department and every single agency up and down the country.
When the Government talk about efficiency savings, they operate a system that is the opposite of making an efficiency saving. It is creating a replication, a duplication of effort. All the time, the Treasury and the Cabinet Office hand out instructions as to how those negotiations should be operated, but they still have to be operated; they still have to be conducted agency by agency, Department by Department. It makes no sense whatsoever.
If we could have that commonality of pay and conditions returned, particularly as we move towards a situation with government hubs, where you have different employers in the same building, you will get to a position where people will not have to move towns to look for a different job. They will just have to go up a couple of floors to another Government Department that is paying a different rate of pay. You are then in the position where Departments are competing with each other for the same pool of staff. That is not a sensible approach when it comes to maintaining a workforce.
There will always be traffic, people applying for sideward moves and stuff like that, but if you accentuate that through different rates of pay and differing terms and conditions of service, you are creating a competitive internal economy that is not improving the way that the Civil Service operates; it is hampering it.
Chair: Thank you. John McDonnell has a supplementary question.
Q141 John McDonnell: Do you have a figure on how many bargaining units there are now?
Geoff Lewtas: There were always well over 200 of a size. There is a galaxy of another 500 or 600 tiny organisations that are arm’s length bodies, many of which disappeared about 10 years ago but many of which still exist. We tend to deal from a PCS point of view with about 200 or so, all separate negotiations. As Martin rightly says, the moving of many civil servants into regional hubs or regional centres is starting to make even more of a nonsense of that separation, that difference, that lack of coherence of pay arrangements in the Civil Service.
Amy Leversidge: I completely agree. In the Civil Service we have such a dysfunctional and chaotic system for our pay, and this has been made even more so—we have spoken about all the different arrangements we have. We have 200 bargaining areas, so we have our meeting in the centre to discuss the remit guidance, but we do not get to discuss the percentage on there, and then we go off and we have all these different separate conversations going on. It is completely dysfunctional.
This is exacerbated by the fact that we have had pay progression across the vast majority of the Civil Service completely stalled for the last 10 years. This is why PCS has the issue that people are stuck on the minimum wage because they have not been able to progress up their band. They have just been frozen at the bottom. We have this all over the Civil Service. This has a massive impact.
We have a number of members who are managing people who get paid more than them because they have leapfrogged over them. It is a completely chaotic system. You have a cap on promotion of 10% but if you come from the private sector you can negotiate a higher salary. You have all sorts of issues there that we think at some point are going to start to cause equal pay issues.
To give you an example of where this makes it quite chaotic for Places for Growth, you have the Cabinet Office that has a second HQ in Glasgow. Its top of the grade 6 salary for the national pay scales is around £65,000, but the Scottish Government, who have not been constrained by the remit, have a different percentage and there is a lot more negotiation that goes on. The top of the comparable band is up at £79,000.
If you took the option as a grade 6 to think, “I will move out of London and I will move to the Glasgow second hub”, why would you not at some point start to look at Scottish Government, a Civil Service role where you could be doing exactly the same thing and get a massive pay rise to move over? You almost then have really perverse incentives that go on. As Martin and Geoff have both said, if you are in exactly the same hub and you think, “I could get paid far more if I was working for this Department rather than the Department that I am in, and then if I moved back I can negotiate a better pay increase”, you have all these different odd consequences that are occurring from this dysfunctional and chaotic system.
Garry Graham: Just briefly, it is not just about the pay delegation, because you need to look at these issues and think: who is the controlling mind with regard to this? The controlling mind in this context is the Cabinet Office and the Treasury. The constraint in the remit guidance so organisations could pay up to 3% in a context where inflation was going into double digits has made local discussions meaningless. We have had employers say to us that they can afford to pay more and they want to pay more, but they have been stopped from doing that by the Cabinet Office.
I am sure that when you next meet with the Cabinet Office Minister, he will tell you that organisations can submit business cases for pay flexibility to go above the 3% contained in the remit guidance. Our experience has been that it has been easier for a camel to get through the eye of a needle than it has been to get through the pay flexibility business case process. To give an example of that, we have an area covered by the remit guidance that has an April settlement date of last year that is yet to get its business case agreed by the Cabinet Office.
This is a systemic pay and award issue about fragmentation and not just delegation, and about developing pay systems that enable people to build their careers not just within Departments but across Departments and agencies as well.
Q142 Karin Smyth: If we look at when things get reversed, we are interested in understanding the impact of the closure of regional Government offices and the concern about people’s jobs being moved back to London. Specifically, what concerns were raised by members when the Government offices were closed or BIS Sheffield, for example? Mr Graham, you said earlier about long-term decisions and that fear about it being reversed. Do you want to start with that, Ms Leversidge?
Amy Leversidge: Yes. Garry hit the nail on the head earlier when he said that if you have been around for a long time—if you have worked for the Civil Service for a long time—you see these changes go around and then you think, “It is just going to go around again. I just need to hold out”.
When we are talking about relocating and uprooting your whole family and moving to a different office, you have to be reasonably sure that that is going to be something that is long term or sustainable for you, that that is not going to be a decision that is then reversed in a few years’ time and then you are thinking of going back. We all know that if you move out of London, you are probably not going to be able to move back, because the house prices rise so quickly. It is a very big decision. If you are within commutable distance of London—if it is, say, Wolverhampton, Birmingham or what have you—why would you uproot your whole family? You can just commute to that office and commute back and still live in London.
People have long memories about what has happened in the past. We see this a lot around machinery of government changes as well, where we have had Departments merge. These things take a long time to bed in, and you have different people working with different terms and conditions and things like that. It does take a long time. When you fear that it is only a short-term decision, why would you make those decisions?
Q143 Karin Smyth: Does anybody want to comment on that particularly—the lack of confidence about moving in case you move back?
Geoff Lewtas: On your question about the closure of regional-based Government offices, which was quite some years ago—I cannot remember exactly when—I think that that came along, very disappointingly, from the fact that Government at that time abandoned regional development planning and the effort to see regions and focus on regions and their needs and wants and what was possible. That disappeared along with other structures that were helping to support it. I think that was a very backward step and did damage the ability of the Civil Service to have an involvement in those important processes. As far as I know, there is clearly a focus in Scotland, Wales and Northern Ireland, but in terms of the English regions that is no longer there.
Q144 Karin Smyth: I know in my own area of the south-west people did find other agencies to move to and not relocate back, and time moves on. Do you feel that that is still a barrier to devolution, which is also an interest of this Committee, in terms of people’s confidence to move to other regional authorities?
Geoff Lewtas: There were certainly many people who thought that the Government offices were something of a springboard for regional government. Clearly, the thinking at the time was that that was no longer a priority, and it was dismantled and has disappeared. I do not think that anything has been suggested, whether it is part of this so-called levelling-up programme or any other Government initiative, to effectively replace it.
I do think that it says a lot about the concern of people outside London and the south-east about the lack of development. It is something that, in my view, is a commitment that you have to persist with and ensure is continuously developed and improved as time goes by. Otherwise, it is all lost and there is no focus at all.
Q145 Karin Smyth: Would you say the institutional memory is quite long in that respect? Even for younger people coming through, that confidence to move out in the case that it might either disappear or move back still stays with the Service.
Geoff Lewtas: I think that there is still an ambition that the Civil Service would be all too happy to pick up on if the willingness and the resources were provided.
Karin Smyth: Mr Kelsey, I can see you want to come in.
Martin Kelsey: Yes, very briefly, picking up on that stuff about regional government and joined-up government. It is safe to say that there is no joined-up thinking now. We had a position back in the end of 2021 where everybody in HMRC got an email from the Secretary of State, the Department for Levelling Up, Michael Gove and his Permanent Secretary, trumpeting the new office and the new site in Wolverhampton. A big statement was made that civil servants will no longer need to relocate to find work in the Civil Service and there it is; it is nice—trumpeting the new site in Wolverhampton. It went to all our people in HMRC, including the people who were forcibly relocated from Wolverhampton a year or so earlier.
I cannot imagine that Government Departments go, off the top of their heads, “I’ll tell you what, we will move to Wolverhampton next year”. I presume that there is some thinking and some policy development that goes into those locations. I may be being charitable there. If one Government Department has announced six years earlier that it is going to move people out of Wolverhampton, and another Department has plans to set up an office in Wolverhampton, surely it makes sense for somebody somewhere to talk to somebody and say, “We have a bunch of people here who might be made redundant. We are going to need a bunch of people here to do this Civil Service work. Why don’t we talk to those people and move them over the road, and problem solved?”
The reality that we faced was that there was less than a year, I think, if failing memory serves, between the one closure and the other opening being announced. The net result was that an awful lot of those people took redundancy and all that expertise was lost. First, it does not make fiscal sense because you are spending money you do not need to spend on redundancies. Secondly, it does not make practical sense because you are losing the skills of those people.
Civil servants are a pretty adaptable bunch. You saw what happened during the pandemic; in our own Department, the coronavirus job retention scheme, the SEISS scheme that helped to keep the economy afloat, was done from people’s kitchen tables and bedroom tables. All that work was done, and that was because people were able to be adaptable to do that work. Somebody, I would suggest, who had been a civil servant in HMRC could readily adapt to being a civil servant in the Department for Levelling Up if that opportunity had been given to them, but there was no joined-up thinking. Going back to those days of the Government offices for the regions, that is the sort of thing, I would suggest, that would have been picked up. Somebody would have had that conversation.
There are supposed to be committees of civil servants where, whenever there is a large scale of redundancies, somebody talks to somebody else and those things get resolved, but that does not seem to happen. The fact that it does not happen means that there is something wrong with the system. It needs a complete overhaul if we are going to avoid such a thing happening again.
Q146 Karin Smyth: One would assume—I think we have seen this in the south-west, in my area—that many of those people who then take those redundancy packages do not end up disappearing. Many of them end up back in some of those other jobs. As trade unions in those discussions, you would be happy to talk to people about transferring across and facilitating that?
Martin Kelsey: Yes, we have redundancy mitigation talks. It is not as good as the old model redundancy agreement that we used to have, but we do have a mechanism whereby in any redundancy exercise, we engage with the employer, and we explore alternatives for redeployment and try to get those people who are facing redundancy an alternative posting.
By and large, though, while little introductions can be made, the reality is that it is still down to the ordinary worker to try to arrange their own redeployment, almost. While the introductions can be made and the options can be put to people, “You might want to have a look at this”, in the old days we would have a situation where all the different Departments would get their heads together to avoid that scale of redundancy.
As I said earlier, in 2018 alone we lost 17,000 years of experience—more than that; 17,300 years of experience—in one year in HMRC. The only reason why we do not know how much more we have lost since then is that the Department stopped giving us the length of service figures where we could calculate how many years of experience the Department has lost. It is absolutely criminal that we are throwing away that experience and we are doing it every single year.
Q147 Karin Smyth: If we can stick with you, Mr Kelsey, on the closure of the local offices and moving to regional hubs, what kinds of relocation packages have been offered to HMRC staff in those posts where they have been relocated from local to regional?
Martin Kelsey: They have been broadly the Civil Service ones. There has been one or two little—not so much on relocations themselves, as in people upping sticks and moving house to other places, but in terms of making it easier for people to get to. There have been slight enhancements on excess fares allowances, so if it costs somebody a little bit more to travel for a period of time they will get the additional cost met by the Department. There have been some measures like this taken but—
Q148 Karin Smyth: Have they worked?
Martin Kelsey: Given the scale of redundancies that we have seen, I would suggest not. If what the Department had put on offer had been a big enough incentive, we would not have seen the scale of redundancies. To be fair, by and large we were able to do this with voluntary redundancies. I think that the only times where we ended up with compulsory redundancies were, perversely, when the terms might have been a little bit better for certain individuals. If so many people are prepared to take voluntary redundancy at the same time, it is probably an indication that there is something rotten in the state of Denmark, so to speak, and people are not happy with the way the organisations are operating.
There are steps that can be taken to avoid and mitigate against this, and we will do that and we will constantly engage with the Department on a redundancy avoidance measure. However, frankly, given the workload that HMRC has at the moment—particularly dealing with issues like compliance and customer services and the flak we have been getting from your sister Committee in Public Accounts—it is not helped by the fact that we have a 20%-odd turnover in our customer services group in telephony at the minute. When those people have somebody standing over their shoulder looking at stats saying, “You spent 20 minutes in the toilet” that is not going to encourage people in 2023 to say, “I want to make this my long-term career”.
There needs to be a more grown-up approach to management in the Service. There needs to be a more joined-up approach to management in the Service. There certainly needs to be a more strategic approach to management in the Service if we are going to avoid the things that we have had forced on us in the Civil Service unions over the last few years.
Q149 John Stevenson: I am sorry to keep going with you, Martin, but the next question is for you as well. It relates very much to the HMRC’s regional hubs. Other Departments have moved into those hubs as well. What is their impression of the quality of the buildings? Are they new buildings, are they refurbished or are they old style that could do with investment? I would be interested across the piece.
Martin Kelsey: With the possible exception of the Liverpool one at the moment, which is shut because the basement is flooded and I think they have found all sorts of safety hazards in there, so everybody who was due to be in the Liverpool hub is currently still working from home, we do not have a criticism of the quality of accommodation generally. The buildings that we had under the Mapeley STEPS contract, which was signed in 2001 when HMRC entered into a contract with a company that turned out a few months later to be tax avoiders—and I take Denis Healey’s line about the difference between tax avoidance and tax evasion being the thickness of a prison wall—were generally awful. Fundamentally, it was good to get out of those buildings, so we never said, “Don’t get out of those buildings” because the buildings were awful as a general rule.
However, what we did say is, “Don’t put all your eggs in just 20-odd regional baskets”. There should still be a presence at the ports and airports. There should still be a presence in specialist areas; I mentioned earlier the Scottish oilfields and gas fields. The Department’s policy is the Department’s policy, and we are where we are on that. Yes, there is some co-locating now and I made the point—
John Stevenson: I am just trying to get to the point about quality of buildings.
Martin Kelsey: Yes, the accommodation is okay.
Q150 John Stevenson: That is all I need to know. That is fine, thank you. Can I then move on to the modern issue of working in the office, working from home and hybrid working? I will start with you, Amy. What are the policies of each Department and how do they vary between Departments?
Amy Leversidge: From our point of view—and I submitted this in our evidence; we wrote a report last year, “Is hybrid working?”—a great deal of our members do want to continue with hybrid working. They can see that there are a lot of benefits to that for work-life balance. Being able to work on quite intense policy work where you just need to get your head down, and to be able to do that at home, and the workplace is for collaboration and working and meeting with your colleagues. They can see that there is a benefit in doing that hybridly; it is not all at home and not all in the office, but a mixture.
We have a wide variety of what is happening in the Civil Service. For a great deal of staff, they are working hybridly but, depending on the attitude of the Minister, there will be targets around how much they expect people to be in the office. There will be differing levels of success around meeting those targets. Where we know that there have been successful relationships is in the Department for Transport. That is one of the Departments that has worked this out very well. I think that is because it has very good employment relation structures.
It is a pragmatic approach. The Minister has taken a very pragmatic approach about the purpose of being in the office, the purpose of being at home, and they have worked that out for themselves as to what is best, rather than having an arbitrary target, “I just want to see that there are people in the office in front of me”, as seems to be the case in other Departments, which is not helped by lots of negative ministerial comments. It is not just the ministerial comments. It would be remiss to think that some of those Ministers are no longer Ministers and they have gone and there is not a problem any more. There was a deliberate policy choice by Government to then bring in these arbitrary targets, “We want 40%, 50%, 60%”, and it is not really related to what they need to do in the office. Equally, you have the other problem because you have a move to the hubs, and it does not actually bear any relationship to how many desks you have. Can you have that many people in the office at any one time? People have to book desks, and there are all sorts of arrangements there. We know it is working in the Department for Transport because it has a good and pragmatic employment relationship—
Q151 John Stevenson: Is there a difference between regional offices and London?
Amy Leversidge: I don’t know that there is any difference. The comments from Ministers, which have been unhelpful, are focused on the London office because that is where the Minister is and so, probably, it feels like there is less pressure outside of London and that seems to be a London problem. However, for the most part, civil servants are hybrid working. It is going on and we want that to continue.
Q152 John Stevenson: Is there a radical difference between Departments? You have highlighted the Department for Transport, but are there differences with other Departments?
Amy Leversidge: No, there is not a radical difference in what is actually happening, but there is a radical difference in the attitudes to it.
Garry Graham: My experience is generally that common sense is prevailing out there. The fact that the Minister who was running around Whitehall like Wee Willie Winkie, putting passive-aggressive notes on people’s desks, has moved on is a welcome departure.
Q153 John Stevenson: Have you seen differences between Departments or between London and the regions?
Garry Graham: I see a significant number of Prospect members have always worked in a hybrid way because, for operational reasons, they are out doing inspections, they are out seeing customers and they are out assisting the public. Part of their time is already spent out of the office. You have already had figures in terms of occupancy levels. There is not a huge divergence across organisations, and sensible and pragmatic discussions are taking place.
Geoff Lewtas: The reality in a number of Departments is that people need to go into a workplace. An example of that is the Ministry of Justice with its courts. If the judiciary decides that there will no longer be virtual hearings of cases, the civil servants who are involved in handling the court processes need to be in the workplace. It is similar in a Department like the DWP. Not all but a significant amount of the transactions are face-to-face with people seeking to claim benefits and have job advertising and job arrangements dealt with individually and sensitively. It is helpful to be in the workplace for that.
Q154 John Stevenson: My overall impression is that, broadly speaking, we are getting to a point where practical, sensible, pragmatic policies are taking place.
Garry Graham: Absolutely so, yes.
Q155 John Stevenson: To finish with you, Martin, the different Departments are interesting, but you made an earlier comment about whether there should be a centralised HR department. That is what you implied, effectively. Should there be a standard policy across civil servants for a hybrid/working from home mixture or should each individual Department have their own policy?
Martin Kelsey: Generally speaking, my maxim would be that as much commonality as we can possibly establish would be the best way forward for the Civil Service. There will always be the opportunity for flexibility here and there, but we are better off, generally, having the most consistent approach we can. We have our pay and contract reform deal that we signed a couple of years ago on changes to the contracts. That guarantees two days a week minimum working from home, more if the business can accommodate it. That kind of surety, “Yes, there is definitely this, but there is the flexibility to go a little bit further if the system allows it”. That sort of approach works, I suggest. If we had that commonality across the Service, we would have more consistency.
Garry Graham: For example, the Civil Service has always had home working. People who work predominantly from home do not come regularly into offices. Ordnance Survey is a good example of that. There are people who work for Defra—some of the bee inspectors have worked from home. Some people working for ONS and doing surveys have been home workers. To an extent, none of this is new.
I would like a consistency of approach in a number of areas where we face redundancy situations. The work is continuing but moving, and the individuals may not be able to move with the work but they may be able to do the work from home. We are told in those circumstances that while managers can be flexible, for those staff, contractual rights, which effectively guarantee the ability to continue doing that work from home if the work has moved, will not be allowed in those circumstances. We are in a perverse situation where they potentially face redundancy, with the expenditure that sits aside that loss of knowledge, skills and experience, because the system will not give the flexibility to allow these individuals to work from home. I would like to see a level of consistency across the piece.
Q156 Jo Gideon: Thank you. It is Government policy that HMRC, DWP and Defra will transfer the management of their offices to the Government Property Agency by 2025. Do you believe this will happen? How much does it matter?
Amy Leversidge: To be honest, I am not sure about making a prediction on whether that would happen and how accurate that prediction would be. I do not know if my colleagues are able to give a more realistic prediction. Probably the more important part of the question is whether it matters. Our members can understand the logic of the hubs, and it makes sense to have people in there. A big focus for our members has been around the fact that the hubs are more environmentally sound, and they care a lot about those issues. Who manages the buildings might be not the biggest issue as long as they are managed and run well, and as long as people have enough space to get on with their work and outcomes are being met for Departments. That is more important.
Martin Kelsey: Yes, likewise, will it happen or will it not happen? If I have learned one thing, it is never to make predictions in this game, and so I will probably not start now.
A potential material impact is for the different Departments that have moved into the HMRC-managed hubs. My understanding from our last meeting with the chief finance officer is that there has been some sort of financial benefit, running costs-wise, to HMRC by having tenants, for want of a better phrase, from other Government Departments. If there is a current benefit to HMRC as an organisation in terms of running costs of having tenants in from other Departments, if they are required to hand over that property—and you would probably need the chief finance officer sitting here to answer that question—that might lead to a change in potential income and therefore additional pressures on HMRC’s running costs. I am sure the CFO will probably make that point to somebody. That is my best guess from the discussion that we had two or three weeks ago when he indicated that there were some financial benefits to the Department, maybe through soft charging. I do not know for sure.
Geoff Lewtas: I have at least a couple of things to say about this question. There is an understandable scepticism about whether by 2025 GPA will take on the full panoply of dealing with the building and estates needs of DWP and HMRC. I say that because the experience has been, right from the very start of the hub’s programme when we were discussing it with the Cabinet Office directly about 10 years ago, that within two years of that we found that HMRC had wrestled the real lead for that project away from the Cabinet Office because so many of the hubs were designated then as primarily or wholly for HMRC staffing.
We also have the DWP running its own separate network design workplace transformation programme currently, and that sets of a whole series of centres, some of which we are only just discovering as we speak. We know about one in south Wales and another one in Birmingham, which is separate from the Cabinet Office hub in Birmingham, and also a centre based around Blackpool, where there is a significant DWP presence already. There will be others. That kind of separate process of development—and these are two large Departments, large chunks of the Civil Service involved—represents a significant obstacle in terms of the Government Property Agency taking over that role. Something of a power struggle is always going on within the senior Civil Service. We saw in the development of the hubs programme some significant Permanent Secretaries who decided that they would run their own show and that they would not accept too much interference.
A lot may depend on how the Government Property Agency seeks to approach its role in the future but, from our point of view, there are some advantages in the Government Property Agency making that takeover of that role, because it is important that there is a clear central focus about the estate’s strategy. At the moment, it is not exactly a joke, but it is not there as a complete piece that deals with the estates of the Government in an overall setting and in a comprehensive way. It needs to be before any more glossy pamphlets are produced that tell us all about how wonderful it is.
Garry Graham: There are concerns from some smaller organisations and some in the hubs already as to how they fit in with the hubs in terms of—it can even come down to local governance—how their voice is heard or if anyone takes any notice of them, as well as issues of consistency of approach. All unions had challenges over Covid, with the hub offices and individual employers having different policies about Covid and wearing masks in public areas. That is an obvious nonsense if you are in a Government hub and it has a public area, and you have four or five employers all with different policies about whether you should wear a mask in that public area. In the hierarchy of things I worry about, I have bigger fish to fry, it is fair to say.
I go back to my earlier point. Where is the vision behind this? What are we seeking to do differently and what are we seeking to do better? Is this Whitehall in the regions or is it bringing the regions into Whitehall? None of those questions have been answered. This is purely transactional stuff.
Q157 Jo Gideon: If I could expand a bit on something you touched on, Mr Lewtas, DWP is currently managing its own large estates programme, in which it is also closing local offices and moving posts to larger regional centres. You have touched on this. To what extent is it co-ordinating this programme with the Government hubs programme?
Geoff Lewtas: Not at all. It is not obvious to me that there is any co-ordination coming from DWP as far as what it is seeking to create. You are right. They are closing dozens of offices across the whole country and concentrating on a number of centres, some of which we know about—they are being described as regional centres—and others that are just in new locations for offices that are being closed.
Q158 Jo Gideon: Does anybody else care to comment before I move on? The Government Property Agency bears some resemblance to the old Property Services Agency, but it appears to have a much smaller scope of influence. What would be the risks and opportunities of giving the Government Property Agency more control over the entire Government estate? We have touched on it slightly, but we will start again with you, Ms Leversidge.
Amy Leversidge: We have hit on this a number of times during the session. There is always a tension between trying to direct from the centre and having delegated employers doing their own thing. While you have those two different structures, they will constantly butt heads. It is almost impossible to push through a single strategy because of that tension.
Again, as we have touched on, the problem is that lots of this is done in silos. We have the hubs, the property, the estates and Places for Growth. That is completely separate from pay, which is a massive lever to achieving that. You need some central control around those big strategies but, while you have delegated employers, that is hard to do.
The problem is that we have this dysfunctional, chaotic mess where we have all these strategies—and Places for Growth is a good strategy, but it is all being done in silos and no one is talking to each other. What we need is something above that to deliver it. I am not sure that changing who manages that will make a difference. It might feel like that is the answer because there is the bigger question above all between the centre and delegated employers.
Martin Kelsey: You made the point about the remit being diluted, and I concur. While we have individual Departments running their own shows—we talked about pay and conditions earlier—it is much wider than that. We have the DWP issue and our own HMRC experiences. If all that the new agency will do is to say, “You might want to set up shop here”, that will not affect the day-to-day running of organisations. They will still want to say, “We want to have an office there, and we want to have an office there”, and there will be none of the joined-up thinking that we talked about earlier.
We mentioned Wolverhampton, and Peterborough is another example. We used to have an office in Peterborough and now that has gone. There is now, a year or two later, another Government presence springing up in Peterborough.
Without a controlling hand to say, “This is the Government property policy and the Government property strategy that all Departments are expected to buy into”, you will still have Permanent Secretaries saying, “I don’t fancy that. I want to do this instead”. Their executive committees will agree and that is what will happen.
Q159 John McDonnell: Can I declare an interest? I am a member of the PCS parliamentary group. It is a cross-party group. It is not affiliated. There is no financial interest, apart from me donating to the strike fund every now and again.
I want to talk about the career development and ministerial presence in regional hubs. You have touched on it a bit. How often are Ministers working in the new regional hubs? As a corollary to that, to what extent are officials based in the regional hubs being asked to travel down to London to attend meetings?
Amy Leversidge: The evidence that I have of what is happening currently is that it does seem that Ministers go for visits in the regional offices and do not actually work from the regional offices in a meaningful sense. It seems that they go along for their visit and will meet and greet the staff that work there. There is no great sense that Ministers are there meaningfully.
In terms of the senior civil servants that advise the Ministers, I do not get any sense that they are the senior civil servants who have moved out to the regional hubs. I think they are remaining in London. We do not have this odd situation of people moving out and going onto the train. They just have not moved.
Q160 John McDonnell: Are all levels of service being dragged into London?
Martin Kelsey: We have a Stratford regional centre and we have retained our 100 Parliament Street office. We have still kept a significant presence. I will leave it for this Committee to decide whether they think Croydon is in London or not. I know there are occasional differences of opinion on that but, generally speaking, there is a significant presence through the Stratford regional centre and through Parliament Street retained in HMRC.
Q161 John McDonnell: Can I come back to this issue about the roles? This is not the first time that policy roles have been located outside of London. There have been policy officials, and the examples we have are Sheffield, Leeds and East Kilbride. What lessons do you draw from that past experience in terms of ensuring that policy staff are able to successfully build senior careers outside of London even when they are physically distant from Whitehall?
Amy Leversidge: A big issue that we have had with people being outside of London is that there does appear to be a bit of a bottleneck in making that leap to the promotions. There are SCS posts outside of London, but very few compared to the number of people who want to get promoted. Your career is limited at grade 6 unless you are willing to move out.
Q162 John McDonnell: Please explain what that post is and the grade you mentioned.
Amy Leversidge: Grade 6 is the one that comes before the senior Civil Service. There are a lot more grade 6 roles located outside of London, and the big proportion who remain in London are in the senior Civil Service. We have said this for a long time now. If you want to stay outside of London and you want to build a career, you have to have that career path there.
The only way to get around that is to have the Ministers going out, or to have an ability for the Ministers to be comfortable getting advice and having those conversations virtually in a hybrid way. That comes down to whether the individual Minister is happy to do that. Some Ministers are engaged and happy to hybrid work, but some Ministers are clearly not, and they want to have their officials giving them the advice in the room with them.
Q163 John McDonnell: If we look at it the other way around, when there has been a move to a new regional location, how common is it that staff whose posts have been located to another city under the Government hubs programme stay in their existing homes and commute into their new offices rather than live nearby?
Amy Leversidge: I don’t have any intelligence around that from members. I do not know if my colleagues will do. It depends on which hub you have and where you are. It is a lot easier to commute to Birmingham than it is to commute to Darlington, for example. If you will be there only a couple of days a week, nothing is unachievable. It depends on your family’s circumstances as to whether you want to do that. You all commute down to London and have your families located elsewhere. It is achievable if you can make that work, but it is not necessarily the objective of the Places for Growth policy. The Places for Growth policy is to try to get people from those regions into senior posts.
Geoff Lewtas: Hybrid working has the potential to help to satisfy people’s interest in future careers at senior levels and for people at other levels as well. However, in the case of senior civil servants working with Ministers, it requires Ministers to accept, approve of and live with the idea of officials with whom they need to have regular dialogue working remotely. Technology now allows for that to happen, and it is becoming more of a question of personal preference as to what you want to do. It would be right to encourage the use of hybrid working more in this particular context. If you want to make the presence of senior civil servants out in the regions more of a reality, that is the way forward.
Q164 John McDonnell: Has the requirement for two days a week had any impact on people’s decisions about whether they should move or remain? Do we have any evidence of that?
Amy Leversidge: That is not a big issue in terms of whether people will move for Places for Growth. The biggest things that will influence your decision will be your family’s circumstances, whether you can move and whether it will have a long-term beneficial impact on your career and your family life. Then there is potentially your pay and your economic circumstances. If you get those three things right, you could use pay to incentivise people to move, making sure that there are career opportunities and helping people with family arrangements where possible, which helps with the financial incentives. Those are the three biggest considerations for people.
Q165 John McDonnell: To sum up, we are not clear about how many Ministers work in the regional hubs. We are not clear at the moment on the scale of staff commuting that takes place. That information would be invaluable to us.
Amy Leversidge: Yes, we can try to find out. From our representatives in the Department, when they say, “We do not hear of Ministers working there often”, they are basically saying that they just do those visits.
John McDonnell: It would be useful to know how far staff commute as well. We do not expect you to tag Ministers—which might be helpful—but it would be useful to know examples of how far people now commute and what impact that has on their lives as well. Thanks.
Q166 Chair: I have a concluding question from me. Beyond the talk of bricks and mortar, HR functions and every other important topic that we have discussed this morning, as I understand it, a principal reason for Civil Service moves out of London is a diversity of views. There is sometimes a lazy characterisation of everything within the M25 bubble being totally out of touch with the rest of the world and so forth.
How do your members respond to that? It is fair to say that we have had evidence that the Darlington economic campus reports a change in the way that policy is being made and discussed as a result of recruitment from outside of London. Is this still a lazy assumption or is there an element of truth to it?
Amy Leversidge: We widely know that having diverse groups of workers coming together will create better policy. That is a fact. The more diversity you have and the more opinions you have, the stronger decisions you make.
I would not necessarily call it a lazy assumption, but Ministers make the decisions and civil servants advise. Civil servants give the best impartial advice that they can give, but ultimately the Ministers make the decisions. I wonder how much diversity there would be around the Cabinet table if you looked at how many people went to the same university and things like that. That area also potentially may need to be looked at if you want to get different opinions and different decision making going on.
John McDonnell: You have been batted back a bit.
Chair: I ask questions as a devil’s advocate, as our witnesses might realise.
Martin Kelsey: Yes, it is fair to say that if you talk to people from places outside London and the south-east, a view and a perception is that here in this place and around it there is a lack of understanding of the varying pressures that are faced outside in other parts of the country in things like life expectancy levels changing. Levels of impoverishment are different as well. That is not to say that there is not poverty in London and the south-east; there definitely is. However, you asked a question about whether there is a perception that London and the south-east are not in touch with what goes on elsewhere.
There are other diversity issues as well, frankly. HMRC used to have an office in Leicester, which it closed. There is a high BAME population there, and that office was closed in favour of Nottingham, which has a lower BAME population. Likewise, Bradford is closing in a couple of years’ time in favour of Leeds. Bradford has a much larger BAME population. There is a whole range of diversity issues, not just diversity of thinking but also actual diversity with a capital D. Government thinking needs to be broader and more focused on considering things before they make these decisions. It is fair to say that lots of people think that London does not understand what is going on everywhere else.
There are other things. John mentioned commuting. I lived here for a couple of years, donkeys years ago. Public transport in London is incomparable to public transport anywhere else in the country. It is infinitely better—not just night buses, but the frequency of buses and trains is completely different. For those changes, if you are genuinely going to take the running of the country out to the wider people, other things need to be considered as well. That is consistency of services and consistency of the supporting infrastructure that does not exist in the regions in the same way as it does in London and the south-east.
Geoff Lewtas: I will only echo in part what Martin has said. We put in our written evidence to the Committee a concern that if you take jobs out of London and if you do not put them into one of the big cities where there is a similarly diverse population, you are talking about civil servants operating in a much more white environment. That is only one factor that needs to be in the mix of consideration, but I do not dismiss it as part of the reality of what Places for Growth would lead to. It just needs to be considered carefully in the overall mix of other issues.
Garry Graham: It may surprise the Committee to learn that I am not actually a Londoner or from the south-east. There is a lot of sloppy thinking around this. I am an old, dour, Scottish empiricist. I like to see data. If I cannot measure it, sometimes I think people don’t know what they are talking about.
A concern here is that there has been a drift or a move away from a focus around people and issues related to protected characteristics, and far more vague language used. I support the principle in the Ditchley lecture. Should the Civil Service be reflective of society itself? Yes, it should.
However, I am not convinced about what we are developing here. I still have no articulation as to how it will assist in terms of policy development, policy delivery and policy evaluation. If you want to look at the Civil Service, there is a range of things that you need to look at beyond geography. There is educational background, educational support and issues related to social class, if you are thinking about a Civil Service that serves and is reflective of the whole society itself. It is not just about where certain offices are based.
Chair: Thank you. That is an interesting point on which to finish. Can I thank each of our four witnesses this morning for giving their time, showing their expertise and the experiences of their members? We are very grateful indeed. If there is anything you wish to furnish us with after this session, please write. It will be gratefully received. For the meantime, thank you very much indeed.