House of Commons Welsh Affairs Committee
The future of the Newport Passport Office
Fourth Report of Session 2010–11
Report, together with formal minutes, oral and written evidence
Ordered by the House of Commons to be printed 25 January 2011
HC 590 Published on 3 February 2011 by authority of the House of Commons London: The Stationery Office Limited £14.50
The Welsh Affairs Committee
The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales).
Current membership David T.C. Davies MP (Conservative, Monmouth) (Chair) Stuart Andrew MP (Conservative, Pudsey) Guto Bebb MP (Conservative, Aberconwy) Alun Cairns MP (Conservative, Vale of Glamorgan), Geraint Davies MP (Labour, Swansea West) Jonathan Edwards MP (Plaid Cymru, Carmarthen East and Dinefwr) Mrs Siân C. James MP (Labour, Swansea East) Susan Elan Jones MP (Labour, Clwyd South) Karen Lumley MP (Conservative, Redditch) Jessica Morden MP (Labour, Newport East) Owen Smith MP (Labour, Pontypridd) Mr Mark Williams MP (Liberal Democrat, Ceredigion)
The following Members were members of the committee during the Parliament:
Glyn Davies MP (Conservative, Montgomeryshire) Nia Griffith MP (Labour, Llanelli)
Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/welshcom
Committee staff The current staff of the Committee is Adrian Jenner (Clerk), Anwen Rees (Inquiry Manager), Jenny Nelson (Senior Committee Assistant), Dabinder Rai (Committee Assistant), Mr Tes Stranger (Committee Support Assistant) and Laura Humble (Media Officer).
Contacts All correspondence should be addressed to the Clerk of the Welsh Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3264; and the Committee’s email address is [email protected]
The future of the Newport Passport Office 1
Contents
Report Page
Summary 3
1 Introduction 5 Background 5
2 Rationale for the Decision 6 Restructuring the Identity and Passport Service 6 Retaining a full passport service at Newport 8
3 Consultation 10 Consultation with the Secretary of State for Wales 10 Negotiations with the unions 10 Announcement of the proposed closure 11
4 The Economic Impact of the Proposed Closure 14 Job Losses 14 Economic Impact Assessment 15 Wider Implications 16
5 The Impact of the Proposed Closure on Customers 18 Welsh language service provision 19 Interview Office Network 20
6 Conclusion 21
Conclusions and recommendations 22
Formal Minutes 25
Witnesses 26
List of printed written evidence 26
List of Reports from the Committee during the current Parliament 27
The future of the Newport Passport Office 3
Summary
The Newport Passport Office is one of seven regional offices and one of five Passport Application Processing Centres. Newport Passport Application Processing Centre serves the whole of Wales, Devon and Cornwall, Avon and Somerset, Dorset and Gloucestershire. It deals with 47,000 passport applications annually—around 10% of the national total.
On 8 October 2010, the Identity and Passport Service (IPS) announced a public consultation on its proposed plan to close the Passport Office at Newport, with a loss of over 300 jobs. On 12 October, the Home Office announced that a customer service centre would be retained in Newport to service South Wales and the South West of England. A consultation process on the proposed closure began on 19 October 2010 and was subsequently extended to 18 March 2011. The piecemeal nature of the announcements suggests the lack of a co-ordinated strategy regarding the future of the IPS in Wales.
The Newport Passport Office is the only passport office serving the people of Wales. The Committee is concerned that its significance to Wales and its value to the Welsh economy has not been truly appreciated by the Government. No economic impact assessment of the proposal has to date been completed on an area which has suffered long-term effects from the closures of the heavy industry on which its prosperity was once founded. It is therefore important to re-examine and re-evaluate the criteria on which the decision was based. These oversights and omissions should be addressed before the final decision is made.
The Newport Passport Office is the second largest employer in the city centre. Its closure would have a significant economic impact on the city. Wales has recently suffered from the cancellation of several key strategic projects which would have brought investment and jobs to Wales. The closure of the passport application processing centre would be a further blow for the Welsh economy.
The Committee is not convinced by the Government’s argument that long-term savings will be made by reducing the size of the Newport Office. The Office has been responsible for successful, innovative programmes and has a cadre of skilled and experienced staff. The rationale behind the closure is based on short-term savings without a proper examination of the long-term advantages of consolidating services in Newport. The IPS should provide a detailed appraisal of the costs and benefits of consolidation and expansion in Newport as opposed to a reduction of services there.
Without the retention of the office in Newport, we doubt that the Government’s duty to provide a Welsh-language service to users can be properly discharged.
The appraisal and consultation process which led to the decision in principle to close the Passport Office in Newport was unsatisfactory and the rationale for the decision is questionable. The Committee calls on the Government to ensure that the concerns raised in the report are taken into account when deciding on the future of the Newport Passport Office.
The future of the Newport Passport Office 5
1 Introduction
Background 1. The Identity and Passport Service (IPS) is an executive agency of the Home Office. It is responsible for issuing UK passports, and deals with an average of 5.5 million applications for passports each year.1 It has a network of offices based at regional and local level across the United Kingdom.
2. The Newport Passport Office is one of seven regional offices and one of five Passport Application Processing Centres—the others being Belfast, Durham, Liverpool and Peterborough. Offices at Glasgow and London provide customer counter services only. The catchment area for the Newport Passport Application Processing Centre is the whole of Wales, Devon and Cornwall, Avon and Somerset, Dorset and Gloucestershire. There are also 56 local interview offices throughout the United Kingdom.
3. On 8 October 2010, the IPS announced plans to hold a public consultation to “reduce the size of the organisation and ensure it is more efficient”.2 Under the proposed plans, the Passport Office at Newport would close with a loss of over 300 jobs. On 12 October, the Home Office announced that a customer service centre would be retained in Newport to service South Wales and the South West of England.
4. A statutory 90-day consultation process on the proposed closure of the Newport passport application processing centre began on 19 October, and was originally due to end on 18 January 2011. On 17 January, it was announced that the consultation period would be extended for a further two months, and close on 18 March.
5. Following the Government’s announcement, concern has been expressed in two areas: the impact on the economy of Newport and the wider region; and the level of customer service for the people of Wales, including Welsh language provision. On 14 October we announced our inquiry examining the justification for the decision by IPS to reduce its services in Newport. We received written evidence from a number of individuals and organisations and also took evidence on 10 November from regional and national representatives of the Public and Commercial Services Union (PCS), and Councillor Matthew Evans, Leader, Newport City Council; Mr Damian Green MP, Minister of State (Immigration), Home Office, and Sarah Rapson, Chief Executive, Identity and Passport Service.
6. This Report and the evidence we publish with it, is our contribution to the Government’s consultation on the proposed reduction in size of the Newport Passport Office.
1 The IPS is also responsible for the registration of births, marriages and deaths in England and Wales. From 1 April 2008, the IPS also took responsibility for the work of the General Register Office (GRO) for England and Wales from the Office of National Statistics (ONS). 2 “IPS announce office closure consultation”, Identity and Passport Service press release, 8 October 2010.
6 The future of the Newport Passport Office
2 Rationale for the Decision
Restructuring the Identity and Passport Service 7. In written evidence, the Home Office argued for the need to restructure the Identity and Passport Service (IPS) because of excess capacity in its application processing and interview office networks. It claimed that current and planned improvements in productivity and efficiency would mean that by 2012, the IPS would have:
• Excess staff capacity of around 350 full time equivalents and excess physical capacity of approximately 25% across [its] application processing estate;
• Excess staff capacity of around 150 full time equivalents and 39 local offices across [its] Interview Office Network.3
8. In its submission to the Minister on 13 September 2010, the IPS commented that there were two reasons for the apparent ‘overcapacity’ in terms of staffing and estates: the cancellation of the National Identity Service (NIS) programme (that is to say the “identity card” system legislated for by Parliament at the instigation of the previous administration and repealed at the instigation of the new government); and operational improvements. The Home Office explained that the introduction of a new passport application system would represent “a net reduction in the cost of services to IPS of £17.6 million”:
The additional functionality provided by this system will allow IPS to change the way customer applications and telephone queries are handled and deliver more services online; which together will result in productivity gains equivalent to 129 Full-Time Equivalents (FTE).4
9. In order to make the proposed savings, the Home Office stated that it was necessary to close a passport application processing centre and reduce the number of interview offices. The IPS had undertaken “an analysis based on criteria which included cost, affordability, estates, people, customers and partners, performance and operational feasibility”.5 The analysis noted that:
Consideration was given to the respective weightings of the criteria but these were ultimately given equal weights, as varying the weightings made no discernible impact on the outcome of the analysis.6
We conclude therefore that no weight was given to the status of the Newport Office as the only passport office within the Welsh nation, or to the consequence of closing the office on the economy of the region.
10. The Public and Commercial Services Union (PCS), the civil service trade union, questioned the reasons set out by the IPS for the closure of the Newport regional office and
3 Ev 21 4 Ev 48 5 Ev 21 6 Ibid.
The future of the Newport Passport Office 7
the criteria used. It commented that the Newport Office had had little involvement in the Identity Card programme and “we see no reason to argue that the cancellation of the NIS [National Identity Scheme] leads to the conclusion that there are too many staff working at IPS and that therefore Newport must close”.7 The Union also took issue with the fact that operational improvements would lead to excess capacity:
... to our knowledge, the new passport processing system is very much a work in progress, indeed in inception and [...] very few customers currently use the on-line channel […] If the systems are not in place by the end of 2011 to deliver the operational improvements the organisation envisages, IPS will then be under- capacity ...8
PCS continued that:
... the proposals depend in part on future operational improvements to be gained from the introduction of new technology, much of the information in the submission about the savings to be made from the Newport closure are pure guesswork, in the absence of any certainty about the robustness of future operating systems.9
11. PCS described the Government’s decision as a “short-term cost-cutting exercise”.10 Paul McGoay, IPS Group President for PCS claimed that the IPS had a history of making such decisions, which they then had to reverse. He cited two examples: the 1999 “major passport crisis” when the IPS service had not been able to handle a backlog of applications due to the failure of a new IT system and a lack of staff; and the decision in 2008 to remove the passport application processing centre from the Glasgow Passport Office.11 In highlighting the reasons for why the decision had to be reversed, Mr McGoay described how:
Over the last couple of years, [IPS] have had to put postal production back into the Glasgow site, utilising the remaining staff there. That has had a detrimental effect on the service because it has meant that they have had to shut down the main counter in Glasgow at least two days a week in the peak periods to bring the counter staff back to examine the postal work.12
He concluded:
We were told at the time in 2008 that Glasgow would never have postal work again. So they have a history of short term, knee-jerk decisions.13
7 Ev 17 8 Ibid. 9 Ibid. 10 Q 14 11 Q7 12 Ibid. 13 Ibid.
8 The future of the Newport Passport Office
12. We have some evidence that the Identity and Passport Service has made decisions in the past that have come to be seen with hindsight as short-sighted. Decisions are reversible, but in the case of the Newport Office the impact may be permanent even if the predictions on which the decision is based turn out to be wrong. For this reason we believe it is important to re-examine and re-evaluate the criteria on which the decision was based. They did not include an economic impact assessment on an area which has suffered long-term effects from the closures of the heavy industry on which its prosperity was once founded. Nor did they give any weight to the fact that the Newport Office is the only branch of the service in Wales. For both these reasons, we believe the analysis undertaken by the IPS regarding its cost saving programme was unsatisfactory. These oversights and omissions should be addressed before the final decision is taken.
Retaining a full passport service at Newport 13. Witnesses argued that, rather than reducing services, the IPS should seek to consolidate its services in Newport. In its evidence, Newport City Council commented that “If IPS were looking for better value locations for more back office processing to reduce overheads, they should actually be thinking about consolidation in Newport, rather than retrenchment”.14
14. The executive office of the UK Statistics Authority moved its headquarters to Newport in 2004, with approximately 1,300 staff now working there. Newport City Council commented that this move had been extremely successful:
The Head of Communication and Planning at the ONS […] said of the relocation that: ‘the government were trying to encourage many civil servants to leave the South East and we decided that this would be a great opportunity to leave London. So we thought our quality of life has to get better so we came down here and we found that’s exactly what’s happened, we have countryside on our doorstep, we have beaches down the road and it’s fantastic’.15
15. Newport City Council also emphasised the difference in rental costs between Newport and different parts of the UK, and stated that the Government was incorrect to assume that “long-term cost savings will be made by exiting the City rather than relocating within the area”.16 In looking at the cost benefits of consolidation in Newport, Newport City Council claimed that:
There is a wide range of prime office space available in Newport for the passport office to move into […] which can cost as little as £8.50-£15.50 a square foot for grade A office space. The average price for office space in London’s West End—IPS’s London office—is around £75 a square foot.17
16. The UK Government is committed to pursuing a programme of relocating public sector jobs to the regions. We support this approach. In the light of this, we conclude that there is a strong case for consolidating services in Newport, rather than removing
14 Ev 34 15 Ibid. 16 Ev 34 17 Ibid.
The future of the Newport Passport Office 9
them. We therefore recommend a further re-examination of the economic case for the Newport Office on the basis of consolidation of services there rather than their removal. In its response to this report and to the public consultation, we expect the IPS to give a detailed appraisal of this option.
10 The future of the Newport Passport Office
3 Consultation
Consultation with the Secretary of State for Wales 17. We examined what, if any consultation, the Home Office had had with the Secretary of State for Wales prior to the public announcement, particularly as this was a policy with cross-border implications. The principle of timely consultation on policy matters that may affect Wales is described in Devolution Guidance Note 4:
… it is essential if there is to be no delay in reaching decisions that the Secretary of State [for Wales] and the Assembly Government are consulted at an early stage in the development of policy. […] Colleagues are asked therefore:
• that officials should take soundings of Assembly officials as soon as possible. If these indicate that there may be clauses in the legislation dealing specifically with Wales or particular issues relating to Wales, officials in the Wales Office should be alerted;
• that whenever possible the relevant Assembly Minister should be asked for his or her views on a proposal at the same time as policy clearance is sought from Cabinet colleagues […]
While this is particularly important for primary legislation, the principle should be applied to any Government initiative that affects Wales.18
18. The Minister confirmed that the Secretary of State for Wales had been informed of the “settled view” regarding the closure of the Newport Passport Office on 5 October.19 There seemed to be no suggestion that the Secretary of State for Wales had been consulted prior to this, or that the Welsh Assembly Government had been informed or consulted in any way prior to the Government’s decision.
19. In its report on Wales and Whitehall, our predecessor Committee concluded that Whitehall guidance as it applies to Wales has been misunderstood on a number of occasions. We conclude that such a misunderstanding has occurred again. Devolution Guidance Note 4 is clear on the key role of the Secretary of State for Wales and the Wales Office from the start and throughout any process. On this occasion the Secretary of State for Wales was marginalised during the decision process. The decision-making process was flawed by this omission.
Negotiations with the unions 20. The Minister told us that he had been informed of the intention by the Identity and Passport Service (IPS) “to bring forward restructuring proposals” in July 2010. On 31 August 2010, the IPS Management Board agreed to recommend to Ministers the closure of the Newport regional office. The decision was made public on 8 October 2010.
18 Available at http:www.justice.gov.uk/guidance/devolutionguidancenotes.htm 19 Q 79
The future of the Newport Passport Office 11
21. Concern has been expressed about the nature of the consultations that took place before the announcement was made. The Home Office claimed that the IPS had been in discussion with the PCS about the need to restructure passport operations for some time, and specifically about the closure of the Newport Passport Office. Sarah Rapson, Chief Executive of the Identity and Passport Service, told us that discussions had centred on:
… the fact that we had overcapacity and that we were actually going to have to do something […]and secondly, then, how we came to the conclusion that the proposal ought to be the [closure of the] Newport office. It was those two things. The PCS were informally talking with us through that period.20
22. PCS disputed the IPS’s assessment that they had been prepared to consider office closure:
IPS management seem to be suggesting that PCS was prepared to consider accepting office closures, which is not the case. We did indeed take part in informal meetings, during which the closure of the Newport office was discussed. What IPS management has not made clear, however, is that throughout those meetings PCS maintained a stance of implacable opposition to office closures and redundancies in any office within IPS …21
23. The extended consultation period will end on 18 March 2011. In its written evidence, PCS criticised the IPS for its failure to properly consult with them. They described a “drip- drip” approach to the provision of information during the formal consultation period: 22
We have had a number of meetings with IPS management but we believe that the employer has been evasive and is not willing to consult properly with the union. Documents have been provided to PCS in a piecemeal fashion, with the result that at each meeting we have had to request further information. Documents have also been provided late, sometimes on the very day of consultation meetings.23
24. The breakdown in the relationship between IPS management and the Public and Commercial Services Union, which has deteriorated to the level of both sides publicly trading claims and counter-claims, is a demonstration of the mismanagement of the appraisal and consultation process relating to the proposed decision to close the Newport Passport Application Processing Centre.
Announcement of the proposed closure 25. We looked at the way in which the actual announcement was made to staff and by whom. The proposal to close the Newport Office was made public on 8 October as a result of a leak,24 which was then confirmed by IPS. Alan Brown, IPS Group Secretary of PCS described how:
20 Q 66 21 Ev 46 22 Ibid. 23 Ev 17 24 Q 63
12 The future of the Newport Passport Office
We had been contacted by the BBC on the morning of the 8th. They said that they had two sources from the Home Office who had confirmed that there was going to be the announcement of the closure of the Newport office and they asked if we wanted to comment.25
The Minister stated that he had “seen no evidence at all that a Home Office official leaked this information”,26 while PCS confirmed that the IPS management originally held them responsible “but have since accepted that we were not”.27
26. The Minister accepted that the announcement should have occurred in a more “orderly way”,28 while Alan Brown commented on the results of the announcement:
… we had members who effectively were being told that their jobs were going and were left in tears [...] with the announcement that was made on that day.29
27. In its written evidence, Newport City Council stated that the announcement was completely unexpected:
… by the workforce, the community of Newport, the City Council, Newport Unlimited [the publicly funded Urban Regeneration Company for the city] and the Welsh Assembly Government. The Council, URC, WAG and other IPS stakeholders had been working tirelessly behind the scenes over the last 3 years to assist IPS in their search for new office space in the area to meet all the current and future requirements, economically, efficiently and effectively.30
28. Alan Brown criticised the way in which the news was confirmed by a civil servant and not a politician responsible for the decision:
The fact that it seemed to be a civil servant who was left to carry the can and to deliver that news was quite extraordinary. In fact, for quite some time afterwards, it seemed to be civil servants that were left to defend the decision, which we do not think is defensible in the first place. In terms of quotes in the press, etc., it seemed to be civil servants and the chief executive who were left to make that decision and to defend that decision.31
29. Further confusion resulted when, following the initial announcement of the complete closure of the Newport Office, the Home Office then announced that the closure would only involve the “back office” work to produce passports and that the IPS would retain a customer service centre in Newport. In written evidence to the Committee, PCS stated that:
25 Q 3 26 Q 78 27 Q 2 28 Q 78 29 Q 2 30 Ev 34 31 Q 4
The future of the Newport Passport Office 13
The announcement of ‘up to 45’ jobs remaining in a retained customer service centre […] was only made under pressure from members of staff, the general public and from politicians and community leaders in Wales. Prior to the announcement of this retained service, IPS had no plans to have any service in Newport. PCS were not informed of plans to do this and the Chief Executive at a meeting with staff on 11 October 2010 only committed to retaining a passport office ‘somewhere in Wales’.32
30. The initial announcement that the Newport Passport Office would close was followed two days later by the announcement of the retention of a customer service centre. The piecemeal nature of these announcements suggests the lack of a co- ordinated strategy regarding the future of the Identity and Passport Service in Wales. The manner in which the announcements were made public reflects badly on both the Home Office and the Identity and Passport Service.
32 Ev 17
14 The future of the Newport Passport Office
4 The Economic Impact of the Proposed Closure
Job Losses 31. 28.5% of Newport residents are employed in the public sector, “above the UK average”33 of 25.0%. This figure is the seventh highest within the 22 Welsh Local Authorities. The Newport Passport Office is the second largest employer in the city centre.
32. The Minister estimated that direct job losses in the Newport Passport Office would be two hundred and fifty people,34 while the retention of a customer counter service would mean the retention of between “30 to 45” jobs,35 based on a requirement for 32 full-time equivalent staff.36
33. Witnesses described the economic impact of the closure of the passport application processing centre as “huge”.37 Newport City Council estimated that potential job losses in the South East Wales region caused by the closure of the office could be nearer 500 jobs:
Our assessment demonstrates that taking into account the immediate spend of customers (and those who accompany them) as well as staff, the impact is far wider, for example such spend supports local retailers who in turn purchase other goods. This significantly impacts the viability of the local retail offer.38
34. Sarah Rapson, Chief Executive of IPS, set out what plans were in place to help staff to find alternative employment:
… we will, over the next period of months, provide training and support in terms of CV writing, in terms of job application completion and interview practice—some practical support for people. We will also provide a counselling service, so emotional support for people who are going through the change. I have some HR professionals who will work in the local area with other Government Departments or local employers to see what opportunities there might be for people to be redeployed into.39
35. Despite this, many witnesses expressed concern that it would not be possible for those losing their jobs to find alternative employment due to the current weakness of the local economy. PCS commented that it would be “virtually impossible” to redeploy staff to
33 Ev 39 34 Q 85 35 Q 118 36 Ev 48 37 Ev 17 38 Ev 34 39 Q 103
The future of the Newport Passport Office 15
other Government departments in the current environment with all departments expected to make budget cuts following the Comprehensive Spending Review: 40
Virtually all other public sector workplaces in South Wales will also be facing ‘downsizing’—if not outright closure—and the prospects for redeployment or alternative employment in the area are slim indeed. The result will be impoverishment for members of staff who lose their jobs. IPS management—and, by extension, the Government—are showing scant regard for the well-being of their own employees.41
36. We also received evidence that, in the short term at least, the private sector would not be able to soak up the loss of jobs from the public sector, with Newport currently experiencing “difficult trading conditions”.42 Within the city centre, major businesses such as Marks and Spencer, Monsoon and Next have recently announced plans to relocate from Newport. Newport City Council stated that, “The argument that the private sector will step in to provide replacement jobs is incorrect, as the private sector is already shrinking”.43 In oral evidence to the Committee, Councillor Matthew Evans, Leader of Newport City Council commented that:
I think one of the economic arguments […] is that you are likely to outplace fairly highly skilled workers with high levels of unemployment who will end up claiming benefits and potentially, economically, that has not been considered.44
Economic Impact Assessment 37. Witnesses expressed concern that no Economic Impact Assessment had been carried out on the effect of the job losses in Newport.45 Alan Brown, IPS Group Secretary for PCS commented that “the economic impact study, the equality impact study and a whole range of other studies should have been done before there was any decision taken. I think it is absolutely back to front the way the whole process has gone”.46 On 25 October 2010, the Minister told the House of Commons acknowledged that an economic impact assessment would be produced shortly:
… the IPS will be producing a full impact assessment, which will include an assessment of the economic impact of the loss of approximately 250 jobs. Home Office economists will support the IPS with that analysis.47
40 Ev 17 41 Ibid. 42 Ev 39 43 Ev 34 44 Q 39 45 Q 25 46 Q 60 47 HC Deb, 25 October 2010, col 137
16 The future of the Newport Passport Office
Wider Implications 38. The Welsh Assembly Government expressed concern for the long-term future of Newport, which was already “showing clear signs of being vulnerable to economic decline”.48 Newport City Council agreed that the impact of the job losses were “deeper and longer term” than had been considered by the Government.49
39. Other witnesses commented that the positive effects of the Ryder Cup, held in Newport, could be negated by the job losses and damage the potential for inward investment in the City. Newport City Council believed that:
The closure of the current operation would […] be a set back for a City which had until a few weeks ago been riding high on the success of hosting the Ryder Cup, staging a very successful event on a global stage with an economic legacy of tangible value within their sights. The work of this City in marketing itself for inward investment on that international stage took years to achieve and can be undone by this proposal.50
It continued:
Such a decision will unsettle market confidence in Newport just at the time Newport is seeking a high quality developer for its multimillion pound city centre retail scheme. Such inward investment is vital to the city’s future from both private and public sectors. The IPS closure of the current operation and opening of a smaller customer-service centre would undermine also the marketing campaign to attract more government department relocations to the City on the model of the hugely successful move to the area of the Office for National Statistics …51
40. The Welsh Assembly Government agreed that the closure of the passport application processing centre could impact upon the “confidence and sense of well-being within the local community which is then liable to become ‘depressed’ in the psychological as well as the financial sense. Such loss of confidence can also make the area less attractive to future inward investment”.52
41. The closure of the passport application processing centre at Newport would have a significant economic impact on the city. We find it extraordinary that neither an economic impact assessment nor an equality impact assessment was undertaken before the decision was announced. We strongly recommend that the Government publish its Economic Impact Assessment and Equality Impact Assessment before a final decision is made and that its findings are fully considered.
42. Wales has recently suffered from the cancellation of several key strategic projects which would have brought investment and jobs to Wales, such as the cancellation of the
48 Ev 39 49 Ev 34 50 Ibid. 51 Ibid. 52 Ev 39
The future of the Newport Passport Office 17
project to develop the military training facility at St Athan. In addition, uncertainty remains about the electrification of the main train line between Swansea and London. The closure of the passport application processing centre would be a further blow for the Welsh economy.
18 The future of the Newport Passport Office
5 The Impact of the Proposed Closure on Customers
43. We considered the potential implications of the closure for services provided by the Identity and Passport Service. The Newport Passport Office deals with 47,000 passport applications annually—around 10% of the national total.53 The Minister sought to assure us that the proposed restructuring would not lead to a drop in the services available to the public:
The proposed restructuring would remove back office processing of postal applications from the Newport office and merge the public counter service with the local interview office to form a new customer service centre […] There will be no impact on customers in Wales or south-west England. The new office in Newport will provide all face-to-face services required by IPS customers, including urgent same-day applications, assistance with queries and interviews.54
44. In contrast, PCS argued that the closure of the Newport Office would have a detrimental effect on the service provided by the IPS:
It seems unlikely […] that an office containing only 35 people would be able to deal with the volumes of same-day applications currently dealt with by the Newport Office, which has a counter, a back office to process applications, as well as an Examiner Quality Assurance team and a Fraud Investigation Unit and a printing facility to print passports.55
45. In particular, witnesses argued that the loss of staff from the Newport Office represented a significant loss of specialised expertise to the Identity and Passport Service. PCS claimed that “Newport has [...] been a path-breaking office, used by the agency to trial various new systems and working practises”.56 Newport City Council agreed that the:
Newport Passport Office has always been best in class. A former passport minister, Meg Hillier, praised the Newport office staff for their excellent work, their ‘can-do’ attitude and their exceptional customer care. Newport was the regional office that always volunteered to do any innovative pilot, including the fast track system, which has now been rolled out across the United Kingdom. The exemplary knowledge, expertise and innovation shown by Newport staff—both in customer service and application processing—stood out in the IPS by common assent.57
46. The Newport Passport Office has a reputation for excellent customer care. The closure of the Newport Passport Application Processing Centre would result in the loss to the service of skilled people with significant experience. We are very concerned that a
53 Ev 17 54 Q 62 55 Ev 17 56 Ibid. 57 Ev 34
The future of the Newport Passport Office 19
smaller office in Newport might lead to the deterioration of services for the people of Wales and the South West of England. The Government must guarantee that the same high level of service will continue to be provided by the Identity and Passport Service and set out its plans to ensure this is met.
Welsh language service provision 47. The Welsh Language Act (1993) states that:
Every public body […] shall prepare a scheme specifying the measures which it proposes to take, for the purpose […] of giving effect, so far as is both appropriate in the circumstances and reasonably practicable, to the principle that in the conduct of pubic business and the administration of justice in Wales the English and Welsh languages should be treated on a basis of equality.58
48. The Welsh Language Board highlighted that the IPS currently cannot provide some online services through the medium of Welsh, such as passport renewals, and these must therefore be submitted as paper applications.59 All Welsh language applications for a passport are currently processed at the Newport passport application processing centre.60
49. In written evidence to the Committee, PCS expressed concerns about the current standard of “provision of a face-to-face Welsh language service [which] is already barely adequate and non-existent on Saturdays”.61 This can only heighten our concern for Welsh language provision in the future.
50. The Welsh Language Board expressed concern that removing the ‘back-office’ would affect the IPS’s ability to comply with the Welsh Language Act.62 Newport City Council agreed, stating that:
… Welsh speaking customers’ interests could be endangered with the rapid downsizing or closure of the Newport passport office, jeopardising the capacity and the quality of the service they receive in their own language …63
The Welsh Assembly Government also expressed concern about Welsh-language provision, stating that the proposal raised questions about the UK Government’s commitment to the quality of service to the bilingual population of Wales, with “implications for one of the most distinctive signifiers of national culture and identity across the UK, the living Welsh language”.64
58 Welsh Language Act 1993, section 5 59 Ev 42 60 Q 13 61 Ev 46 62 Ev 42 63 Ev 34 64 Ev 39
20 The future of the Newport Passport Office
51. The Minister stated that Welsh language service would “not disappear from Newport”:65
… one of the reasons why we are keeping the Newport customer-facing office open is so that we retain the capacity that is already there to deal with applications in Wales. Straightforwardly, that will not change.66
Sarah Rapson confirmed that, following changes to the IPS structure in Newport, where the IPS received an application in Welsh, it would be processed in the Newport Office “where we will have the Welsh speakers”.67
52. We welcome the Government’s commitment to continue providing Welsh language provision in Newport. However, we are concerned that the closure of the Newport Passport Application Processing Centre would mean that, in the first instance, all applications from Wales, including those completed in the Welsh language, would be sent to a processing centre outside Wales. There would then inevitably be a delay as the Welsh language passport forms were returned to the Newport customer office for processing. We are concerned that there may be a deterioration in services for Welsh speakers.
Interview Office Network 53. Although this was not the focus of our inquiry, we received evidence on proposed changes to the Interview Office Network (ION) in Wales. There are 56 local interview offices throughout the country, which were set up in 2007 to provide a network of offices to interview all first-time applicants for passports. On 18 October, it was confirmed that offices in Aberystwyth, Swansea and Wrexham would close by September 2011 and would be replaced by a mobile interview service. As previously mentioned, under one plan, the local passport interview office in Newport would be combined with the customer services counter to provide a same day passport service and interviewing facilities.
54. We are concerned that the closures of offices in the Interview Office Network will result in customers in Wales having to travel unreasonable distances for passport services and that specialist local knowledge, useful in detecting passport related fraud, will be lost.
65 Q 96 66 Q 95 67 Q 100
The future of the Newport Passport Office 21
6 Conclusion
55. The Newport Passport Office is the only passport office serving the people of Wales. We are concerned that its significance to Wales and its value to the Welsh economy has not been truly appreciated by the Government. The Government should take this into account when deciding the future of the IPS in Newport. The Government must publish an economic impact assessment of the proposed closure and consider its findings before a final decision is made.
56. We are not convinced by the Government’s argument that long-term savings will be made by reducing the size of the Newport Office. The Office has been responsible for successful innovative programmes and has a cadre of skilled and experienced staff. The rationale behind the closure is based on short-term savings without a proper examination of the long-term advantages of consolidating its services in Newport. The Identity and Passport Service should provide a detailed appraisal of the costs and benefits of consolidation and expansion in Newport as opposed to reduction of services there.
57. Without the retention of the office in Newport, we doubt that the Government’s duty to provide a Welsh-language service to users can be properly discharged.
58. The decision reflects a failure on the part of the UK Government to give adequate consideration to the cumulative impact of its decisions on Wales.
59. The appraisal and consultation process which led to the decision in principle to close the Passport Office in Newport was unsatisfactory and the rationale for the decision is questionable. In particular, the duty to inform and consult the Welsh Assembly Government and the Secretary of State for Wales were not properly discharged. The Government should use the extended consultation period to question again the rationale behind the decision, taking full account of an economic impact assessment, and the whole process needs to be presented in the context of a properly thought-through strategy for the IPS in Wales. We call on the Government to ensure that the concerns raised in our report are taken into account when deciding on the future of the Newport Passport Office.
22 The future of the Newport Passport Office
Conclusions and recommendations
Restructuring the Identity and Passport Service 1. We have some evidence that the Identity and Passport Service has made decisions in the past that have come to be seen with hindsight as short-sighted. Decisions are reversible, but in the case of the Newport Office the impact may be permanent even if the predictions on which the decision is based turn out to be wrong. For this reason we believe it is important to re-examine and re-evaluate the criteria on which the decision was based. They did not include an economic impact assessment on an area which has suffered long-term effects from the closures of the heavy industry on which its prosperity was once founded. Nor did they give any weight to the fact that the Newport Office is the only branch of the service in Wales. For both these reasons, we believe the analysis undertaken by the IPS regarding its cost saving programme was unsatisfactory. These oversights and omissions should be addressed before the final decision is taken. (Paragraph 12)
Retaining a full passport service at Newport 2. The UK Government is committed to pursuing a programme of relocating public sector jobs to the regions. We support this approach. In the light of this, we conclude that there is a strong case for consolidating services in Newport, rather than removing them. We therefore recommend a further re-examination of the economic case for the Newport Office on the basis of consolidation of services there rather than their removal. In its response to this report and to the public consultation, we expect the IPS to give a detailed appraisal of this option. (Paragraph 16)
Consultation with the Secretary of State for Wales 3. In its report on Wales and Whitehall, our predecessor Committee concluded that Whitehall guidance as it applies to Wales has been misunderstood on a number of occasions. We conclude that such a misunderstanding has occurred again. Devolution Guidance Note 4 is clear on the key role of the Secretary of State for Wales and the Wales Office from the start and throughout any process. On this occasion the Secretary of State for Wales was marginalised during the decision process. The decision-making process was flawed by this omission. (Paragraph 19)
Negotiations with the unions 4. The breakdown in the relationship between IPS management and the Public and Commercial Services Union, which has deteriorated to the level of both sides publicly trading claims and counter-claims, is a demonstration of the mismanagement of the appraisal and consultation process relating to the proposed decision to close the Newport Passport Application Processing Centre. (Paragraph 24)
The future of the Newport Passport Office 23
Announcement of the proposed closure 5. The initial announcement that the Newport Passport Office would close was followed two days later by the announcement of the retention of a customer service centre. The piecemeal nature of these announcements suggests the lack of a co- ordinated strategy regarding the future of the Identity and Passport Service in Wales. The manner in which the announcements were made public reflects badly on both the Home Office and the Identity and Passport Service. (Paragraph 30)
The Economic Impact of the Proposed Closure 6. The closure of the passport application processing centre at Newport would have a significant economic impact on the city. We find it extraordinary that neither an economic impact assessment nor an equality impact assessment was undertaken before the decision was announced. We strongly recommend that the Government publish its Economic Impact Assessment and Equality Impact Assessment before a final decision is made and that its findings are fully considered. (Paragraph 41)
7. Wales has recently suffered from the cancellation of several key strategic projects which would have brought investment and jobs to Wales, such as the cancellation of the project to develop the military training facility at St Athan. In addition, uncertainty remains about the electrification of the main train line between Swansea and London. The closure of the passport application processing centre would be a further blow for the Welsh economy. (Paragraph 42)
The Impact of the Proposed Closure on Customers 8. The Newport Passport Office has a reputation for excellent customer care. The closure of the Newport Passport Application Processing Centre would result in the loss to the service of skilled people with significant experience. We are very concerned that a smaller office in Newport might lead to the deterioration of services for the people of Wales and the South West of England. The Government must guarantee that the same high level of service will continue to be provided by the Identity and Passport Service and set out its plans to ensure this is met. (Paragraph 46)
Welsh language service provision 9. We welcome the Government’s commitment to continue providing Welsh language provision in Newport. However, we are concerned that the closure of the Newport Passport Application Processing Centre would mean that, in the first instance, all applications from Wales, including those completed in the Welsh language, would be sent to a processing centre outside Wales. There would then inevitably be a delay as the Welsh language passport forms were returned to the Newport customer office for processing. We are concerned that there may be a deterioration in services for Welsh speakers. (Paragraph 52)
24 The future of the Newport Passport Office
Interview Office Network 10. We are concerned that the closures of offices in the Interview Office Network will result in customers in Wales having to travel unreasonable distances for passport services and that specialist local knowledge, useful in detecting passport related fraud, will be lost. (Paragraph 54)
Conclusions 11. The Newport Passport Office is the only passport office serving the people of Wales. We are concerned that its significance to Wales and its value to the Welsh economy has not been truly appreciated by the Government. The Government should take this into account when deciding the future of the IPS in Newport. The Government must publish an economic impact assessment of the proposed closure and consider its findings before a final decision is made. (Paragraph 55)
12. We are not convinced by the Government’s argument that long-term savings will be made by reducing the size of the Newport Office. The Office has been responsible for successful innovative programmes and has a cadre of skilled and experienced staff. The rationale behind the closure is based on short-term savings without a proper examination of the long-term advantages of consolidating its services in Newport. The Identity and Passport Service should provide a detailed appraisal of the costs and benefits of consolidation and expansion in Newport as opposed to reduction of services there. (Paragraph 56)
13. Without the retention of the office in Newport, we doubt that the Government’s duty to provide a Welsh-language service to users can be properly discharged. (Paragraph 57)
14. The decision reflects a failure on the part of the UK Government to give adequate consideration to the cumulative impact of its decisions on Wales. (Paragraph 58)
15. The appraisal and consultation process which led to the decision in principle to close the Passport Office in Newport was unsatisfactory and the rationale for the decision is questionable. In particular, the duty to inform and consult the Welsh Assembly Government and the Secretary of State for Wales were not properly discharged. The Government should use the extended consultation period to question again the rationale behind the decision, taking full account of an economic impact assessment, and the whole process needs to be presented in the context of a properly thought- through strategy for the IPS in Wales. We call on the Government to ensure that the concerns raised in our report are taken into account when deciding on the future of the Newport Passport Office. (Paragraph 59)
The future of the Newport Passport Office 25
Formal Minutes
Tuesday 25 January 2011
Members present:
David T.C. Davies, in the Chair
Stuart Andrew Karen Lumley Geraint Davies Jessica Morden Jonathan Edwards Owen Smith Mrs Siân James Mr Mark Williams Susan Elan Jones
Draft Report (The future of the Newport Passport Office), proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 59 read and agreed to.
Summary agreed to.
Resolved, That the Report be the Fourth Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
Written evidence was ordered to be reported to the House for printing with the Report, together with written evidence reported and ordered to be published on 10 and 30 November.
[Adjourned till Tuesday 8 February at 10.00 am
26 The future of the Newport Passport Office
Witnesses
Wednesday 10 November 2010 Page
Alan Brown, Paul McGoay and Anne-Louise McKeon-Williams, Public and Ev 1 Commercial Services Union, and Councillor Matthew Evans, Newport City Council
Damian Green MP, Minister for Immigration, Home Office, and Sarah Ev 10 Rapson, Identity and Passport Service
List of printed written evidence
1 Capt Bob Wade and Mrs Pauline Wade Ev 17 2 Public and Commercial Services Union Ev 17; Ev 46 3 Home Office Ev 21; Ev 48 4 Newport City Council Ev 34; Ev 56 5 Welsh Assembly Government Ev 39 6 William Graham AM Ev 41 7 Welsh Language Board Ev 42 8 Veronica German AM Ev 43 9 Councillor Ed Townsend, Liberal Democrat Group, Newport City Council Ev 44 10 Welsh Liberal Democrats Ev 45 11 Identity and Passport Service Ev 57
The future of the Newport Passport Office 27
List of Reports from the Committee during the current Parliament
Session 2010–11 First Special Report Welsh prisoners in the prison estate: follow up: HC 398 Government Response to the Committee’s Ninth Report of Session 2009-10. Second Special Report Wales and Whitehall: Government Response to HC 399 the Committee’s Eleventh Report of Session 2009- 10. Third Special Report Cross-border provision of public services for Wales: HC 419 follow up: Government Response to the Committee’s Tenth Report of Session 2009-10. First Report The implications for Wales of the Government’s HC 495 proposals on constitutional reform. Second Report The proposed amendment of Schedule 7 to the HC 603 Government of Wales Act 2006. Third Report The Severn Crossings Toll. HC 506 Fourth Special Report The implications for Wales of the Government’s HC 729 proposals on constitutional reform – Government’s Response to the Committee’s First Report of Session 2010-11.
Welsh Affairs Committee: Evidence Ev 1
Oral evidence
Taken before the Welsh Affairs Committee on Wednesday 10 November 2010
Members present: David T.C. Davies (Chair)
Stuart Andrew Jonathan Edwards Guto Bebb Susan Elan Jones Alun Cairns Jessica Morden Geraint Davies Owen Smith ______
Examination of Witnesses
Witnesses: Alan Brown, IPS Group Secretary, Public and Commercial Services Union, Paul McGoay, IPS Group President, Public and Commercial Services Union, Anne-Louise McKeon-Williams, IPS Wales & South West Branch Secretary, Public and Commercial Services Union, and Councillor Matthew Evans, Leader, Newport City Council, gave evidence.
Q1 Chair: Good morning. Thank you very much effectively were being told that their jobs were going indeed for coming here this morning. My name is and were left in tears in effect with the announcement David Davies. I am Chairman of the Welsh Affairs that was made on that day. Select Committee. I know one of the panel extremely well, but for the record perhaps you could introduce Q3 Jessica Morden: Who delivered that news to you yourselves. and how do you feel about how the announcement Alan Brown: My name is Alan Brown. I am the was handled? Group Secretary of the Identity and Passport Service Alan Brown: We had been contacted by the BBC on Group of PCS—the Public and Commercial Services the morning of the 8th. They said that they had two Union. sources from the Home Office who had confirmed that Anne-Louise McKeon-Williams: I am Anne-Louise there was going to be the announcement of the closure McKeon-Williams. I am the Branch Secretary for the of the Newport office and they asked if we wanted to Newport office. comment. We were not in a position to comment on Paul McGoay: I am Paul McGoay. I am the Group any of that. I understand that management locally, in President of PCS, IPS. fact the Chief Executive, Sarah Rapson, went down Councillor Matthew Evans: My name is Matthew on the Friday to the office in Newport and made an Evans. I am the Leader of Newport City Council. announcement to staff then. She subsequently had a Chair: Thank you and welcome. I will begin the meeting with all members of staff on the Monday at questioning straight away with Jessica Morden. which ourselves—PCS—were present; I and Anne- Louise, as part of the branch leadership, and Paul, as Q2 Jessica Morden: Perhaps I should start off by the Group President, were present. To be perfectly saying that I am the constituency MP for Newport so honest, she was given a very hard time from members I should declare an interest. Could we just start with there because of the effect it would have on them as how the decision about the proposed closure of the individuals, on the community and on the service Newport office was made? This is to all of you—was generally for not just south Wales but also for south- it expected or did it come as a bolt out of the blue? west England as well. That is how the announcement Alan Brown: It is something that management and was made. IPS had been speaking to us around the so-called “need for cuts”, which the PCS don’t accept. We think Q4 Jessica Morden: Do you think it is quite that the IPS is an organisation which brings money extraordinary in a way that it is a civil servant who is into the Government coffers. If you take out the £57 delivering the bad news about this size of job cuts, million that was spent on consultants in the year rather than a politician fronting up that before last, it actually makes money for the announcement? Government, so we do not accept that there was a Alan Brown: To be honest, that is something that has need for the cuts or for office closures. Management been quite extraordinary. You would think that it is a had been talking to us about the closure of the regional political decision. Civil servants, yes, they deliver office and the majority of the interview office network news, but the decision is made not by civil servants; offices and they were due to do that on 14 October, I it is made by Ministers. The fact that it seemed to be think the date was. However, there had been some sort a civil servant who was left to carry the can and to of leak which management initially seemed to imply deliver that news was quite extraordinary. In fact, for that PCS were responsible for, but have since accepted quite some time afterwards, it seemed to be civil that we were not. For the people of Newport and the servants that were left to defend the decision, which members in Newport, it was a bolt out of the blue. It we do not think is defensible in the first place. In came on Friday 8 October and we had members who terms of quotes in the press, etc, it seemed to be civil Ev 2 Welsh Affairs Committee: Evidence
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans servants and the chief executive who were left to Glasgow in 2008; they took postal production out of make that decision and to defend that decision. the Glasgow site, with the loss of 150 jobs, albeit with no compulsion. They were voluntary redundancies in Q5 Jessica Morden: Do you accept the IPS rationale the end. The rationale then, as now, was, “Oh, we for why the office should close in terms of the ID have to improve efficiency and so forth. We have too cards going and operational improvements and, I much excess capacity in terms of staffing.” Over the understand, in terms of the Newport office having the last couple of years, they have had to put postal wrong kind of floor and windows? production back into the Glasgow site, utilising the Alan Brown: That was one of the most bizarre remaining staff there. That has had a detrimental effect documents that we have seen, with the wrong type of on the service because it has meant that they have had windows—leaky windows—and solid floors, I think to shut down the main counter in Glasgow at least two was what they said. As Matthew will probably tell days a week in the peak periods to bring the counter you, the council had been in discussions with the IPS staff back to examine the postal work. We were told about providing alternative accommodation in at the time in 2008 that Glasgow would never have Newport. But we certainly do not accept the need for postal work again. So they have a history of short the office to close. In fact, we were at a meeting term, knee-jerk decisions. yesterday as part of the 90-day consultation, where in one meeting we were told by IPS management that Q8 Chair: Thank you, Mr McGoay. Just out of there are 50 excess jobs at the moment across the interest, which civil servant was it that told you there whole of IPS as a result of ID cards going and the would be no savings, because I think we might want second generation of biometric passports being to take that up with the Minister later? scrapped. What they are saying is 50 of those are Alan Brown: I will just get my notes from yesterday. going. As a result of internet applications, they are I will come back to that if that’s okay.1 now saying they have now reviewed and renewed their figure for internet applications because of a new Chair: Don’t worry. In the meantime, I will bring in computer system that is coming in. They are saying Alun Cairns to ask questions. that over the next few years they expect 45% of applications to be made online via the internet. They Q9 Alun Cairns: Thank you. Mr Brown, or any of have said that is going to be responsible for the 300 your colleagues, I want to come back to the excess jobs, which is the Newport office. But we went announcement because that was Ms Morden’s first into a second meeting yesterday afternoon during question. It was extremely important in terms of how which management then said that the internet and the the news became public because it did not treat the new system they are bringing in has been scaled back staff with the respect that they deserve in terms of the somewhat because of parliamentary cuts, because of consultation. I know that you said that you had a call Government cuts, and, therefore, there will be from the BBC that morning about it. Some have absolutely no savings as a result of applications being suggested that the unions were responsible for leaking made online. In fact, what they are actually doing is it. Is that true or not? separating the application from people having to Alan Brown: Not at all. provide their passports etc, so it just doesn’t make Paul McGoay: Not at all. The BBC journalist we any sense. spoke to—it was Alan who spoke to him—told us that the leak had actually come from somewhere in the Q6 Chair: Thank you very much. It is very important Home Office. evidence. Are you telling us that you have been told Alan Brown: He said that it was two separate sources there will be no savings as a result of this? from the Home Office who had given the information. Alan Brown: Yes. Chair: Thank you for that. I know this is very Q10 Guto Bebb: As a north Wales Member, some of important, but perhaps, if I may just suggest, we ought my constituents have asked me why I am involved in to try and be as quick as we can with the questions an inquiry into the Newport Passport Office. Could and answers because there are quite a few. you confirm that currently all applications made in Wales, from an address in Wales, are actually Q7 Jessica Morden: One final question then. Do processed by the Newport office? Newport process any of the ID cards work at all at an Anne-Louise McKeon-Williams: That is correct. office, and would you think it is true to say that there might be a history in the past of IPS making short- Q11 Guto Bebb: That is correct. Therefore, the term decisions that you then have to reverse? question then is: why would you argue that Wales Paul McGoay: Most definitely. If you look at 1999 does actually need a separate passport office? when we had the major passport crisis, the cause of Paul McGoay: Why would we argue? that crisis was that IPS, or UK Passport Service as it was then, had been running down staffing not through Q12 Guto Bebb: Would you argue that Wales does job cuts but through attrition. A new computer system need a separate passport office? was then introduced, and as a result of the tight Paul McGoay: We would, yes, and other vital services staffing that they had, when the system went belly-up are provided from that office as well, like the Welsh basically, they could not deal with the backlogs that language provision and so forth. So, yes, we would. were created because they did not have enough staff or capacity to do so. We had a similar thing around 1 See Q18–19 Welsh Affairs Committee: Evidence Ev 3
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans
Q13 Guto Bebb: In the same way, would you Q16 Guto Bebb: Due for closure. So, in other words, confirm that the Newport office deals with every we will end up in a situation where there will be no single Welsh language applicant for a passport? provision apart from the counter service in Newport? Paul McGoay: Currently, yes. Anne-Louise McKeon-Williams: That is correct. Anne-Louise McKeon-Williams: Currently, Welsh language, but some of the applicants, if they want to Q17 Guto Bebb: North Wales will end up going back process their application—say if they lived in to Liverpool, I suspect? Wrexham—quite quickly, but an English application, Paul McGoay: That is right. then they could go to the Liverpool Passport Office. Anne-Louise McKeon-Williams: That is correct. The majority of Welsh applications or all Welsh Chair: Can I bring Councillor Evans in? applications will be processed in Wales and if you Councillor Matthew Evans: Thank you very much, need Welsh language provision that will be done in Chairman. From a political perspective, with regard to Newport. the announcement itself, I was in the office on the Friday afternoon and we had a tip-off, sadly, from the local paper, the South Wales Argus, stating that this Q14 Guto Bebb: What sort of discussions have you announcement would be made. It came completely out had in terms of the proposal to close Newport, which the blue from our perspective. We found it even more would provide that service in the future? Have you irrational, I suppose, due to the fact that being a had any indication that those issues have been member of the Newport Limited board we have had considered? long and detailed discussions with them about finding Paul McGoay: As far as we can tell, no. They came them new premises, so it was a complete shock. I will back shortly after the announcement, as you will be say that we have cross-party support from every other aware, and said that there would be a customer service leader in south-east Wales whether it is Plaid, Lib centre in Newport. That was announced a couple of Dem, Conservative or Labour. The issue is more about days after the first announcement, after a meeting the effect it will have on Wales as a country. You between Sarah Rapson and the Minister for Wales. As mentioned about the Welsh language. Clearly, in far as we can tell, that customer service centre will Newport it is not a Welsh-speaking area but there are only involve basically taking in applications. It is a lot of passions about the language. People currently, likely that applications will be processed, once they as I understand it, who use Aberystwyth and Swansea, are taken in from that office, elsewhere. Recently, a where there is a predominantly large area of Welsh speakers, at the moment would have the opportunity manager went into the Newport office and said to to go to Newport, and you have the back office staff some staff there and people on the trade union side and functions who might be able to assist. This is that it would be very unlikely that there would be the another area where, should all the back office same-day premium service provided from that functions go, they will have a far smaller pool. You customer service centre. I don’t think IPS have also got the security implications as well, which management have given any real consideration to the we need to highlight and stress. The Passport Office, impact of these plans on Wales. I think they are I believe, has been open since 1967 and there is a engaged in a short-term cost-cutting exercise. That wealth of experience there in dealing with fraud was clear during some of the preliminary discussions investigations. Now, you can’t just put people on a we had when they were looking at various offices and training course for the experience they have gained. things like that, and they were talking about Newport. Clearly, at the moment you have the back office staff We said, “Have you considered the political who can help and assist, and that service is going to implications of this, and the economic implications, be lost to Wales as well. given the state of the economy in south Wales, in Paul McGoay: Can I just make one very quick point particular, and the likely reaction of the Welsh about Welsh language? I do have a document that we Assembly and Welsh MPs?” The response was as received yesterday which I can send to the Committee. simple as this. It was, “That’s a matter for the It is the equality impact assessment. There is a section Minister. Nothing to do with us.” To answer your on cultural impact and the legal requirement to question, we have not had many constructive provide a Welsh language service. The mitigation they discussions around service provision in that regard have set against that openly says we can consider the because I think they are simply bent on closing the option to completely remove the service of providing office. Welsh language applications. That is in there as a mitigation. Chair: We are going to come back to that in a Q15 Guto Bebb: Just to finally press you on that moment. A very quick question from Mr Bebb and issue as well, in addition to the fact that obviously then Mr Brown is going to let us have that name. there is the threat of closure to Newport, is it also the case that the regional offices currently serving people Q18 Guto Bebb: Just to have it on the record, the in Wrexham, people in Aberystwyth and so forth, are Welsh Language Board have presented us with also under threat? evidence which states that there is no Welsh language Paul McGoay: You mean the interview offices? capacity whatsoever in Liverpool. Is that your Guto Bebb: Yes. understanding? Paul McGoay: Yes, they are. They are due for Paul McGoay: That is my understanding. closure. Anne-Louise McKeon-Williams: That is correct. Ev 4 Welsh Affairs Committee: Evidence
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans
Alan Brown: The name of the civil servant you were Westminster and the fact that they did not consult with asking for was Louise Horton. you at all? Councillor Matthew Evans: We are a Conservative Q19 Chair: She has said that there would be no and Lib Dem administration. We have been a savings as a result of this? Conservative and Lib Dem administration for the past Alan Brown: Yes, as a result of internet use. two and a half years. Naturally, I was disappointed that there had not been any consultation. Clearly, Q20 Geraint Davies: Councillor Evans, following making a non-political point, I would have hoped that the previous question, would you accept in essence any leader of any council does not want to hear this this decision inherently discriminates against Wales? news from a local paper, and I do not want to go into It seems the position of Wales is not just as a second- the ins and outs of how the information came to public class nation, but as a nation that if you want to leave knowledge. But one would have hoped we would have it you have to go into England to get out. It is as if had the information provided beforehand so that at we are a sort of back cupboard of England. Is that the least we would have the opportunity to be involved way you feel? and engaged at an earlier stage. The last discussions we had were about expanding the service rather than Councillor Matthew Evans: What I will say is that I removing the service altogether. have a slightly different view from my colleagues over here on the one issue about understanding and accepting cuts. We reckon that if there had been, to Q24 Owen Smith: I see from your evidence that you conducted an analysis in the council and with be honest, a 10% cut across the board, then I wouldn’t consultants of how many jobs will actually be lost as be here today. Clearly, the issue has to be—bearing in the wider impact of this. Could you tell us about that? mind that Newport has been so successful in attracting Councillor Matthew Evans: What we have to bear in jobs from London—that we are using the economic mind from a Newport perspective is that it is not just argument, the excellent location of the city, to say we the back office function and jobs which are being lost. need and should have more jobs coming into Wales, There are a number of jobs in the private sector which bearing in mind that Newport has its fair share of will also disappear. It is the effect on the local trade deprived areas. It does look from the business case, as and on the city itself. Newport has been going through I understand it from the figures, that potentially 300 some very difficult times. We have had recent jobs needed to go by 2012, and remarkably Newport announcements, for instance, that Marks & Spencer has 300 jobs. That does arouse suspicions. are thinking of moving out of the city, and Next and Monsoon. This just adds to the problem of perception Q21 Geraint Davies: Mr Brown has already made we have at the moment. Believe it or not, the Passport the point that there does not seem to be a clear cost Office is the second largest employer in the city case. You have made the point now that the finger has centre. We have very few jobs in the city centre and been pointed at Newport. I guess I am making the clearly many other local traders rely on the business. point that Wales is a nation. There is a Welsh language Our business case would be that we have excellent issue as well. We would expect, in some sense, special communications; we are on the M4 corridor, with easy treatment rather than discriminatory treatment. Would access to London and south Wales. These city centre you accept that, given that Wales is very rural, if you jobs we can ill-afford to lose at the moment. look at the actual cost to the consumer as opposed to the producer of people having to travel to get their Q25 Owen Smith: How many in total do you think passports, if you take out Newport, there would be an we will lose? What is the multiplier? I am sure I have enormous on-cost to the people of Wales, who on read in your evidence that it is nearer 500 than 300. average have less money and are being harder hit in Councillor Matthew Evans: I was going to say it is this recession? nearer 500 than 250. These figures have been done Councillor Matthew Evans: Yes, absolutely. That is independently of the council. Clearly, one would hope whether people are coming from Birmingham, the that the question about the economic impact south-west of England or Wales. Yes, the customer assessment, which I understand has not been done at service will undoubtedly suffer. the moment by the Passport Agency, needs to be done.
Q22 Geraint Davies: If the decision was based on Q26 Jonathan Edwards: In terms of the timing of the customer as opposed to just costs, it would point the announcement, of course we had the Ryder Cup away from doing Newport, and as Mr Brown has said, going on at the same time, which was more than just if it was done on cost, it would probably, again, not an event: it was a huge rebranding exercise for the discriminate against Newport. If it was on the basis of city and south-east Wales. How disappointed were you nationhood, we should not hit Newport. Presumably, with the exact timing? you will be strongly continuing to campaign that we Councillor Matthew Evans: It has been a roller- keep the service for the people in Wales in Newport? coaster of a ride because the Ryder Cup was a Councillor Matthew Evans: We certainly will be, yes. fantastic success not just for Newport but for Wales on the world stage and the positive publicity we got Q23 Owen Smith: Councillor Evans, you are out of that was immeasurable in some respects. Then obviously a Conservative leader of the council. How the following week to come down to announcements do you feel about the fact this is being done from the Passport Office and then from Marks & by a Conservative-Liberal Government here in Spencer, it has been a very difficult time, particularly Welsh Affairs Committee: Evidence Ev 5
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans as we are in the process of hoping to redevelop the roughly? Do you want to come back to us perhaps city centre. It has clearly come as a bitter blow. later on on that? Paul McGoay: In terms of the interview office Q27 Stuart Andrew: I wonder if you could provide network? us with specific evidence as to the deterioration in service that you expect the people of south Wales and Q29 Chair: Yes. You were talking about a figure of south-west England to have as a result of this 300,000 people being interviewed and it was going to proposal. go up to 700,000, but now it is going to go to 150. Alan Brown: At the moment we have a situation What percentage would you say results in either where 700 applications are made over the counter on further action or a case of fraud? a weekly basis at Newport. We have also been told by Paul McGoay: What I guess management have said another member of management—in fact the members in the past, and some politicians, is that very few in Wales, in Newport, were told by a member of fraudulent applications have been detected through the management—that, as a result of the changes and the interview office network, but there are two things reduction in the service, the premium service, which about that. One of its primary purposes was not just is the same-day service, will go as a result of this. Our simply fraud detection: it was fraud deterrence. The fear is that all processing work will go. If you look at interviews that take place at the interview office the numbers, they have said up to 45 jobs would be network are quite invasive interviews in many ways. retained. Management have since told us that that is The interviewer has quite a lot of information about actually 35. Forty-five is the full-time equivalent. So the person they are interviewing. The interviewer is it is 35 jobs that will be retained. A customer service trained to detect fraud indicators and things like that will be there and an interviewing facility, but the in terms of behaviour, language and so forth. So it is processing work will then have to go elsewhere—to deterrence. One of the interesting things in the England or wherever. There is clearly a knock-on documentation we have been given is that they will effect there as well just in terms of people physically not actually say how many interviews, for instance, getting their applications and then getting them sent have been cancelled when someone has gone to on to be processed elsewhere. There is a real problem request an interview, put in an application and with that. There is also an issue around the interview cancelled the interview with the interview office office network. I think as your colleague from north network. Wales mentioned, there is only going to be the one office in Wales which, as has been said, is going to be Q30 Chair: How many have cancelled and not in Newport. They are talking about peripatetic teams, reapplied? mobile teams, that are going around using shared Paul McGoay: We do not know because the facilities and carrying laptops to carry out interviews. information in the document we have been given That is something we have real concern around and around that has been redacted, so we cannot actually that will clearly have an impact on the level of service see it. that people can expect elsewhere in the country as Chair: We have the Minister coming in a minute so well. One of the things that we are really concerned somebody might want to ask that very question. about is that the Government have said that there are four different real issues that affect people. One of the Q31 Stuart Andrew: I think this brings up a very top four issues is identity fraud. They are talking important point about the security of the British about cutting the number of interviews from 300,000 passport really. Given that we are going to have a to 250,000 as part of the customer service network— smaller office, or that is being proposed, what you it used to be the interview office network—when are basically saying is that the security of the British previously, they were talking about increasing that to passport really is at stake with this? 700,000 to try and make sure that fraud was brought Paul McGoay: Yes, I think so. down and to try and make sure that fraud levels were Alan Brown: Just to add to that, one of the things we kept low. They are talking about cutting that. If they have been saying is that the local knowledge that are talking about identity fraud as one of the top four people have in the communities in terms of the issues for people in this country, to then cut the questions that have been asked of people who are number of offices, cut the number of jobs, processing brought in for interview is critical in this, and that staff, then that is a real fear that we have got—that knowledge is going to be lost because it is going to people’s identity is not going to be safe and their be people coming in from elsewhere. passport as a product is going to be less safe as a result of these cuts. Q32 Jessica Morden: The Minister would argue in Anne-Louise McKeon-Williams: Can I just add to all the questions that we ask him that it’s not true to that? The main fraudulent applications are detected by say that Wales is losing its passport office. But, quite humans rather than by interview, through the clearly, if you are going down from 300 people to 45 processing of applications. In Newport, we have got or 35, but you are not sure quite yet what that office an outstanding service. We have the best fraud will do, it would be impossible to do the four-hour department. We have trialled all the pilots. We are a service and presumably the one-week service. I don’t victim of our own success in many terms. know. But, also, presumably, out of that 35, you would have to have your Welsh language team as well within Q28 Chair: What percentage of interviews result in that 35. Is it true to say that the service cannot further action or a case of fraud being discovered— possibly be the same for people in Wales? Ev 6 Welsh Affairs Committee: Evidence
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans
Paul McGoay: It can’t. I think that is absolutely right. Q37 Alun Cairns: Can I follow up on a question that On the Welsh language, I would just come back to Mr Davies asked you before? I think the phrase that the equality impact assessment I mentioned as well, he used was a “chink in the armour”. Is that not a because I think that’s key. I do not have a copy with damning indictment on your colleagues in the other me today, but we are happy to share this with the passport offices elsewhere, maybe union members as Committee because it is not a restricted document or well, because they cannot pick up on the fraud that anything like that. It openly says can we consider you are suggesting? removing the option to complete forms in the Welsh Paul McGoay: I don’t think that is the case. language as a mitigation against the fact that the Alan Brown: I don’t think that is the case. I think people who actually deal with the Welsh language they do pick up on fraud. applications are likely to be made redundant? Alan Brown: I think that is absolutely right. Wales is Q38 Alun Cairns: I want to press you. I am going losing its passport office—there is some sort of back to the chink in the armour that was suggested. counter facility—if this proposal goes through. Are you saying that your colleagues elsewhere are not However, as part of the equality impact assessment up to the standard of those in Newport, or that they Paul mentioned earlier, what management have given simply will not be able to identify the fraud for us in terms of race is they have said there is no impact whatever other reason? adversely affecting specific races, which I think Alan Brown: One of the big issues for us is having a speaks dividends about how IPS feels about the Welsh locally based service. At the moment in the interview as a race. office network, where people have been brought in to give more information about passport applications, Q33 Jonathan Edwards: In terms of the assessment one of the big issues is around local knowledge. If you have done there in terms of the Welsh language, somebody is making a fraudulent application who has do you think that the proposals are in danger of actually come into the area and thinks this is an area breaching the Welsh Language Act? where it is easier to get a passport, they can do that. Paul McGoay: The paragraph I’m looking at says that But the questioners and interviewers have been trained legislation dictates that as far as “practicable”, the in such a way that they can ask questions about the Welsh language is given equal footing with English, local area, give that local knowledge and can identify but how is “practicable” defined? They are thinking if there is a problem with the answers they are getting. about getting round this—trying to get round the However, as a result of the change, that local legislation. That is what that section says to me. We knowledge is going to go because we are going to raised that yesterday and we said that is absolutely have these mobile teams coming into areas who do appalling. not have that local knowledge. Also, there is the fact that we are actually reducing the number of Q34 Geraint Davies: I have two quick questions. interviews. Effectively, 300,000 interviews at the One is that you have already mentioned that there is moment are first-time applicants. They are now a reduction in the deterrence and detection of fraud at talking about 250,000 interviews that are taking place. risk here. Are you in essence saying that this may They have told us they are going to be targeted create a chink in the armour, given that we face a interviews, but management have also told us that significant terrorist threat in Britain? there are 5 million applications in the UK for Paul McGoay: I think that is entirely possible. passports every year. If they are to do proper targeted interviews, then they would have to have 5 million Q35 Geraint Davies: Okay, that’s fine. Secondly, on applications a month to try and make sure that they the customer service network—I live in Swansea and are properly targeted. We have a real concern about I have used the four-hour service; it takes me nearly who is going to be targeted. There is also an issue two hours to get there and two hours to get back, four here about ethnicity and race, etc that we are very hours, of course, eight hours to do this. Are you now concerned about. Who is going to be targeted? I might saying that if you take away this four-hour service, be okay but others might not be. They have given us not only will we have massive impacts on the retail no indication of how people are going to be targeted footfall in Newport and the local economy, but from and that is a real concern for us as well. the point of view of customers who I represent in Chair: I appreciate you feel strongly, but I am trying Swansea, they will no longer be able, within a day, to get everyone in. like I did for my mother, to get a passport? Again, it is a second-class service or no service for the four- Q39 Owen Smith: A question for Councillor Evans, hour service or that same-day service for people of if I may, and then two questions, Chair. With regard Wales and south Wales. to the 500 people who are going to lose their jobs, Paul McGoay: That follows directly from what that what are the prospects in Newport right now that those manager said. We certainly strongly suspect that there people will find alternative employment? will be no same-day service at the customer service Councillor Matthew Evans: Extremely limited. I centre. think one of the economic arguments again is that you are likely to outplace fairly highly skilled workers Q36 Geraint Davies: This customer service as with high levels of unemployment who will end up opposed to interview is a joke really, isn’t it, in terms claiming benefits and potentially, economically, that of south Wales people? Thank you very much. has not been considered. Newport has been struggling Paul McGoay: Yes. over the past few years. We are still suffering in a Welsh Affairs Committee: Evidence Ev 7
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans way. One of the reasons the Urban Regeneration Q45 Guto Bebb: The point you are making in effect Company was set up was because we lost all the is that somebody trying to make a fraudulent passport manufacturing jobs at Llanwern. We are at a fairly application, when invited for an interview, might critical time at the moment and every single one of decide not to turn up? those jobs is desperately needed. Paul McGoay: Yes.
Q40 Owen Smith: I think we can all see that this is Q46 Guto Bebb: So, in itself, it works as a deterrent. a real blow to Wales. Can you tell us what the Will the closure of Newport have an effect on the engagement involvement with the Wales Office, the number of interviews taking place in Wales? Secretary of State for Wales, in particular, has been in Paul McGoay: The closure of the interview office engaging in this issue? network offices in Wales will. The interviews that take Councillor Matthew Evans: I was fortunate enough, place at the Newport office will be counter interviews to be fair to the Secretary of State for Wales, in the primarily for fast-track and premium. We were conversations I have had with her; and I think it is making that point quite generally in terms of the interview office network, obviously in Wales, which is important to recognise that we are safeguarding 45 also facing closure, and there are closures of interview jobs on one line, but clearly we are losing 80% of our offices more widely across the UK as well, about 20, work force. I am grateful for the fact that we have probably with the loss of about 150 jobs threatened at managed to at least salvage something. Clearly, we the moment. want to salvage far more than we have got at the Alan Brown: The other important point to make is moment. The meeting with the Minister, I think, was that they are actually downgrading the grades of the constructive and helpful. Nevertheless, I think we interviewing officers as well, which speaks volumes, have a long way to go and a tough battle to fight to I think, in terms of how they look at this. ensure that these jobs remain in Newport. Q47 Stuart Andrew: If somebody is invited for Q41 Owen Smith: Have you asked the Secretary of interview and does not turn up, is there a follow-up State for Wales to continue to make the case for on that? Does the Newport Office do anything to find keeping the jobs in Newport, and what did she out why that person did not turn up? indicate? Anne-Louise McKeon-Williams: I think perhaps you Councillor Matthew Evans: Very much so. In fact, I are confusing the interview office network, which are went a step further than that. We have—here is a bit small satellite offices. I will just explain. of advertising—“Newport Open 24/7”. She has given Councillor Matthew Evans: Satellite offices. an undertaking that every single Cabinet Member will receive a copy of this brochure highlighting the Q48 Stuart Andrew: I understand that, but you said, benefits of working and living in Newport. It is a very if Newport closes, there are fraudulent applications cost-effective area for people to relocate to. This is an and the security of the passport might not be as strong ideal opportunity for us to save some money. as it is at the moment. I am trying to understand: if Chair: As an ex-Newport boy myself, I can the person did not turn up for interview, is nothing sympathise with that. done to chase that up? Paul McGoay: Things like that would be dealt with Q42 Guto Bebb: Can I just take you back to the issue by the fraud and investigation unit. I imagine in some of the interviews and the potential risk to passports cases there are follow-ups, yes. by reducing the number of interviews? You made an interesting point, and I just want to clarify it, in terms Q49 Stuart Andrew: And that would still happen of the fact that you believe the interview process in even with a smaller office? itself is a deterrent. But there are no figures available Paul McGoay: Would you say that again? for the number of people who do not turn up for that interview. Is that what you were saying? Q50 Stuart Andrew: That would still happen with Paul McGoay: The figures are available but they have the proposed smaller offices? been redacted. Paul McGoay: Yes.
Q43 Guto Bebb: They have not been made available Q51 Susan Elan Jones: I would like to ask the union representatives about the whole consultation period, for us to consider? the statutory 90-day consultation period, and to what Paul McGoay: Not yet. We have a document about extent you felt you were taken seriously in that? Also, the future of interviewing that management have do you feel that the Identity and Passport Service were given us, but that key bit of information is redacted in receptive to your representations, or do you feel it was the document. a bit of a foregone conclusion? How do you feel that process panned out? Q44 Chair: What was the reason for redacting that, Paul McGoay: Currently, we are extremely Mr McGoay? dissatisfied with how the 90-day consultation is going. Paul McGoay: They say they spoke to security in the We are four weeks in. Getting information out of IPS Passport Office Security Unit and they think there management is like getting blood out of a stone. I will might be a risk in making that information public. But give you an example. Yesterday, we were discussing we have also pressed them to rescind that redaction. a document the PCS had seen as far back as August. Ev 8 Welsh Affairs Committee: Evidence
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans
It is called the Direction of Travel document. We were there should be investment in that. We think it should shown that in August and they took it back off us in be a localised service and we think there is definitely the meeting. They said, “You can’t actually keep this.” a case to keep the Newport office open. That document, we think, is relevant to some of the arguments that are already in the ministerial Q56 Geraint Davies: Presumably, you are saying in submissions now. terms of a local service serving Wales and in terms of this issue of risk management of terrorism, where Q52 Chair: What was the title of that document? there is less capacity in Newport, obviously, if you Paul McGoay: It was called the Direction of Travel were a rational terrorist, now that it is completely document. decimated in Newport, you would probably think Anne-Louise McKeon-Williams: It was issued on 26 about applying in Newport instead? It seems to me on August. a variety of fronts that we are going in the wrong Paul McGoay: We already had sight of that document direction. at one stage. They took it off us. When we asked for Alan Brown: You could easily come to that it yesterday, they said, “We have got to be clear about conclusion, yes. whether we can give it to you or not.” Q57 Owen Smith: Are you aware of a document Q53 Chair: I am sure the members will be asking called Full Data Pack for the Newport Office Closure the Minister for it as well. that says on 31 August 2010 “the IPS Management Paul McGoay: It is a drip feed approach to Board decided to recommend to Ministers that information, and that is not the way to conduct Newport should close”? consultation. It makes PCS think, as we have said in our submission to you and we have discussed a bit Paul McGoay: The Full Data Pack for the Newport today, that there is a thin basis being provided in terms Closure? of the submission and the arguments we have seen for Owen Smith: Yes. the decision that has been made. We think either there Councillor Matthew Evans: Can I just say, we have is further documentation out there that they are not got that. sharing with us and they are being dishonest, or the decision has been made on a thin basis. I can’t see Q58 Owen Smith: You have seen that? any alternative. Councillor Matthew Evans: I was made aware of this, Alan Brown: We are also very concerned that the thankfully, in discussions with the unions. I decision seems to be made and the justification for it understand that the managing director received a copy is now being made after it, and we are getting of it yesterday, having made a request sometime ago. documents. The document we got yesterday, which Clearly, to look through all the evidence in that we were told was around something like the Direction submission with the time given is not sufficient. of Travel document on which the Minister based his decision, was produced at the end of last week. So Q59 Owen Smith: It clearly makes plain that the they seem to be working backwards from the decision. decision was made at the end of August that Newport would be targeted for closure. Q54 Chair: Do you believe this is a foregone Paul McGoay: Yes. conclusion, gentlemen? Chair: That is something we will be putting to the Paul McGoay: No. Minister in about 60 seconds. Can I just ask Jessica Chair: No. Good. Morden to ask the final questions? Q55 Jonathan Edwards: I just wanted to explore Q60 Jessica Morden: I want to take you back to one some alternatives to the current proposals because, point about the economic impact study. We have been obviously, an argument that is made in terms of talking a bit about the drip, drip effect of all this relocating jobs out of the south-east is that operational information coming out. When do you expect to get costs are far cheaper in the traditional manufacturing areas. Is there an argument for consolidation in that and don’t you feel that should have been right at Newport rather than closure? Secondly, if there are to the start of the process rather than towards the end? be job cuts and the Government are intent on pushing Paul McGoay: We would like it as soon as possible, that forward, wouldn’t it be better to share the pain but the way things are going at the moment it is very, across the national and regional offices across the UK very difficult to get information out of them. I wish I rather than just targeting Newport solely? could be more helpful. Alan Brown: I think you could make that case. We Alan Brown: I think the economic impact study, the don’t accept the need for any job cuts or any office equality impact study and a whole range of other closures. We think, in fact, given the issues around studies should have been done before there was any identity fraud, given what the Government have said decision taken. I think it is absolutely back to front on this, we should actually be investing more, rather the way the whole process has gone. than making cuts. This is an organisation that makes money for the Government and brings money in. Now Q61 Chair: Thank you very much. Could you just we have got rid of the consultants—£57 million, finally confirm that it is 300 full-time jobs that are which is almost the same as the spend on staff in the being lost, or would be lost, if this decision goes passport service a couple of years ago—we think that ahead? Welsh Affairs Committee: Evidence Ev 9
10 November 2010 Alan Brown, Paul McGoay, Anne-Louise McKeon-Williams and Councillor Matthew Evans
Alan Brown: Yes, but they are now saying that there Chair: Thank you very much indeed for coming up will be 45 full-time equivalents and 35 that will be and giving evidence to us today. You are very retained as part of the new office. welcome to stay behind for the next session.
Witnesses: Damian Green MP, Minister for Immigration, Home Office, and Sarah Rapson, Chief Executive, Identity and Passport Service,2 gave evidence.
Q62 Chair: Good morning. Thank you for coming with queries and interviews. All these services will this morning. I understand you want to make a very continue to be provided in Welsh and to the same short three-minute statement, which is absolutely fine, standard as those available in the rest of the UK. Now, but we are very short of time, so I suggest we go I recognise this will be small comfort to the staff in ahead right away and then start the questions. the Newport office who might lose their jobs. IPS is Damian Green: Fine. Thank you very much for committed to supporting them throughout the process allowing me the chance to make the statement about and will do everything possible to avoid compulsory the proposed closure of the Newport Passport redundancies. Application Processing Centre. Since these proposals Chair: Thank you very, very much indeed, Minister. were revealed on 8 October, there have been a number Perhaps I can ask Jessica Morden to start the of inaccuracies and misconceptions that I think it is questions. important to correct. The passport service is paid for through the passport fee, which covers the cost of a Q63 Jessica Morden: I suppose I should declare an domestic passport service and consular services interest in that, obviously, I am a constituency MP and overseas for British citizens. Passports have to be therefore I have an interest in that way. Can I start delivered within this fee structure and be available to with how the decision was made? The PCS and the the public at an economic rate. When efficiencies can council have told us this morning that this decision be made through better working, they should be. came as a bolt out of the blue for them and that it was Indeed, they must be. A combination of falling yourself as the chief executive who delivered the demand for passports and significant improvements in news, which I find quite extraordinary given the scale productivity mean that the Identity and Passport of the job losses, rather than a politician giving this Service has excess capacity in terms of both its staff announcement. Also, the Welsh Assembly and its office estate. IPS has already taken steps to Government and the Secretary of State for Wales did reduce this overcapacity. In 2008, the application not seem to be aware of the decision before it was processing centre in Glasgow was closed, and this was made. Do you accept that this is an announcement that followed in 2009 by the closure of two interview has been handled extremely badly? offices, with a further 10 interview offices closed Damian Green: No, I don’t. If you like, I will go earlier this year. More recently, the voluntary early through the chronology of what happened so that the release scheme run across the Home Office resulted Committee can be aware of the full facts. I have given in 234 staff leaving IPS, around 120 from passport some of the history and the reasoning for it in my operations. Unfortunately, these reductions are not introductory statement. In July, I was notified of an enough. By 2012, IPS is forecasting the need to intent to bring forward restructuring proposals with reduce staff by a further 250 posts and remove around no detail about that. On 13 September, I received a 25% of its office space. There is no way to remove submission from the IPS recommending restructuring this amount of capacity and space without closing the of the network and at the same time, over that period, application processing centre. IPS currently has five negotiations were going on with the unions. So I processing centres, in Belfast, Durham, Liverpool, cannot understand why they describe it as a bolt from Newport and Peterborough. A thorough and objective the blue because they had been talking to the IPS assessment undertaken earlier this year resulted in the about this for some time. I informed the Secretary of proposal to close the Newport processing centre. This State for Wales on 5 October and then it was revealed assessment was based on a range of criteria, but the on 8 October. It was leaked. These things happen. We primary consideration lay in the ability of the agency had clearly intended— to achieve the right level of efficiencies while retaining sufficient operational capacity to maintain Q64 Chair: Are you therefore saying that you the current high level of service. Contrary to some discussed this with the unions and that there had been media reports, the proposal will not result in the discussions with the unions before this leak? closure of Wales’s only passport office. The proposed Damian Green: Sarah, would you like to answer that? restructuring would remove back office processing of Sarah Rapson: We started talking informally with the postal applications from the Newport office and merge PCS through June and July. We shared with them the the public counter service with the local interview thinking that we had been doing and the analysis that office to form a new customer service centre. This is we were undertaking all the way through that process similar to the situation in Glasgow in 2008. There will in advance of the formal consultation. For them to say be no impact on customers in Wales or south-west that they had no prior knowledge is actually not true. England. The new office in Newport will provide all face-to-face services required by IPS customers, Q65 Chair: You have written evidence perhaps of including urgent same-day applications, assistance that? 2 See Ev 57: IPS response to PCS oral evidence. Sarah Rapson: Pardon? Ev 10 Welsh Affairs Committee: Evidence
10 November 2010 Damian Green MP and Sarah Rapson
Chair: I absolutely believe you, but you would have would ask is that this proposal seems remarkably written evidence to be able to produce to that effect? similar to one that was made two years ago when the Notes of meetings, that sort of thing? then Minister looked at a proposal to close the Sarah Rapson: I am sure we can find something. I Newport office and said, no, we had to have a major know that these meetings took place.3 passport office in the devolved nations. It just seems a little bit like that decision was turned down Q66 Jessica Morden: That is specifically about the politically and yet this has been rubber stamped. Is future of the Newport office? that fair to say? Sarah Rapson: To start off with, the fact that we had Damian Green: No. The first thing I should say is overcapacity and that we were actually going to have that, of course, on policy advice given to previous to do something, so two things. Firstly, that, and, Governments, it would be improper for that to be secondly then, how we came to the conclusion that shared with me as the new Minister and so I do not the proposal ought to be the Newport office. It was know. I cannot see what policy advice was given to those two things. The PCS were informally talking previous Governments. I think we would all recognise with us throughout that period. We have always the propriety of that. From the outside therefore, I can worked very well with the trade union. It was imagine that what happened two years ago was that important to us that they had early sight of that. In the then six processing application centres were fact, you know that we have the 23 criteria as part of considered, and the then Minister decided that our analysis. It was the unions’ feedback to reduce it Glasgow was the best one to close. I don’t know what to 20 to take out the staff survey points, and that is rank order the others were in, but I assume—I would what we got through those informal conversations guess—that the previous Government went through with them. That actually did happen. the same objective process that we have gone through and that Glasgow came out as the one that fitted the Q67 Jessica Morden: Obviously, you have bill best. But, as I say, I do not know that. I am not elaborated a bit about the rationale behind the allowed to be told that for perfectly good reasons. decision. It seems to me to be a lot to do with office space, basically, and not a lot to do with location and Q69 Jessica Morden: Is it not true to say that economic impact in a particular area. Do you Glasgow lost some of its work but the office was not appreciate that it is important for people in Wales to closed, but then that work was reinstated? Does that have a major passport office—I know we will come not indicate that there is a history of short-term back later to the services provided by the counter decisions which then end up being reversed? service—and also in terms of a Welsh language Damian Green: Sarah was there and while I am here service? It is extremely important in terms of you cannot reveal what the detail was. Newport, which is a regenerating city dependent on Sarah Rapson: On the point about the actions we took these jobs in the city centre, that we keep this office at Glasgow and then putting work back, just for locally. Do you not feel that, in terms of the idea about completeness, we took out the application process into location, the economic impact study should have the back office and we left the public counter, for the come at the start of the process? I hear that we are same reasons as we are talking about leaving the still waiting for that information to come through. public counter in Newport, because it is important for Damian Green: We are doing the economic impact Scotland also to be able to have a passport office. We study as part of the consultation, which is the proper do, though, from time to time, at peak, use the people time to do that. But, absolutely, I recognise that the that we have there to process postal applications existence of a counter service in Newport is not just because there is capacity to do so at certain times of important because it will preserve those jobs but it is the year. Our demand is very seasonable. The peak important to the local economy as well. Indeed, it is demand at the public counter is in a different time of reasonably well known now that the original thought year to the peak demand on postal, so we share the was that we were always going to keep a counter work between those two peaks. That does mean for service in Wales, and there was a possibility of part of the year we may use the Glasgow staff to looking elsewhere in Wales. After strong process back office work too. representations from the Secretary of State and indeed from the leader of Newport Council as well as from Q70 Chair: Thank you very much indeed for that. you and your colleague, the other MP for Newport, I Lots of people now want to come in. Just very quickly, decided that clearly it was so important for the centre we have been told in earlier evidence that a civil of Newport, the footfall and so on that we preserve servant called Louise Horton suggested to members the counter service there, that that is what we have of staff and to the unions that there would not actually decided to do. I am conscious that will get something be any savings made as a result of this decision. Is like 50,000 people a year coming to Newport that something you could look into for us? specifically for that purpose. It seems to me therefore Sarah Rapson: That there would not be any savings right and proper that we should keep that service in made as a result of the decision? Newport. Chair: Yes. Sarah Rapson: There will be savings made as a result Q68 Jessica Morden: I think we are going to come of this decision. back to the counter service in a later question, so I will come back to that one later on. The other thing I Q71 Chair: Apparently, the lady concerned was 3 See Ev 48 named here, a Louise Horton, who works for the Welsh Affairs Committee: Evidence Ev 11
10 November 2010 Damian Green MP and Sarah Rapson
Identity and Passport Service, and she suggested that Q76 Jonathan Edwards: I think what I am trying to there would not be savings made, or so we were told, get to is who is leading the agenda? Is it the Home to the unions. Office or the IPS? Sarah Rapson: I will take immediate action and try Sarah Rapson: IPS is an executive agency of the to talk to Louise. Home Office. We are also the Home Office. The fact that you are describing us as two separate entities is Q72 Chair: Perhaps you will have a look at the not quite right. The agenda, if you like, comes from transcript of evidence afterwards and write back to us the facts, which are, that we have overcapacity both on that point? in terms of the numbers of people for the amount of Sarah Rapson: Okay, but that is plainly wrong.4 demand that we have to do, plus too much estate. As Damian Green: I am trying to be as transparent as I look at my organisation, and I look to make sure that possible. We have sent you the evidence on which this we deliver the right level of customer service and the is based and you can see what the savings are. right level of integrity around a passport at the lowest cost, I can see that there is something to be done. The Q73 Chair: Could you tell us why therefore— analysis came from me and from my team, but we apparently, again, I can only go by what we have been have spoken with colleagues within the wider Home told today—a document called Direction of Travel, Office and with the Minister to make sure that this is which was published on 16 August, has been the right thing to be doing. withheld? Is that a document the Committee could look at? Q77 Owen Smith: Minister, you have just said that Sarah Rapson: I don’t have it with me. the IPS came to you with these proposals, I presume to close the Newport office, in July. Do you think it reasonable therefore that it was in October that this Q74 Chair: No, but you would be happy for the emerged as a leak from the Home Office to the staff? Committee to look at that document and perhaps to Equally, can you tell us why on earth it was that the send it to us sometime later today because we have Secretary of State for Wales was told about this been told that it is quite an important document and decision, which had apparently been reached by the that the unions were not given full sight of it? IPS—which, as you say, is the Home Office—in July, Sarah Rapson: Okay. We try to be as transparent as only on 5 October? possible. That is our intention. So, then, I guess we Damian Green: I think there are several should show it. misconceptions in that question. What we are doing is Chair: Absolutely. Great. We look forward to that in consulting. Once you launch a consultation, of course the interests of transparency. Excellent. Thank you the proposal is public. The second thing you said was very much. that this was a leak from the Home Office. There is not a shred of evidence for that assertion. Q75 Jonathan Edwards: Good morning. When exactly did the Home Office instruct the IPS to start Q78 Owen Smith: That is what the BBC has stated. working on these proposals, and when did the IPS Damian Green: I have seen no evidence at all that a come to the decision that the Newport office would Home Office official leaked this information. We all be targeted? Wasn’t the simplest thing for you to do know that leak inquiries are pointless so there is no just to dust off that report from two years ago and point going down there. But, as I say, there is no give that to the Minister? evidence for the assertion that the Home Office leaked Damian Green: I have done some of the chronology. this. Indeed, the point made by the hon. Lady earlier It is a continuous process of looking at how efficiently on seemed to me to suggest, what is the truth? Of we can run the whole passport service, and the IPS course, we would have preferred this to happen in an first came to me with the specific proposals, as I say, orderly way so that we could have finished the in July. Again, we are into this point of propriety. I consultation. We could have talked to the Welsh am not allowed to see what policy advice was given Assembly Government. We could have talked to to the previous Government, but we can all know as people more widely than just the Secretary of State a fact that whatever that policy advice was, it led to for Wales. Indeed, the local MPs had asked for a the closure of the Glasgow application processing meeting which was going to happen before the centre and that centre is now closed. The fact is that announcement was meant to be made. As I say, I do there is overcapacity within the system. So the not recognise the preconceptions behind the question. decisions that have to be taken now have to be taken on the basis of the system that is there at the moment. The idea of dusting down an old report would be Q79 Owen Smith: Leaving aside the leak in that completely irrelevant because the situation has case, you do not deny, I presume, because you said it changed. I do not know if there is anything you want a moment ago, that the IPS proposed to you in July to add to that. that these closures take place? I go back to my question: why was it, however it emerged, that it took Sarah Rapson: The information that is populating the until October for that to be made public, albeit model is up-to-date information, so this reflects where through a leak, and you had not informed the we are today. It is not the case that we have just dusted Secretary of State for Wales until 5 October that that off a previous report. This is new analysis to get us to was what was proposed? reflect the situation that we are in today. Damian Green: I think you are misrepresenting what 4 See Ev 48 I said. I said that in July the IPS came to me and said, Ev 12 Welsh Affairs Committee: Evidence
10 November 2010 Damian Green MP and Sarah Rapson
“We’ve got too many staff and too much real estate. by Newport is a reasonable consideration for you in We need to do something about it.” In September, they coming to your final decision on this? came to me and said, having done the analysis, “It Damian Green: That will be part of the economic looks like we should go out to proposals to close the impact assessment. Newport office”, and I assume at that stage you were having informal talks with the unions about that. It Q84 Geraint Davies: So the ball is still in play in obviously takes some time within the Home Office to terms of your review of this decision in those terms, come to the decision to go ahead with a proposal. just so that we are clear on that? When we had reached a settled view on that, I Damian Green: This is a genuine consultation. We correctly informed the Secretary of State for Wales have got the objective evidence so far, which points that these would be the proposals. to Newport as the way to reduce the overcapacity.
Q80 Owen Smith: One more, if I may, because I Q85 Geraint Davies: In terms of the job losses in think the timing of this is important, Minister. The the service directly, those are, how many? Three rationale behind my question is that I think it feels to hundred, is it? lots of people that this is a fait accompli. This was Damian Green: Two hundred and fifty. decided long since and subsequently rationales have been developing in order to justify the decision. We have another leaked document here from the IPS Q86 Geraint Davies: I think you did say earlier that which says that on 31 August 2010 the IPS on the reduction from 250 jobs to leave something Management Board agreed to recommend to Ministers like 45, apart from the extra job losses, there would that Newport would close, which fits loosely with be no impact for Wales on the same-day service, or your chronology. I ask again why on earth it then took language or anything. You are saying to us now today a further month—a month and a half almost—before that that massive job reduction will have no impact the staff were made aware, and they only became at all? aware of it through a leak? Damian Green: The job reduction is in application Damian Green: I don’t know when the board meeting processing in which we have overcapacity. On was, but it is certainly consistent with the fact that a customer service, I am saying there is no effect on submission came up to me in mid-September. This is customers in Wales or indeed the south-west of an important, sensitive decision. It is why we are England who tend to use Newport as well. That having hearings like this. customer service will remain with everything you Owen Smith: Absolutely. would expect in a customer service in Wales, like the Damian Green: These are people’s jobs. I thought capacity to process applications in Welsh as well. That about it hard and that takes some time, and when I will remain. had come to what I thought was the right decision I then communicated that to the Secretary of State Q87 Geraint Davies: My understanding was that the for Wales. This is a perfectly normal part of same-day service was under risk, that people would governmental process. be travelling and that they would not get the four-hour turnaround. If you are going to take 250 jobs out and Q81 Owen Smith: Given how important it is, don’t leave 45 and have precisely the same services, it you feel that you should have conducted the impact seems to me very unlikely, but that is what you are assessment in respect of the economic impact of this saying. No change at all? on Newport—500 jobs, we have been told by the Damian Green: You are confusing the two services. council, are going to be gone—before you made the Sarah, do you want to explain the difference between announcement? them? Damian Green: I am not sure where the 500 jobs Sarah Rapson: In our Newport regional office, we come from. have two things. One is the public counter which services the same-day services and the second is the Q82 Owen Smith: Newport council’s estimate of back office processing, which is the applications that how many jobs would be lost in the wider economy. come in through the post—from anywhere, frankly. Damian Green: Okay, that will clearly be part of the We are not touching the service that we provide from economic impact assessment. The truth is you can the same-day service perspective at all. That will only do an impact assessment by going round asking continue to be delivered by the same number of people, what would be the effect if we did this? We people. The changes that we are making are on the are already spending a huge amount of time back office process, so the postal applications. If you discussing the effects of a leak. Frankly, if you went have just booked your holiday, you are about to go round towns asking those sorts of questions, you and you find your passport is out of date and you would spread fear and uncertainty for months, need an emergency passport, you will be able to go to potentially for no purpose at all. Newport the same day and have a passport issued to you directly. You will also be able to continue to have, Q83 Geraint Davies: My question, Minister, is if we call you in, the interview conducted in Newport whether the decision stacks up in terms of the impact because at the moment we have the two offices there. on the economy, the impact on the service and the There is a misconception actually in the media that impact on the customer. Do you now accept that the Wales will end up without a passport office. We will 500 job losses by an independent report commissioned still offer a same-day service. Welsh Affairs Committee: Evidence Ev 13
10 November 2010 Damian Green MP and Sarah Rapson
Q88 Geraint Davies: There will be no reduction in interview, which remained at one for some years, and the capacity for a same-day service at all? also the number of people who withdrew. I am sure Sarah Rapson: None. that is in the public domain, because I think I have asked parliamentary questions about it. Q89 Geraint Davies: What about the issue of deterrence and detection? We have heard about how Q94 Chair: The union representatives behind you— the interview process currently deployed in Newport you cannot see this—are shaking their heads. Protocol acts in terms of deterrence and detection of fraud and does not allow us to bring them back, but perhaps on there are fears that that will be reduced. Is that true? that basis we would all be very interested to know Sarah Rapson: No. We will continue to interview all what the figures are for the number of people first-time adult applicants, which is what we currently cancelling interviews, if that is all right. do today. What we know is that it is likely that the Damian Green: Off the top of my head—5 Newport office will need to conduct 7,000 interviews Chair: There is no need to do it off the top of your per year and the capacity—the 45 jobs in the head. A written response for the Committee would be combined customer service centre—will continue to excellent. Could I bring in Susan Elan Jones, please? do that level of interviews. There is no change to the group that we interview with and therefore no change Q95 Susan Elan Jones: I would like to ask the to the security of the process. Minister whether he has made a proper assessment of his Department’s obligations under the Welsh Q90 Geraint Davies: The previous people we talked Language Act, as indeed that Department is obliged to deploy the service. There is a view there that, to do under the terms of the 1993 Act. obviously, the service will be reduced. Are you aware Damian Green: Absolutely, and one of the reasons of the sensitivity across Wales that people basically why we are keeping the Newport customer-facing think Wales is being picked on again? The people who office open is so that we retain the capacity that is are living in Wales—it is a sparse population—want already there to deal with applications in Welsh. to be able to get down there, sort out their passports Straightforwardly, that will not change. without the having to go to England to go abroad type of thing. Q96 Susan Elan Jones: How does the Minister then Sarah Rapson: Yes. feel that a Conservative-Lib Dem administration in Newport actually fears that this is not the case and Q91 Geraint Davies: There is enormous sensitivity. they make this point: “The IPS would have needed to They were treated in a discriminatory and second- completely revise the service’s Welsh Language Plan class way in this decision. under the Act as Welsh speaking customers’ interests Damian Green: Absolutely, there is sensitivity and it could be endangered with the rapid downsizing or is based on a misapprehension—the apprehension that closure of the Newport passport office, jeopardising you will not be able to get a passport or be the capacity and the quality of the service they receive interviewed for a passport in Wales, and that is simply in their own language, given also that the other not true. interview offices in Wales are marked for closure”? If we add this to the submission from the Welsh Q92 Chair: Minister, actually can I say at this point, Language Board, which makes the point that there is having had a passport stolen and having to deal with no Welsh language capacity in Liverpool, how does passport offices in Newport and Victoria, Newport the Minister square those two points with what he has were absolutely first-rate and bent over backwards to just said—that he is actually not breaching the terms help. Victoria were a disgrace and a shambles and I of the 1993 Act? won’t even tell you why. Damian Green: It is simply not the case that the Sarah Rapson: I am sorry to hear that. Welsh language service will disappear from Newport. That is a misconception. Q93 Chair: They were absolutely disgraceful. Anyway, the unions made a very interesting point and Q97 Susan Elan Jones: Not disappear, but how does one which I found entirely believable, which is that it actually fulfil the full terms of the Act? the interview process deters people from making Damian Green: It does not change. In fact, the fraudulent passport claims. They have also suggested capacity to be interviewed around Wales will be that people who are about to be interviewed may well enhanced by making the service more mobile. Maybe cancel their interview if they are making a fraudulent you want to talk about that. claim, which, again, I find very credible. But, Sarah Rapson: We currently have seven sites in surprisingly, the number of people who cancel Wales where we offer the interviews through our interviews is not published. Apparently, that video interview service, which is through using the information is not released. Can you tell us why that buildings of local authorities or what have you. There is and perhaps arrange for it to be released? It is will be changes made to Newport, obviously, because something I think we would be very interested in we will consolidate the two—the interview office and the public counter—into our new building. We will seeing. continue to offer services in Swansea, Aberystwyth Damian Green: I do not think that is true. I think I and in Wrexham, and they will become a mobile have asked parliamentary questions in my previous service. We will release the actual buildings, but we role as shadow Immigration Minister—certainly about the number of people who were turned down at 5 See Ev 49 Ev 14 Welsh Affairs Committee: Evidence
10 November 2010 Damian Green MP and Sarah Rapson will have a mobile team in those areas to deliver new work might be quite difficult. Can you tell us interviews. It may well be the case that we will be what plans you have in place to help people who may spending a day in Wrexham and two days somewhere be losing their job to find alternative employment? else in a local town, which would be more convenient Damian Green: I mentioned a bit in my opening for customers. We will be able to provide those statement. Maybe you will want to elaborate on it. It interviews in a place that is actually closer to where is about what we are doing for our own staff. people live and where they want to go. Sarah Rapson: The support that we provide for our Chair: Thank you very much. There is a lot of interest people going forward is really important—really, in this. really important. So we will, over the next period of months, provide training and support in terms of CV Q98 Guto Bebb: I have a follow-up on the issue. writing, in terms of job application completion and Could you confirm this? You have said that the interview practice—some practical support for people. customer service elements of the service in Newport We will also provide a counselling service, so will continue, but the back office processing will emotional support for people who are going through happen somewhere else, I take it? the change. I have some HR professionals who will Damian Green: Yes. work in the local area with other government Sarah Rapson: Yes. departments or local employers to see what opportunities there might be for people to be Q99 Guto Bebb: Obviously, I am a Conservative redeployed into. We will work with the local council Member, and we passed the 1993 Welsh Language also to do that. Act, so I am very proud of that fact. But on that basis, Chair: I do appreciate that, but we are a bit short my understanding is that there are some elements of of time. the passport application process which cannot be done online through the medium of Welsh and therefore Q104 Stuart Andrew: Can I just quickly ask this as there has to be a paper application. If the back office well? In terms of the 45 jobs that are remaining, was work is being done outside Wales, will the Welsh there any lobbying from the Secretary State for Wales language applications have to go outside Wales, and and from the leader of the council to keep those jobs? how will you deal with that from a staff point of view? Damian Green: The Secretary of State for Wales has Sarah Rapson: Where we get applications completed been vociferous in Newport’s defence, as has the in Wales, we will process them in Welsh. If we get leader of the council, as you would expect. As I said, an application form in Welsh, we will process them there was a thought that perhaps the customer-facing at the— office could go elsewhere in Wales, but having heard those representations I have decided no, let’s keep that Q100 Guto Bebb: Some of the paperwork—some of in Newport, because the point was made to me that the back office work—will be undertaken in shops may be closing down. One of the things that the Newport, therefore? passport service can continue to do for Newport is to Sarah Rapson: The applications that we get in Welsh, provide something that means that tens of thousands which is where we will have the Welsh speakers, will of people a year come into the centre of Newport and, be processed in the Newport office. particularly if they are waiting for their passport, will Chair: Jonathan Edwards? eat, drink, shop. whatever. That will continue, as has Jonathan Edwards: That was my exact question. happened in the past. Chair: In that case, Jessica Morden. Q105 Guto Bebb: Just on the service for the rest of Q101 Jessica Morden: In the equality impact Wales, obviously the interview offices are being assessment that I think you shared with the union changed in Wrexham, Aberystwyth and Swansea. yesterday, was not to have a Welsh service at all one What is the current usage of those offices roughly? of the options that you were considering? Sarah Rapson: I can tell you. The level of Sarah Rapson: No. We have a legal requirement, but interviewing in the Newport interview office is 7,000. actually we also believe that in the spirit of that we The next biggest office is Swansea with 3,500. This is ought to be offering Welsh services. There is no interviews per year. Wrexham is 2.9, so 2,900. intention to reduce the level. Aberystwyth is just under 600. Then we have three other video interview sites. Q102 Jessica Morden: It was quoted to us in previous evidence that yesterday, in the equality Q106 Guto Bebb: How will the mobile service impact assessment, one of the options was not to have work? Because obviously as a north Wales member as a Welsh service at all. well I am delighted that 45 jobs are being retained in Sarah Rapson: It is probably just for completeness, Newport, but for a north Wales individual looking for Ms Morden. There is no intention to do that. a passport, it is not a convenient four-hour drive, to Chair: We are grateful for that. say the least. How will the mobile service now work? How do you envisage that working? Q103 Stuart Andrew: We heard an earlier Sarah Rapson: We are going to spend the next few submission from the leader of the council that the loss months working this up in a bit more detail, but the of these jobs will obviously be quite significant in intention is that we would release our own fixed Newport, particularly as Marks & Spencer and Next buildings—all the leases are up, by the way, in are moving out, and actually the prospects of finding September next year anyway—and we would make Welsh Affairs Committee: Evidence Ev 15
10 November 2010 Damian Green MP and Sarah Rapson arrangements with other local authorities or other of them may, but it is not going to be a big proportion Government Departments to rent office space for parts of that. It will be a handful. of the week, and then our people would turn up with the right equipment and the right sort of information Q112 Owen Smith: A final question, if I may, to the to be able to conduct the interview in that space. What Minister. There has obviously been a long tradition, it means is that we do not have the costs of a fixed 40 years really, of jobs being moved from London, office on a full-time basis. We are only paying for the and civil service jobs being effectively located in post- time when we actually need it and we can be in a industrial bits of Britain. In my constituency, there is physical place where people can easily get to. the Mint, which was put there in the ’60s. Do you feel comfortable that you are reversing that long tradition Q107 Chair: There are costings we can see, are with this sort of decision? there, Minister, on this? It doesn’t sound very cheap Damian Green: I am not, because I am not moving to me, with all due respect—the public sector renting jobs anywhere. Unfortunately— a load of offices and turning up for a few days at a time. Q113 Owen Smith: You are getting rid of the people. Damian Green: It is better than the public sector Damian Green: Obviously, desperately unfortunately leasing offices for years that are not very well used. for the people involved, jobs are just going, but there One of the points made to all Departments at the are too many people employed in the passport service. moment is that the Government estate is vast, and a We are under a legal obligation to run the passport lot of it is under-occupied. Part of the reason for this service so that the fees cover the costs, so we cannot is to make it easier, particularly in rural areas. You carry surplus staff and surplus buildings. will know that every second Tuesday the passport office will turn up, or something like that, on the Q114 Owen Smith: I accept that you are not putting mobile library analogy. But, also, it means that we can jobs there, but you are taking jobs away. Did you not get out of expensive long-term leases for chunks of consider continuing that theme and moving jobs from buildings that may not be fully occupied. London to Newport? Damian Green: The exact equivalent of what is Q108 Susan Elan Jones: I want to ask about the happening, what we propose to happen in Newport, implication for security. We have already touched happened in London in 1988. There used to be a back upon the fact that there will be a decision that will office—a processing office—in London as well and actually reduce the number of staff by 80%. Do you that was closed down by the Government in 1988, just accept concerns that the closure of this office will as the Glasgow back office was closed down in 2008. have a detrimental effect on the security of the As the passport service gets more efficient and more British passport? can be done online, all the things that efficient entities Damian Green: Absolutely not. That clearly is one of do, and the passport service is efficient and well run, our main drivers. The passport is a hugely important then over time you actually need fewer of these back and sensitive document and we have to keep security office processing centres. as much as possible. It is a moving target, as Sarah has already said. We will continue to interview every Q115 Guto Bebb: In terms of the financial first-time applicant, and the fraudsters and criminals implications of this decision, obviously, we have been who seek to exploit the passport service don’t stand told that the passport office or the service has to pay still. They know that now, and indeed we will provide its way, but we have also been given evidence which the figures for how many are cancelling interviews. indicates that the service would be paying its way if They will move on to other parts of the passport it was not for the fact that over the past few years service and try to get into it that way. We are something like £57 million was spent on consultancy constantly changing our defences because the fees. I would be interested to know over what period criminals are constantly changing their attack of time that £57 million was spent and what exactly methods. was the consultancy all about? Damian Green: A lot of the consultancy was about Q109 Owen Smith: On the same theme, Minister, the ID card scheme, which is no longer with us, thanks will these peripatetic staff be part of the 35 in to this Government. I know Sarah has the actual Newport? figures for consultancy, which, for those who think Sarah Rapson: No. governments waste money on consultants, are quite cheerful. Q110 Owen Smith: These will be additional jobs? Sarah Rapson: They are not additional jobs because Q116 Chair: We hope there is going to be no more we have people working in Swansea, Aberystwyth of that, but I think we probably haven’t got the time and Wrexham at the moment. to go into all the details. Damian Green: It is a 90% reduction this year. There Q111 Owen Smith: So those people are all going to used to be roughly 100. There are now 11. keep their jobs but be peripatetic? Sarah Rapson: It is unlikely that we will keep all of Q117 Guto Bebb: With the stripping out of the those jobs. What we will do over the next month is consultancy fees, is the service actually paying its way work out what the operating model needs to be. Some at this point in time? Ev 16 Welsh Affairs Committee: Evidence
10 November 2010 Damian Green MP and Sarah Rapson
Sarah Rapson: The service will be cost recovery this be able to get passports, as they always have done, financial year and next financial year, so, yes. The from Newport. This is not the place to rehearse the passport fee covers the operational costs of running macro-economic argument, but there is no money. The the passport operation. public sector in this country is having to shrink. I know the Secretary of State for Wales is working Q118 Jessica Morden: Just two quick questions. Is extremely hard both within Government and outside it 45 or, as now seems to be quoted, the figure of to make sure that the private sector in Wales becomes 35 jobs that you have got in mind for the customer- even more dynamic so that we can have a widely facing office? based, sustainable, economic recovery in Wales, as we Sarah Rapson: We have given a range, which is 30 seek to do for the rest of the United Kingdom. to 45. Q122 Jonathan Edwards: Building on Mr Smith’s Q119 Jessica Morden: So it could be as low as 30? points in terms of savings, would not consolidating Sarah Rapson: It could be as low as 30. in Newport be more cost-effective for the service as, obviously, operational costs will be less? In terms of Q120 Jessica Morden: Would you be willing to overcapacity—this is about reducing capacity in the provide the Committee written evidence of how you service—would it not be better to share the pain can provide counter staff security, interview, fraud, across the nations and regions of the UK rather than processing, printing and a Welsh service within that just targeting Newport solely? range of 30 to 45 jobs? Would you be willing to Damian Green: One of the options—it is in your provide that to us as written evidence? written pack—was that we looked at the prospect of, Damian Green: Certainly, yes.6 if you like, slicing a bit off everywhere, and the costs, Sarah Rapson: Yes. the wasted money on keeping all those buildings, were colossal. Q121 Jessica Morden: Whilst maintaining exactly Sarah Rapson: It is £1.9 million a year. the same service for the people of Wales, which has Damian Green: It is £20 million over 10 years. That obviously been promised today. Secondly, do you option just does not stack up economically. appreciate that, with projects like St Athan, the barrage, and the fact we do not know what is going Q123 Chair: Minister, thank you very much for to happen about electrification of the railways, we are coming along today. We have asked for a little bit of losing a prison and there is a proposed prison in north further evidence from you in written form and we are Wales, Wales needs some positive news from the going to be publishing a report quite soon on this. It Government, given the last couple of months, and that would help us greatly if you were able to get us the saving the passport office in Newport would be one information we have agreed the Home Office should way in order to deliver this? be able to supply. Damian Green: As I said, I always object to the Damian Green: Okay, we will do that. phrase that the passport office in Newport is closing Chair: Thank you very much indeed for coming down, because it isn’t. The people of Wales will still along.
6 See Ev 49 Welsh Affairs Committee: Evidence Ev 17
Written evidence
Written evidence submitted by Capt Bob Wade and Mrs Pauline Wade 1. We protest over the proposed closure of the only passport office in Wales ie Newport. 2. Scotland and Northern Island have their own office and England have four such offices. 3. It would seem that if an office has to be closed it should clearly be one of the English offices. 4. We believe that the London Passport Office is already three weeks behind with their workload. This being the case, how will they manage the extra workload if one of the passport offices closes? 5. We have been informed that the Newport office was chosen for closure because the lease of their premises is about to expire. We do not think that this is a valid reason for Wales to lose their only passport office. 6. We would, therefore, strongly request that the Newport office remains open at full capacity thus serving the population of Wales as it has done in the past. October 2010
Written evidence submitted by Public and Commercial Services Union (PCS) 1. The Public and Commercial Services union (PCS) is the largest civil service trade union, with a total membership of over 300,000 working in over 200 civil service departments, non-departmental public bodies and related areas. PCS is the only recognised union in the Identity & Passport Service (IPS), with almost 3,000 members in the agency. 2. Newport Passport Office is one of seven regional offices dealing with the processing of passport applications within the IPS (the others being located at Belfast, Durham, Glasgow, Liverpool, London and Peterborough). It was opened in 1967 as part of the then government’s plan to disperse government jobs to the regions. It employs around 300 staff. On Friday 8 October 2010, IPS management announced the closure of the office (although on 11 October 2010, the Secretary of State for Wales, Cheryl Gillan, announced that she had secured the retention in Newport of a “public counter service” that would employ “up to 45 staff”; we now understand that this figure would actually be 35 full-time equivalents). This was followed on 14 October 2010 with the announcement that the majority of offices in the Interview Office Network (ION) would also close, with around 150 further job losses. The statutory 90 day consultation period began on 19 October 2010. PCS has launched a broad-based campaign to reverse these decisions and save the threatened offices. 3. PCS welcomes the Select Committee’s timely inquiry. We are happy to supplement this submission with any further written evidence that might be helpful and also welcome the opportunity to provide oral evidence to the committee.
Executive Summary 4. This submission will explain why PCS opposes the proposed closure by the Identity and Passport Service (IPS) of the Newport Passport Office, with the potential loss of some 300 jobs. IPS is also planning to close up to 20 offices in its Interview Office Network (ION). This submission will primarily be concerned with the Newport closure but it should be borne in mind that IPS is embarking on a closure programme in the ION which we believe is based on ill-considered plans for the future and will increase the risk of identity fraud. We will present the PCS position on cuts in the civil service and the public sector more widely; our position on the “rationale” provided by IPS for the closure; the economic impact on Newport and South Wales and we will conclude with our recommendations for the Committee.
The “Rationale” for Cuts 5. PCS believes that the proposed office closures within IPS have to be seen in the context of the wider cuts in public spending being pursued by the present government, which have been described by the Institute of Fiscal Studies as the deepest spending cuts since at least the Second World War. We do not accept that these cuts are necessary or desirable. The Government argues that the UK economy is in debt and that it is necessary to make cuts in the public sector and public spending in order to balance the public finances. PCS rejects this view. 6. First of all, our current debt as a proportion of GDP is lower than Japan, the USA, France and Germany and only half the size of UK debt between 1918 and 1961. During that period the country saw massive public investment including the building of the Welfare State, the NHS, state pensions and a massive expansion of education and public housing; there was consistent economic growth and a strong public sector. It is therefore quite wrong to suggest that, in a period when debt as a proportion of GDP is far lower, the solution must be cuts, rather than investment. Ev 18 Welsh Affairs Committee: Evidence
7. We believe that cuts will exacerbate the UK’s economic problems by reducing spending power, creating a “double-dip” recession. For every pound paid to a public sector worker 74 pence goes back into the economy to cut jobs in the public sector is therefore dangerous. Nowhere is this more evident than in Newport and South Wales, a region already crying out for investment, not cuts, and where around one in three people work for the public sector.1 8. There are practicable alternatives to the present policy. The chartered accountant and tax justice campaigner, Richard Murphy, has demonstrated in research for PCS and the TUC that there is a “tax gap” in the UK of £123 billion, consisting of evaded, avoided and uncollected tax—yet the capacity of HM Revenue & Customs (HMRC) to address this problem has been undermined by the loss of 20,000 jobs within the department since 2005.2 PCS believes that the Government should give HMRC the resources to collect this money, which could be used to pay off a large part of the national debt, rather than cutting jobs and risking a deeper recession. 9. IPS management, which announced the office closures in Newport and in the ION prior to the comprehensive spending review, is simply trying to be “top of the class” in the Government’s eyes by embarking on closures in advance of other government departments.
IPS’ “rationale” for the Newport office closure 10. In their Ministerial Submission to Damian Green, dated 13 September 2010, IPS management seek to justify the proposed closure of the Newport office on the grounds that the agency is “over capacity” in terms of staffing and estates for two reasons: — due to the cancellation of the National Identity Service (NIS) programme—effectively because of the abandonment of ID cards; and — due to “operational improvements”. We will deal with these in turn.
NIS 11. IPS argues in its submission that, due to the cancellation of ID cards, it follows that there are too many staff working for the Agency and that the Agency has excess physical estate. However, nowhere in the submission is it shown how this follows at all. In fact, the Newport Passport Office had very little involvement in the ID cards programme. The office is primarily an application processing site involving the processing of postal applications along with a public counter providing both a fast-track (one week) service and a same-day (four hour) premium service. Newport has always performed this work successfully and we see no reason to argue that the cancellation of the NIS leads to the conclusion that there are too many staff working at IPS and that therefore Newport must close. The remainder of the submission to the Minister makes very little mention of how the cancellation of the NIS leads to the conclusion that IPS is “over capacity” in terms of staffing or estates. 12. Nor does it follow that there should be closures in the ION. The latter wasn’t primarily set up because of ID cards. Its primary purpose was to detect and deter fraud by interviewing first time applicants for passports. Indeed, there were plans at one stage to increase the amount of interviewing taking place within the ION to include lost, stolen and recovered passports along with renewals and extensions.
Excess capacity due to “operational improvements” 13. PCS does not accept IPS’ argument the agency is over-capacity due to “operational improvements”. The basis for this claim, cited in paragraph nine of the IPS submission to the Minister is that: — the regional passport processing operation has already been subject to operational improvements; and — that there are further plans to improve productivity through the use of a replacement passport issuing system and online channel and through streamlining the process. It is argued that these two factors will lead to around 350 staff surplus to requirements by the end of 2011. IPS calculates that after the use of the early release programme this will lead to an excess of about 300 staff. The agency has then used multi-criteria analysis to single out the Newport office for closure. 14. The Committee should, however, note that the “operational improvements” referred to in paragraph nine of the submission actually refers to the IPS’ “Key Performance Indicators” and “Key Performance Objectives”, which are simply targets for offices and for members of staff—in particular, a requirement for each examiner to pass a certain number of passports for issue per day. The agency is supposedly using these targets to drive staff productivity but PCS believes that this is at the expense of the qualitative aspects of the work, with the 1 Statistical Bulletin SB 27/2009: ‘Employment in the Public Sector in Wales’ (29 April 2009), http://wales.gov.uk/docs/statistics/ 2009/090429sb272009en.pdf. Table 3 shows that public sector employment in South Wales ranges from 23.2% of the workforce in Monmouthshire to 37.5% in Swansea. The figure for Newport is 27.5%. 2 Richard Murphy FCA, “Tax Justice and Jobs: The business case for investing in staff at HM Revenue & Customs” (March 2010), www.pcs.org.uk/taxjusticedoc Welsh Affairs Committee: Evidence Ev 19
result that less attention is paid to fraud detection and more to passing as many passports for issue per day. In addition, the institution of a target does not in itself guarantee that that target is met. In reality, examiners do not meet these targets all the time, particularly if they pay proper attention to policy and procedure and fraud detection. We suspect that the IPS is basing its argument that there have been “operational improvements”— and that there is, therefore, “excess capacity”—on the assumption that these targets are being met all the time, yet at no stage in the consultation exercise thus far has IPS demonstrated that staff are consistently meeting their targets or what these operational improvements really amount to. There may, therefore, be far lower staffing capacity within IPS than the organisation claims. 15. We would add that, even if IPS’ claim is that staff are meeting their targets, this suggests they are working at full capacity—which is consistent with PCS’ experience—and are not therefore able to take on even heavier workloads. The removal of the Newport office would therefore be a potentially dangerous step, since in the event of system failure or spikes in demand leading to backlogs, the staff left in the organisation would simply be unable to clear those backlogs if they were already working at full pelt. 16. We turn now to the issue of expected further improvements in productivity. IPS is claiming that operational improvements due in the next year or so will also play a part in creating excess capacity to the tune of 350 staff (full-time equivalents). IPS is assuming here that the introduction of new computer systems and the increased use of an on-line application procedure will produce this extra capacity. The Committee should be aware that, to our knowledge, the new passport processing system is very much a work in progress, indeed in inception and that very few customers currently use the on-line channel. The arrival of the new passport issuing system is already much delayed and IPS’ claims about how many applications will be submitted in future seem hugely exaggerated—we have been told in one meeting that they envisage 98% of applications coming in via the online channel. If the systems are not in place by the end of 2011 to deliver the operational improvements the organisation envisages, IPS will then be under-capacity if it has been reducing staff numbers by closing the Newport office and will have put its service to the customer at risk, in addition to creating hardship for those who will have lost their jobs. 17. Additionally, in relation to “excess capacity”, we would like to draw attention to the fact that IPS has a poor history of fitting capacity to demand. In the run-up to the 1999 passport crisis the agency ran down staffing prior to the introduction of a new computer system, just as it is planning to do now. When that system failed, there were backlogs that could not be dealt with because of the lack of staff left in the agency to do so. Another, more recent example of failure in this respect came in 2008, when IPS discontinued the processing of postal passport applications at its Glasgow office, retaining only counter staff and a small back office to deal with premium and fast track applications. This resulted in the loss of 150 jobs. The argument then, as now, was that the organisation had excess staff in relation to demand. We were told that this change would make the organisation more cost-effective and efficient. In practice, however, demand was such that within a year IPS was forced to restore postal production in Glasgow, utilising the remaining staff. This resulted in disruption for the customer, as the public counter had to be closed to ensure that the postal work was done. In view of this history of failure to fit capacity to demand, we believe IPS’ claims that future productivity gains will result in excess capacity should be treated with extreme scepticism.
Affordability arguments and the passport fee 18. There is confusion around the cost implications of the decision to close the Newport Passport Office, along with the wider restructuring that is envisaged. In paragraph 22 of the ministerial submission, IPS claim that restructuring costs will amount to £14 million and admit that there is “insufficient headroom” in their future plans until 2012 to accommodate the changes they wish to make without a passport fee increase of £2.50. They go on to say that this does not change the “value for money case” for pressing on with restructuring, yet in paragraph 23 they claim that the cost of maintaining current staffing levels and estates would require a £1.50 increase in the passport fee. IPS seem to be saying that the cost of restructuring will amount to a £2.50 increase in the fee and the costs of maintaining current costs will require a £1.50 increase. PCS argues that from these paragraphs a fee increase is inevitable. We would submit that it would be better to have an increase of £1.50 that protects jobs, rather than an increase of £2.50 to fund cuts, impoverishment and economic deprivation in Newport and South Wales. It might be inferred that IPS is basing its plans on a short-term fee increase of £2.50, with a subsequent fee reduction. It seems highly unlikely, however, that the Government will sanction a reduction in the price of the passport, which has risen steadily over the last 10 years. We would encourage the Committee to press IPS management on this issue.
Consultation 19. Finally, under this heading of IPS’ “rationale” for the closure of Newport we would like to register our discontent at IPS’ failure properly to consult with PCS. We have had a number of meetings with IPS management but we believe that the employer has been evasive and is not willing to consult properly with the union. Documents have been provided to PCS in a piecemeal fashion, with the result that at each meeting we have had to request further information. Documents have also been provided late, sometimes on the very day of consultation meetings. Equality Impact Assessments have not been produced, nor have Health and Safety Assessments. Ev 20 Welsh Affairs Committee: Evidence
20. We believe that this is simply unacceptable. PCS also suspects that the true reason for the lack of information and the piecemeal approach being taken are due to the underdeveloped nature of IPS’ plans. As we have indicated above, the proposals depend in part on future operational improvements to be gained from the introduction of new technology, much of the information in the submission about the savings to be made from the Newport closure are pure guesswork, in the absence of any certainty about the robustness of future operating systems. 21. We believe that IPS’ primary motivation is to cut costs as fast as possible in line with the Government’s cuts agenda. This is a knee jerk response, made without regard to the staff affected or to the service IPS provides to the customer. 22. The announcement of “up to 45” jobs remaining in a retained customer service centre (actually 35 full- time equivalent posts, we are now told) was only made under pressure from members of staff, the general public and from politicians and community leaders in Wales. Prior to the announcement of this retained service IPS had no plans to have any service in Newport. PCS were not informed of plans to do this and the Chief Executive at a meeting with staff on 11 October 2010 only committed to retaining a passport office “somewhere in Wales”. We invite the Committee to consider how much credence can be given to an organisation that makes up plans in this way and how much trust can be invested in its promise to retain a service in Newport given that it can change its plans at such short notice.
The Effect on Newport and South Wales 23. We turn now to the effect the closure of the Newport office will have on the city of Newport and the wider South Wales area. We will discuss this under three headings: staff, service and the economy.
Staff 24. The impact on staff in Newport will be enormous and hugely detrimental. IPS Newport staff, like their colleagues elsewhere in the agency, provide a first-class service to the customer. IPS was placed first in the July 2010 UK Customer Satisfaction Index in the “Public Services (National)” category. The Newport office was also short-listed in the Wales Awards for Excellence People Development Award. IPS was noted for nurturing that talent and skills of its employees and their positive contribution to the local community. Newport has also been a path-breaking office, used by the agency to trial various new systems and working practices, such as Examiner Quality Assurance (intended to deliver more productive and high-quality working methods) and the Customer Service Network, which has involved improvements to the way that customer enquiries are dealt with. It seems particularly unfair that staff’s reward for these past efforts is the closure of their office. 25. The combined “alternative public caller facility” and “customer service centre” that IPS are committed to maintain in Newport would provide only 35 full-time posts, hence around 265 jobs would still be lost. In paragraph 13 of the ministerial submission, IPS say they will aim to redeploy staff to other Government departments but we believe that this will be virtually impossible in the current environment, with all departments expected to make budget cuts of 20% or higher following the Comprehensive Spending Review. Virtually all other public sector workplaces in South Wales will also be facing “downsizing”—if not outright closure—and the prospects for redeployment or alternative employment in the area are slim indeed. The result will be impoverishment for members of staff who lose their jobs. IPS management—and, by extension, the Government—are showing scant regard for the well-being of their own employees.
Service 26. The closure of the Newport office will have a detrimental impact on the service IPS provides to the customer—in Wales, in particular. We have highlighted above the risk we believe the Agency is taking with the service through the closure of Newport by gambling on future operational improvements and on the ability of staff to pick up excess demand. There will however be further impacts and risks. 27. The Newport office deals with around 47,000 passport applications annually—around 10% of the national total. It principally serves South Wales and the South West of England and people from these areas will receive a vastly reduced service as a result of IPS’ plans. It is unclear at this stage whether this new public caller facility and customer service centre will provide a same-day service for the public and we urge the Committee to press IPS on this issue. It seems unlikely, however, that an office containing only 35 people would be able to deal with the volumes of same-day applications currently dealt with by the Newport office, which has a counter, a back office to process applications, as well as an Examiner Quality Assurance team and a Fraud Investigation Unit and a printing facility to print passports. We still believe therefore that there will be a deterioration of service to the people of South Wales and the South West, who will have to travel much further to receive the service. This problem will be exacerbated by the closure of many of the remaining ION offices in the rest of Wales. It seems likely that customers will have to travel as far as Liverpool or London to get an appointment for same day or fast track service. Many parts of South Wales and the South West suffer from economic hardship and have people on low incomes. They will incur extra travel costs in order to procure a passport as a result of the closure of Newport. Welsh Affairs Committee: Evidence Ev 21
Economic Impact 28. The economic impact of closing the Newport office will be huge. As we have already indicated, around one in three people in South Wales works for the public sector and 74 pence in every pound given to one of those workers goes back into the economy of South Wales. The Newport office is a centre of the Newport community, employing 300 staff who buy consumer goods and use services provided by local businesses during the working day, thus supporting the local economy and community. Customers who visit the office also use the local shops and other facilities when they visit the office, wait for appointments and so forth. 29. PCS has met with officials from Newport City Council, as well as with the Leader and Deputy Leader, all of whom are gravely concerned about the closure of the office and the effect it will have on the local economy. Newport, and South Wales more widely, badly needs investment in jobs and services. The Welsh private sector has been particularly hard hit by the recession, with thousands of jobs lost in manufacturing, including further downsizing by Corus—once (as British Steel) the biggest employer in Newport. Within the city centre, major businesses like Marks & Spencer, Monsoon and Next have recently announced plans to relocate elsewhere in the near future. The closure of this office will further depress the economy with all the social and economic costs that that will incur. We believe that this is one of the most pressing reasons for reversing the decision to close the Newport Passport Office.
Other Impacts 30. IPS has agreed to undertake an Equality Impact Assessment but has stated its view that there will be no other significant impact assessments required at this time. PCS, however, believes that the decision to close the Newport office will have an adverse and disproportionate impact on women and those with disabilities.3 Moreover, it is the union’s view that IPS has been neglectful in failing to consider the environmental and other associated impacts of the office’s closure—not least the implications for carbon emissions of the longer journey- times undertaken by IPS’ customers and by Newport-based staff who may be made redundant.
Conclusion and Recommendations 31. PCS believes that the proposal to close the Newport Passport Office has no credible rationale. We do not accept the Government’s arguments for its public spending cuts, nor do we accept IPS’ case for the closure of the Newport office. The latter is based on claims that the agency is over capacity which are, at best, based on dubious predictions about the future shape of the organisation. The closure would have a destructive impact on the lives of staff, on the service IPS provides and on the economy and community of Newport and South Wales. 32. We recommend that the Committee concludes that IPS should reverse its decision and engage in meaningful discussions with PCS with a view to retaining the Newport office and planning a future for IPS in which the organisation continues to provide a fully funded public service to the customer across the UK that will secure the jobs of staff at IPS and protect the award-winning service that they provide. November 2010
Written evidence submitted by the Home Office Thank you for your invitation to appear before the Committee and for agreeing to a suitable date for the oral evidence session. Your co-operation is greatly appreciated. As you indicate in your letter of 26 October, this is an important matter for people in Newport and Wales. It is also an important issue for the Identity and Passport Service who take great pride in the contribution made by their staff across the UK to the high level of public confidence in the passport and civil registration services. Therefore, the decision to propose closure of the passport application process centre at Newport has not been taken lightly. IPS has identified the centre at Newport for a number of reasons. The cost of closing the centre (£6.6 million) is less than any other of our sites and the 10-year Net Present Value (NPV) of the savings versus the costs is greatest (£49.3 million). Closure of the Newport processing centre would enable IPS to reduce staff by only as many as we need to and the other sites are either too small or too large meaning we would need to either close part of another office or recruit in a different location respectively. The working conditions of the existing Newport office are in relatively poor quality compared to every other passport application process centre and the site layout is poor. The lease on the building expires in 2013. Other leases on other buildings are longer or do not give us the combinations of space and would not achieve the staff reductions required. I have attached a memorandum of written evidence ahead of the oral evidence session to help inform the Committee. As this indicates, IPS has had to take tough operational decisions before, namely to remove postal work from the Glasgow APC in 2008 and the closure of 10 interview offices in the last 12 months. IPS are required to operate within the strict remit of the passport fee and to provide an economic service for all customers in the UK. 3 74% of staff working in the Newport regional office are women and 13% of staff have declared a disability. Ev 22 Welsh Affairs Committee: Evidence
I hope that Committee members will find the memorandum helpful and that your Secretariat will come back to me with any specific questions on behalf of the Committee. This would be particularly helpful in order to ensure that we can have an informed session dealing with this sensitive issue. Damian Green MP Minister of State for Immigration
1. About IPS 1.1 The Identity and Passport Service (IPS) has been an executive agency of the Home Office since April 2006. It is responsible for the issuing of UK passports and for the registration of births, marriages and deaths in England and Wales. IPS took responsibility on 1 April 2008 for the work of the General Register Office (GRO) for England and Wales from the Office of National Statistics (ONS) and the Chief Executive was appointed Registrar General for England and Wales.
Principal Activities 1.2 The functions of IPS at the beginning of 2009Ð10 were to: — provide passport services for British nationals in the United Kingdom, — begin providing identity cards for UK citizens, and — continue to put in place the framework for the wider National Identity Service (NIS) and to provide the civil registration services of GRO. 1.3 On 20 May 2010, the Coalition Government set out in the Coalition Agreement their commitment to scrap Identity Cards, the National Identity Register and to halt the next generation of biometric passports. The Identity Documents Bill was Introduced to Parliament on 26 June 2010 and is currently at Committee stage in the Lords having completed its passage through the Commons.
Funding 1.4 IPS activities are funded in a number of ways: — passport services are funded by passport fees, — identity cards are/were part funded by identity card fees with any shortfall funded by central Home Office funds, — development of the NIS was funded by central Home Office funds, and — GRO activities are funded by a combination of fees for certificates and other civil registration services and central funds for the statutory responsibilities of the Registrar General for which a fee is not chargeable. 1.5 The passport fee covers the cost of the domestic passport service and consular services overseas for British citizens. Passports have to be delivered within the fee structure and be available to the public at an economic rate.
Volumes — Based on historical trends, IPS forecasts that it will issue 5.4 million passports and 1.9 million certified copies of birth, death and marriage certificates this financial year. — Approximately 80% of UK citizens hold a valid passport. — Over the past 15 years annual passport application volumes have fluctuated between 3.9 million and 6.5 million. — Application volumes are currently dominated by adult passport renewals. — An additional 250Ð400,000 passports applications are expected annually from April 2011 when responsibility for applications from British citizens overseas will transfer from FCO to IPS. — IPS employs 3,913.85 Full-Time Equivalents (FTEs). — There are seven passport regional offices (Glasgow and London only provide counter services), 56 interview offices. — Civil registration is carried out in conjunction with local authorities and central records are held at the General Register Office in Southport. — The cost of a standard adult passport is £77.50, a child passport is £49.00 and a certificate is £9.00. Agreed turnaround time for all documents is up to 10 working days.
2. Passport Operations Restructure 2.1 IPS provides a UK wide operation dealing with on average 5.5 million applications each year. It has a network of offices based at regional and local level. The regional offices are located at Belfast, Durham, Glasgow, Liverpool, London, Newport and Peterborough and there are 56 local interview offices throughout Welsh Affairs Committee: Evidence Ev 23
the country. The latter are known as the Interview Office Network (ION) and were set up in 2007 to provide a network of offices to interview all first-time applicants for passports.
2.2 IPS is a public service organisation that achieves high levels of public confidence both on the passport operation and on civil registration. The agency must operate within the income derived from its fee structure and the income must be used solely on the effective delivery of passport services.
2.3 That is why IPS keeps its business operation under review against the key aims of delivering a secure, high quality service at an economic cost to the customer and the UK economy. For example: — In 2008, the passport application processing centre in Glasgow was closed with the loss of 124 posts. The processing work was re-distributed to the other centres at Durham, Liverpool, Newport and Peterborough. — In 2009, IPS closed 10 interview offices to reduce their future cost base whilst not materially impacting on the quality of service to customers.
2.4 The current programme of restructuring is more fundamental. IPS currently has excess capacity in our application processing and interview office networks. Ongoing and planned improvements in productivity and efficiency mean that, by 2012, we will have: — Excess staff capacity of around 350 full time equivalents and excess physical capacity of approximately 25% across our application processing estate. — Excess staff capacity of around 150 full time equivalents and 39 local offices across our Interview Office Network.
2.5 IPS therefore needs to reduce both our headcount and estate. The only way to make an appreciable saving in the amount of physical estate occupied by IPS passport operations, as well as to reduce overall staffing, is to close a passport Application Processing Centre and significantly reduce the number of interview offices.
2.6 IPS has looked at all five existing passport Application Processing Centres: Durham, Newport, Peterborough, Belfast and Liverpool. We have applied the same criteria to all centres and the evidence strongly indicates that the closure of Newport would achieve the required level of cuts and not harm the current and future running of the business. A detailed assessment of the criteria is set out at Annex A.
2.7 IPS has also looked at its local office network. We have concluded that the best way to provide continuing high-quality services is to create a Customer Service Network that brings together passport counter services and interviews through a mixture of IPS-leased offices, the Video Interview Service and new mobile interviewing teams. This will result in the closure of 39 local offices.
2.8 These are not decisions we have taken lightly. We have spent many months looking at different options. We believe these proposals offers the most appropriate solution for the organisation and will deliver improved value for money to the taxpayer, at a time when all government departments are under pressure to deliver more for less.
2.9 On the application processing, a set of 23 criteria were used to establish objectively which Application Processing Centre provided the best option for closure. The results show that Newport provides the lowest cost of closure and the most favourable Net Present Value (NPV), ie the future investment available resulting from closure of the office. By closing Newport, IPS is also able to retain sufficient operational capacity, following closure, without needing to recruit staff to backfill into other offices. The Newport option also provides the opportunity to withdraw from premises that are generally considered as poor quality. The current lease expires in 2013, meaning that IPS can release 19% of its processing estate and minimise fruitless rent payments.
2.10 IPS considered retaining all five Application Processing Centres and reducing the capacity in each. This proved to be too costly and inefficient—to remove the required level of excess capacity and achieve maximum benefit necessitates closing an office.
2.11 The increasing efficiency across the passport processing and customer service networks means the length of time it takes for customers throughout the UK to get their passports will not be affected.
2.12 We very much recognise the importance that the Welsh Affairs Committee has given this important issue and acknowledge the efforts made by the Members for Newport West and East. As indicated during Ministerial meetings with them, in meetings with others and during the Adjournment Debate on 25 October, IPS are proposing the closure of a passport application processing centre. The decision is about the “back office” work to produce passports. That work is not allocated just to the areas in which the office is located. For example, the catchment area for the Newport passport application processing centre is the whole of Wales, Devon and Cornwall, Avon and Somerset, Dorset and Gloucestershire. A Customer Service Centre will be situated in Wales to provide the people of Wales and the South West with a counter service in addition to existing counter services available at Liverpool. The Minister (Damian Green) has determined that this will be located in Newport. Ev 24 Welsh Affairs Committee: Evidence
2.13 As the content of the next section indicates, closure of the Newport centre is justifiable on the cost of grounds, on sustaining future business operability and, importantly, on maintaining a secure, high quality service to the public by continuing to provide passport services at an economic cost to the customer.
3. Analyses used to Determine Restructuring Programme 3.1 IPS has undertaken detailed analysis, using the Multi Criteria Analysis (MCA) method, to establish objectively which office provided the best option for closure. The criteria we have used fall into groups of Cost, Affordability, Estates, People, Customers & Partners, Performance and Operational Feasibility. Consideration was given to the respective weightings of the criteria but these were ultimately given equal weights, as they had no discernible impact on the outcome of the analysis. The criteria and data relevant to each were built into a model, which was run to determine which closure option would be the most sensible. 3.4 The full data pack is attached at Annex A. The pack provides a detailed description, worked example of the Multi-Criteria Analysis tool used, and includes all the input data used to analyse the various options and further comparative data on the Application Processing Network. Much of this information will be included in the Impact Assessment that will be published at the end of the consultation.
4. Next Steps and Future IPS Presence in Wales 4.1 The formal consultation with the trade unions ends in mid-January 2011. IPS will consider the findings of the consultation alongside any representations made directly to the agency or to the Home Office. IPS will produce its response to the consultation together with a full formal Impact Assessment in accordance with guidance issued by the Department for Business, Innovation and Skills. 4.2 IPS does have to operate within the parameter of the passport fee paying for delivery of a high quality, secure and nationally and internationally respected travel document. IPS cannot use the passport fee to pay for surplus staff, an excess of physical estate or for failing to implement better working methods. Therefore, comments are particularly welcome on the economic and delivery aspects of the proposals and the need for IPS to provide a service across the UK. 4.3 We recognise that wider issues have been raised about the impact on the local economy and claims that people in Wales will no longer have access to a passport service. IPS are proposing closure of the passport application processing centre at Newport—but will retain a Customer Service Centre in Newport to service South Wales and the South West. This will employ up to 45 people to provide a counter service and the ability to deal with applicants in the Welsh language. The Customer Service Centre will cater for the 47,000 people a year who use the current Newport regional office and provide capacity for 7,000 interviews. So the number of people who come to Newport to use IPS services at present will not change as a direct result of the closure of the passport application processing centre. 4.4 The loss of jobs is very much regretted. IPS is committed to ensuring that staff who are declared surplus under restructuring plans are considered for any internal vacancy or redeployment opportunity across the Civil Service before considering compulsory redundancy. Support is in place to enable our staff to enhance existing skills and to enable them to apply for suitable vacancies outside of the Civil Service. 4.5 The formal consultation is about how best we can achieve the most favourable outcome for operational delivery of passports in the United Kingdom and managing the consequences for IPS staff currently employed in the passport application processing centre at Newport.
Annex A FULL DATA PACK FOR NEWPORT OFFICE CLOSURE 1. Background 1.1 On 31 August 2010, the IPS Management Board agreed that a recommendation would be made to Ministers proposing the closure of the Newport regional office. 1.2 This is a considered response, based on detailed analysis, to the issue of overcapacity in the network, both in staffing and in physical capacity terms. 1.3 In resource terms, the cancellation of the National Identity Scheme (NIS) has reduced the activities and functions of the IPS passport operation, resulting in some staff overcapacity. Additionally, in our regional passport processing operation we have been able to demonstrate increasing productivity over a number of years and have further plans, through investment in our replacement system and online channel and though streamlining our processes, to improve productivity further. This will lead to increased levels of excess capacity by the end of 2011 of around 350 staff (Full Time Equivalents). The recent Voluntary Early Release (VER) exercise has addressed some of this excess capacity but still leave us with approximately 250 FTE excess staff by 2012 in the passport processing part of the business. 1.4 In terms of physical estate, IPS previously estimated that by 2012 it would have ~25% over-capacity in its estate. IPS has further reviewed its position and now estimates that it has 26,537 (m2) floor space and a Welsh Affairs Committee: Evidence Ev 25
requirement for 20,144 (m2), equivalent to 24.1% overcapacity. The refinement of these numbers makes no material difference to any of the analysis. 1.5 IPS has followed Treasury Green Book guidance in completing its analysis and selected the Multi Criteria Analysis tool to develop an objective recommendation for Ministers.
2. Objective 2.1 The objective of this analysis was to determine the best option to remove excess capacity from passport operations at least cost, in order to maximise efficiency and value for money in IPS.
3. Multi Criteria Analysis Methodology 3.1 IPS has undertaken detailed analysis, using the Multi Criteria Analysis (MCA) method, to establish objectively which office provided the best option for closure. The broad outline of the Multi Criteria Analysis as described in the Treasury Green book is as follows: (A) Identify policy options for analysis. (B) Identify criteria against which options will be assessed. (C) Assess options against criteria using quantitative or qualitative data. (D) Score options against criteria on a consistent basis. (E) Weight criteria and compare options. (F) Carry out sensitivity analysis & revisit conclusions. 3.2 The criteria we have used fall into groups of Cost, Affordability, Estates, People, Customers & Partners, Performance and Operational Feasibility. These were agreed with relevant stakeholders in Passport Operations, Finance and Strategy. Consideration was given to the respective weightings of the criteria but these were ultimately given equal weights, as varying the weightings made no discernible impact on the outcome of the analysis. 3.3 The criteria and data relevant to each were built into a model, which was run to determine which closure option would be the most sensible.
1.1 How this works in practice Mechanics of the Model 3.4 Once the criteria had been agreed, raw data were gathered from across the organisation to input into the MCA model. The input data were then processed and indexed, meaning that a relative weighting—scoring 100 for the most positive response to IPS and decreasing proportionately—was determined for each data set. Indexed values were then allocated a score based on the weights given to each of the criterion. An output score was then produced by summing the output values.
Worked Example—Write Offs (Reduced or Zero Value of Assets) 3.5 Data were gathered from IPS’s accounting system on the amount IPS would need to Write Off by closing each office. The raw data for Write Offs is as follows: Close Close Close Close Scenario Close Belfast Durham Liverpool Newport P’borough
Write offs £4,302k £626k £4,346k £1,253k £928k
3.6 Once Indexed each office is awarded a relative value as follows (low Write Offs are preferable so Durham is given the maximum indexed score): Close Close Close Close Scenario Close Belfast Durham Liverpool Newport P’borough
Write offs 15 100 14 50 67
3.7 Write Offs contribute 6% of the total score which provides the following relative weighted score to each office: Close Close Close Close Scenario Close Belfast Durham Liverpool Newport P’borough
Write offs 16134
3.8 This score is then added to the total as presented in the table in section 7. 3.9 Details of the exact scenarios, data and weighting are provided below. Ev 26 Welsh Affairs Committee: Evidence
4. Options for Analysis 4.1 IPS developed a number of options for delivering its objective and these were built into the model for analysis. Descriptions of the options are given below. 4.2 The option to remove excess staff capacity across all five Application Processing Centres rather than closing a single centre was discounted at an earlier stage of the analysis. IPS currently pays £7,853k in estates costs per year4 on its five application processing centres. An excess estates capacity of 24.1% means that, should we retain all five APCs, £1,893k of fruitless payments will be made on estates costs per year due to over capacity. Across a 10 year period this is equivalent to approximately £19 million. Sir Phillip Green’s Efficiency Review5 (pages 25Ð30) raises the fact that property is not managed as a commercial estate across government and highlights the issue of chronic over capacity. Cabinet Office has established a moratorium for all lease breaks and entering into leases across government.
Option: Close Belfast RO, end 2010 Belfast would cease application processing immediately before the move from Hampton House. The existing Counter and local printing would move into Law Society House (LSH), along with all the Interview Offices in Northern Ireland. The upper floors in LSH would be blocked off from the counter and mezzanine area and sub-let to recover as much of our rent costs as possible, although this could be difficult short-term.
Option: Close Durham RO, March 2012 The entire Durham regional office would close after the 2011 peak, handing over the estate by the lease break in October 2012. We would need to investigate retaining the Newcastle Interview Office as a replacement counter for Premium and Fast Track customers. The counter would operate until the end of August 2011 and postal applications would be accepted for processing until the end of July 2011, subject to sufficient staff remaining.
Option: Close Liverpool RO, by March 2012 The entire Liverpool regional office would close by the end of FY 2011Ð12. The counter would remain operational until the end of August 2011 and postal processing until at least June 2011, although longer might be desirable to give contingency for rollout of the replacement passport issuing system. We would need to investigate providing alternative premises or redirecting customers, as a replacement counter for Premium and Fast Track customers. The servers currently located in Liverpool RO are planned to be moved to a data centre by the end of FY11Ð12 anyway, so there would be no additional cost should the Liverpool RO close.
Option: Close Newport RO, by March 2012 The entire Newport regional office would close by the end of FY 2011Ð12. We would need to investigate retaining the Newport Interview Office, providing alternative premises or redirecting customers, as a replacement counter for Premium and Fast Track customers. Application processing could cease at any time after May 2011 but we might wish to continue past this point to keep contingency for the rollout of our replacement passport issuing system.
Option: Close Peterborough RO, by March 2012 The entire Peterborough regional office would close by the end of FY 2011Ð12. The counter would remain operational until the end of August 2011 and postal processing until at least July 2011. We would need to investigate providing alternative premises or redirecting customers, as a replacement counter for Premium and Fast Track customers.
5. Criteria 5.1 The criteria detailed below were agreed with operational leaders and were reviewed by PCS representatives during pre-consultation meetings. The data used in the model are detailed in section 6.1. 5.2 As previously stated, consideration was given to the respective weightings of the criteria but these were ultimately given equal weights, as weighting had no discernible impact on the outcome of the analysis. criteria internal % Benefit in Criteria & Weightings weight weight category overall benefit
Cost 100 17% Net Present Value (NPV) 100 33% 6% Write offs 100 33% 6% Payback 100 33% 6% 4 Estates costs includes: building rent, services charges, rates, facilities management, fuel and utilities and maintenance. Figures represent spend in the FY2009/10. 5 The Key Findings and Recommendations of Sir Philip Green’s review can be found on the Cabinet Office website. Welsh Affairs Committee: Evidence Ev 27
criteria internal % Benefit in Criteria & Weightings weight weight category overall benefit
Affordability 100 17% Cost Profile 100 100% 17% Estates 100 17% Workstation maximum potential capacity (FTE) 100 50% 8% Empty Space 100 50% 8% People 100 17% Business Functions (HQ & Operations) 100 10% 2% Regional Specialty 100 10% 2% Backfill Recruitment 100 10% 2% Staff Survey Engagement Index (%)* 100 10% 2% Staff Survey Plan for the future (%)* 100 10% 2% Staff Survey Managing Change (%)* 100 10% 2% Attrition (%) 100 10% 2% Attendance (% Average Sick per month) 100 10% 2% VER 100 10% 2% Security Audit 100 10% 2% Customer & Partner 100 17% Customer Complaint % 100 100% 17% Performance 100 17% Weighted Average Transaction Time 100 17% 3% Productivity Efficiency Rate 100 17% 3% Efficiency Distribution 100 17% 3% Quality Standard 100 17% 3% Fraud Detection (%) 100 17% 3% Key Performance Indicator 100 17% 3% 100% *The criteria that are marked with an asterix were discounted during sensitivity analysis following discussions with PCS and make no difference to the outcome. Ev 28 Welsh Affairs Committee: Evidence
6. Data Inputs 6.1. The data used in analysing the options are detailed below. These data represent the position at 13 September 2010. Information was drawn from empirical data sources and has been verified by the IPS Management Information Team, Network Operations Team, Finance and Performance Team and Regional Managers.
Input Data for APC Scenarios Close Close Close Close Close Scenario Belfast Durham Liverpool Newport Peterborough Net Present Value (NPV) (£k) 10yrs £26,042 £32,820 £48,703 £49,259 £41,497 Write offs (£k) £4,302 £626 £4,346 £1,253 £928 Payback (months from 1 April 2011) 18 37 23 23 29 Staff & Estates CSR Cost Profile (£k) £528,574 £513,976 £510,891 £513,811 £515,469 Workstation max capacity (FTE) 273 985 677 532 731 Room for Additional Staff (FTE) 116 356 314 219 267 HQ Functions (FTE) 14 66 69 26 38 Regional Specialty (FTE) 0 14 2 20 67 Backfill Requirement (FTE) 0 311 73 0 182 Staff Survey Engagement Index (%)* 60% 53% 50% 53% 53% Staff Survey Plan for the future (%)* 75% 64% 66% 66% 69% Staff Survey Managing Change (%)* 51% 31% 26% 36% 32% Attrition (%) 6% 1% 2% 5% 3% Average Sick Absence (days/FTE) 8.5 9.1 12.1 10.1 11.6 VER (number applied) 18 54 33 25 52 Security Audit (no. issues) 20 14 16 8 8 Customer Complaint (per 100k intake) 99 87 93 108 87 Weighted Average Transaction Time (sec) 298 279 238 280 260 Productivity Efficiency Rate (%) 113.5 117.9 122.8 110.2 119.5 Output per Production FTE (apps) 1710 1305 1727 1610 1635 Quality Standard (% checked no errors) 91% 92% 94% 89% 92% Fraud Detection (frauds per 100k intake) 106 159 128 113 117 Key Performance Indicators Passed (monthly) 91% 88% 77% 83% 75%
*The criteria that are marked with an asterix were discounted during sensitivity analysis following discussions with PCS and make no difference to the outcome. Note: NPV is defined as the difference between the present value of a stream of benefits and that of a stream of costs. A positive NPV occurs when the sum of the discounted benefits exceeds the sum of the discounted costs.
Financial Calculations per APC
BELFAST 12345678910 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL Baseline Costs £5,415 £4,966 £5,445 £5,445 £5,445 £5,445 £5,445 £5,445 £5,445 £5,445 £5,445
Setup Costs Relocation £28 £28 Severance/Recruitment Backfill (See Note1) £2,037 £2,037 Dilapidations/ Decommissioning ITC Project Management £110 £110 £220 Additional rental buyout at Oct 2011 £5,115 £5,115
TOTAL SETUP £110 £7,290 £7,400
Annual running costs Staff £3,587 £3,587 £392 £392 £392 £392 £392 £392 £392 £392 £392 £10,701 Estates £940 £940 £53 £53 £53 £53 £53 £53 £53 £53 £53 £2,358 other costs £158 £158 £16 £16 £16 £16 £16 £16 £16 £16 £16 £457
TOTAL RUNNING COSTS £4,685 £4,685 £461 £461 £461 £461 £461 £461 £461 £461 £461 £13,516
Total costs (more)/ less than baseline £621 -£7,008 £4,984 £4,984 £4,984 £4,984 £4,984 £4,984 £4,984 £4,984 £4,984 £38,472 Cumul total costs (more)/ less than baseline £621 -£6,388 -£1,403 £3,581 £8,566 £13,550 £18,534 £23,519 £28,503 £33,488 £38,472
NPV (Discount Rate 3.5%) £26,042 PAYBACK MONTHS 18 Welsh Affairs Committee: Evidence Ev 29
DURHAM 1 2 3 4 5 6 7 8 9 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL Baseline Costs £15,436 £14,889 £14,614 £14,364 £13,604 £13,604 £13,604 £13,604 £13,604 £13,604 £13,604
Setup Costs Relocation £132 -£250 -£500 -£618 Severance/Recruitment Backfill (See Note1) £9,260 £9,260 Dilapidations/ Decommissioning ITC £400 £400 Project Management £165 £165 £330 Additional rental buyout at Oct 2011 £675 £675
TOTAL SETUP £297 £10,100 £150 -£500 £10,047
Annual running costs Staff £13,666 £8,190 £8,370 £8,370 £8,370 £8,370 £8,370 £8,370 £8,370 £8,370 £8,370 £97,189 Estates £1,556 £778 £199 £199 £199 £199 £199 £199 £199 £199 £199 £4,123 other costs £214 £107 £74 £74 £74 £74 £74 £74 £74 £74 £74 £986
TOTAL RUNNING COSTS £15,436 £9,075 £8,643 £8,643 £8,643 £8,643 £8,643 £8,643 £8,643 £8,643 £8,643 £102,299 total costs (more)/ less than baseline -£297 -£4,286 £5,821 £6,221 £4,961 £4,961 £4,961 £4,961 £4,961 £4,961 £4,961 £42,189 Cumul total costs (more)/ less than baseline -£297 -£4,583 £1,238 £7,459 £12,421 £17,382 £22,344 £27,305 £32,266 £37,228 £42,189
NPV (Discount Rate 3.5%) £32,820 PAYBACK MONTHS 37
LIVERPOOL 1 2 3 4 5 6 7 8 9 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL Baseline Costs £12,211 £12,518 £12,205 £12,205 £12,205 £12,211 £12,206 £12,207 £12,207 £12,208 £12,707
Setup Costs Relocation £138 £138 Severance/Recruitment Backfill (See Note1) £5,404 £5,404 Dilapidations/ Decommissioning ITC £400 £400 Project Management £110 £110 £220 Additional rental buyout at Oct 2011 £3,408 £3,408
TOTAL SETUP £110 £9,460 £9,570
Annual running costs Staff £9,485 £9,485 £3,807 £3,807 £3,807 £3,807 £3,807 £3,807 £3,807 £3,807 £3,807 £53,231 Estates £2,551 £2,551 £312 £312 £312 £312 £312 £312 £312 £312 £312 £7,910 other costs £166 £166 £77 £77 £77 £77 £77 £77 £77 £77 £77 £1,028
TOTAL RUNNING COSTS £12,201 £12,201 £4,196 £4,196 £4,196 £4,196 £4,196 £4,196 £4,196 £4,196 £4,196 £62,168 total costs (more)/ less than baseline -£101 -£9,144 £8,008 £8,008 £8,008 £8,015 £8,010 £8,010 £8,011 £8,012 £8,511 £63,349 Cumul total costs (more)/ less than baseline -£101 -£9,245 -£1,236 £6,772 £14,780 £22,795 £30,805 £38,816 £46,826 £54,838 £63,349
NPV (Discount Rate 3.5%) £48,597 PAYBACK MONTHS 26.7
NEWPORT 12345678910 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL Baseline Costs £8,624 £8,606 £8,601 £8,601 £8,601 £8,601 £8,851 £9,346 £8,846 £8,846 £8,846
Setup Costs Relocation £52 £52 Severance/Recruitment Backfill (See Note1) £5,407 £5,407 Dilapidations/ Decommissioning ITC £250 £250 Project Management £110 £110 £220 Additional rental buyout at Oct 2011 £697 £697
TOTAL SETUP £110 £6,516 £6,626
Annual running costs Staff £7,061 £7,061 £728 £728 £728 £728 £728 £728 £728 £728 £728 £20,674 Estates £1,214 £1,214 £78 £78 £78 £78 £78 £78 £78 £78 £78 £3,133 other costs £211 £211 £29 £29 £29 £29 £29 £29 £29 £29 £29 £684 Newport ION estates costs £137 £137 £137 £137 £137 £137 £137 £137 £137 £137 £137 £1,507
TOTAL RUNNING COSTS £8,623 £8,623 £972 £972 £972 £972 £972 £972 £972 £972 £972 £25,998 total costs (more)/ less than baseline -£109 -£6,533 £7,629 £7,629 £7,629 £7,629 £7,879 £8,374 £7,874 £7,874 £7,874 £63,748 Cumul total costs (more)/ less than baseline -£109 -£6,642 £987 £8,616 £16,245 £23,874 £31,753 £40,127 £48,001 £55,874 £63,748
NPV (Discount Rate 3.5%) £49,259 PAYBACK MONTHS 22.7 Ev 30 Welsh Affairs Committee: Evidence
PETERBOROUGH 1 2 3 4 5 6 7 8 9 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL Baseline Costs £12,248 £12,221 £12,226 £12,261 £12,221 £12,222 £12,480 £12,917 £12,417 £12,417 £12,417
Setup Costs Relocation £78 Severance/Recruitment Backfill (See Note1) £7,617 £78 Dilapidations/ Decommissioning ITC £400 £7,617 Project Management £110 £110 £400 Additional rental buyout at Oct 2011 £1,435 £220 £1,435 TOTAL SETUP £110 £9,640 £9,750
Annual running costs Staff £10,604 £10,604 £4,990 £4,990 £4,990 £4,990 £4,990 £4,990 £4,990 £4,990 £4,990 £66,115 Estates £1,831 £1,831 £118 £118 £118 £118 £118 £118 £118 £118 £118 £4,719 other costs £221 £221 £44 £44 £44 £44 £44 £44 £44 £44 £44 £835
TOTAL RUNNING COSTS £12,656 £12,656 £5,151 £5,151 £5,151 £5,151 £5,151 £5,151 £5,151 £5,151 £5,151 £71,669
total costs (more)/ less than baseline -£518 -£10,075 £7,076 £7,110 £7,070 £7,071 £7,329 £7,766 £7,266 £7,266 £7,266 £54,629 Cumul total costs (more)/ less than baseline -£518 -£10,593 -£3,517 £3,593 £10,663 £17,735 £25,064 £32,830 £40,097 £47,363 £54,629
NPV (Discount Rate 3.5%) £41,497 PAYBACK MONTHS 28.9
Note (1): Severance costs have been estimated using an average payout per FTE. This equates to one months salary for the first five years of employment followed by two months salary for each subsequent year, subject to a cap of 12 months, averaged across individual salaries. These calculations predate the proposals contained within the current Superannuation Bill. Any changes in severance costs as a result of the Superannuation Bill would apply to all options.
7. Outcome of the Analysis 7.1 Running the Multi Criteria Analysis (MCA) model provides a clear view that the Newport office is the recommended option for closure for a combination of reasons. The score is derived from running the MCA model and presented in column three in the table below. Supplementary information is presented to aid management and ministerial decision making. NPV One-off Total CSR over 10 Total Backfill costs Spend yrs FTE in Needed Rank Office Score (£m) (£m) (£m) Region (FTE)
1 Close Newport RO 91 6.6 514 49.3 313 0 2 Close Peterborough RO 89 8.6 515 41.5 463 182 3 Close Liverpool RO 86 9.6 511 48.7 363 73 4 Close Belfast RO 86 7.4 529 26.0 156 0 5 Close Durham RO 85 10.0 514 32.8 629 311
Newport 7.2 Closure of Newport, first in the MCA model running order, is the recommended option because it combines the lowest costs of closure and the highest Net Present Value (NPV) with an opportunity to vacate a relatively poor building (and not renew the lease). Closure could also be done at acceptable operational risk because we would retain sufficient operational capacity in the remaining network to meet forecast demand for passports, without the need to recruit and backfill elsewhere. Whilst this option would not remove all the excess physical capacity, we are expecting an increase in demand, as we absorb Foreign and Commonwealth office customers from Q3/4 2011Ð12, and absorb interviews into the Application Processing Network premises, for which this space will act as contingency. Following Ministerial agreement, a Customer Service Centre will need to be established in Newport to accommodate existing customers served by the Newport regional office and interview office.
Peterborough 7.3 Peterborough is second on the list because its NPV and the ongoing CSR running costs (following closure) are reasonable and, as a larger office, a greater amount of physical space would be removed. However, the up front costs for closing are higher than Newport and, as the second largest site, there are simply too many of our staff at Peterborough for us to continue to meet demand, were we to close the office, without significant recruitment to backfill at the remaining sites. Recruiting at the same time as making some of our staff redundant is considered an inappropriate and expensive strategy.
Liverpool 7.4 The combination of its results puts Liverpool lower on the list. Whilst Liverpool has the lowest ongoing cost profile (because the Liverpool building is relatively expensive) it is also a very large public caller office catering for significant counter volumes. It also has a large contingent of some 69 HQ staff who would be Welsh Affairs Committee: Evidence Ev 31
displaced to other sites. Liverpool scores best against most of the productivity and quality measures. In addition, the lease does not expire until 2019, although there is a partial break opportunity in January 2014, which would mean closing the office in 2012 incurring significant fruitless payments.
Belfast 7.5 Belfast has reasonably low one off closure costs because there is no requirement to backfill staff anywhere else. However, closure would mean writing off the ~£5 million spent on relocation, resolving what to do with the building and living with a higher ongoing cost profile of remaining offices. As an option, it would leave us with spare staffing capacity in the system and it would only reduce our physical footprint by 8%.
Durham 7.6 Closing Durham would incur the highest one off costs and has a poor NPV. It would provide the best response to the challenge of excess physical estate but is not a feasible option due to the operational risk of closing the largest site without very sizeable backfilling, posing a real risk to the business through the next cyclical peak in demand. The Durham office lease expires in 2014, which means that, if we do not close Durham now, there is an opportunity to reduce physical capacity further at that time, by downsizing the Durham physical estate by around one third, removing the remaining spare physical capacity.
8. Other Supporting Information IPS Estates IPS Space Requirements SPACE REQUIREMENT—POST EFFICIENCIES (M2): 20,144 Current capacity (m2): 26,537 Over Capacity (m2): 6,393 Over Capacity (%): 24.1% New capacity (m2): 21,376 (Post Newport Closure) New over Capacity (m2): 1,232 New over Capacity (%): 5.8% Any slight variations in % or (m2) compared to previous figures is due changes in the Belfast estate linked to the change over of offices.
Estates Footprint and Lease End Dates per Regional Office
Note (1): Estates costs includes: building rent, services charges, rates, facilities management, fuel and utilities and maintenance. Figures represent spend in the FY2009/10.
Passport Application Volumes 2005–09 A summary of postal and total applications received per Application Processing Centre is provided in the following table:
Although postal applications are received in all local nominated offices, in order to maximise efficiencies and best delivery these are routinely transferred to other sites in the UK for processing. Ev 32 Welsh Affairs Committee: Evidence
Diversity Information*
* This information has been extracted from Dataview, which draws data from Adelphi, pay roll and Kallidus. It only represents paid civil servants and excludes unpaid staff who may be on career break, long term sick or maternity leave. This information is accurate as of end September 2010.
Black and Minority Ethnic
A summary of Black and Minority Ethnic (BME) data per APC is provided in the following tables:
Gender
A summary of gender data per IPS office is provided in the following table: Gender Female Male Total IPS 63% 37% 100% Belfast 60% 40% 100% Durham 68% 32% 100% Liverpool 67% 33% 100% Newport 74% 26% 100% Peterborough 71% 29% 100%
Disability
A summary of disability data per IPS office is provided in the following table:
Sexual Orientation
A summary of sexual orientation data per IPS office is provided in the following table:
Working Patterns
A summary of working patterns data per IPS office is provided in the following table: Welsh Affairs Committee: Evidence Ev 33
Grade A summary of grade data per APC is provided in the following table:
Age A summary of age data per APC is provided in the following table: Ev 34 Welsh Affairs Committee: Evidence
The chart below models the age profile data per APC:
Age Profile per APC 25%
20%
15%
10% % of total FTE % total of
5%
0% 16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+ Age Range IPS Belfast Durham Liverpool Newport Peterborough
3 November 2010
Written evidence submitted by Newport City Council
Summary — The announced closure by the Identity and Passport Service (IPS) management of the Newport Passport Office with a 90 day consultation period beginning on 19 October 2010 was completely unexpected by the workforce, the community of Newport, the City Council, Newport Unlimited (the publicly funded Urban Regeneration Company for the city), and the Welsh Assembly Government. The Council, URC, WAG and other IPS stakeholders had been working tirelessly behind the scenes over the last three years to assist IPS in their search for new office space in the area to meet all the current and future requirements, economically, efficiently and effectively. This includes vacant space at the former HMRC Tax Office and also potential empty space at other Newport based civil service operations, as well as giving consideration to new and refurbished “fit for purpose” offices in the city centre. — Whilst we welcome the commitment by the Rt Hon Damian Green MP to establish a Customer Service Centre to accommodate existing customers, we have no clarity as to what the offer will mean in reality in terms of the impact on staff, customers or on Newport. Equally, we were not made aware of the criteria for the IPS operational review and efficiency programme which seemingly concluded that the application processing function would be more cost effectively run from elsewhere. Without this information, it is difficult to be able to counteract such an assessment. — Although all public services and their budgets are under pressure in this climate no indication had been given by the IPS of any threat to the Newport office. Indeed, all indications had been positive which was not unexpected given the operational success of the service at Newport. Despite the close working relations which have grown up between the City Council, the URC and IPS, the first indication of a threat was the instigation by IPS of the formal consultation with staff on closure. We thus greatly welcome the opportunity of the hearings of the Welsh Affairs Committee to consider the broader adverse economic impact such a closure of the existing passport application processing office would have for the people of Newport and the regeneration of the city now under way. — It is also an opportunity to outline to central government and the IPS how retaining the Passport Office with the full application processing service at Newport will help the IPS achieve its own business objectives without the costs and disruption of moving out of the area while also enabling central government to deliver on its policies of devolving and relocating key government departments and public services so as to improve local economic outcomes and reduce worklessness. By closing the IPS the Government runs the risk of appearing to make savings on one part of its account whilst actually increasing costs in another because of the increased welfare payments which will result from the loss of jobs directly and indirectly arising from this proposed closure. Welsh Affairs Committee: Evidence Ev 35
— The closure of the current operation would also be a set back for a City which had until a few weeks ago been riding high on the success of hosting the Ryder Cup, staging a very successful event on a global stage with an economic legacy of tangible value within their sights. The work of this City in marketing itself for inward investment on that international stage took years to achieve and can be undone by this proposal. Newport has been lifting itself up after decades of decline—and needs central government decisions to reinforce that effort. Wales itself needs Newport to succeed economically as the endeavour to raise the nation’s GDP can only succeed if Wales’s youngest city achieves its potential. For Wales to be potentially the only nation in the UK to lose its Passport Office—delivering equally to a bilingual nation while providing best-in-class offerings as part of the overall UK provision—has larger implications even than those for the economy. — The Case for Newport outlines how the City and communities of Newport will be adversely affected by closure of the current office and how the costs to IPS will rise while the quality of service to customers in Wales and beyond may fall. The Case for Newport, however, stresses even at this stage the desire of the Authority and the URC to work creatively with IPS to find the right business solution for IPS itself. We believe that lies in remaining in Newport, providing the best-in-class services that are provided today.
Introduction (1) The unheralded announcement by IPS of the proposed closure of the Newport Passport Office came as the City, Wales and the world of golf were celebrating the extraordinary success of the Ryder Cup. The area was riding high and we all felt that our efforts to regenerate this great city had received a great boost. The IPS proposal will set back those efforts and in particular damage our inward investment objectives which, in line with UK government policy on devolving government services and assets, aim to secure more civil service and agency relocations. Coming after the famous victory at Celtic Manor feels like “one step forward two steps back”. (2) This is why The Case for Newport set out here is so important—and important, we submit, not just for the economy and marketing of Newport and indeed Wales, but also for the achievement of IPS’s own business objectives and indeed the broad policy objectives of the new UK government. Retention of the Passport Office at Newport as it operates today is vital and we will spare no effort in trying to convince those who are taking the ultimate decision on this proposal that Newport—in which there are a number of ideal alternative sites if the current one is no longer deemed appropriate—remains the optimal location for the full service. (3) Therefore, this submission will broadly cover the impact closure would have on: — The service—losing highly skilled and experienced public sector workers will impact adversely on the service, as they have made innovative and significant contributions to IPS nationally and locally. Their skills, experience, best practice, and capacity will be lost. Their best-in-class quality work means they uphold the integrity of the passport office service and secure the country against fraudulent passport claims. — Newport—the loss of well-paid staff with an average salary of £22,000 from a closure of the application processing function means a reduction both in overall GDP and in invaluable footfall in the city centre from service customers which will reduce spend by millions in the local economy, and affect city centre vibrancy. Newport City Council together with its partners at Newport Unlimited and WAG has been focusing all of its efforts over the last five years on regenerating Newport in terms of its physical environment and economy and to grow its potential as a regional hub. It has been successful in attracting over £100m of private and public investment and created over 1,000 new jobs. With this one closure, a third of this work will be undone straight away, and our analysis demonstrates over 500 jobs losses could result in South East Wales as a direct result. The damage is deeper and longer term than this however. Such a decision will unsettle market confidence in Newport just at the time Newport is seeking a high quality developer for its multimillion pound city centre retail scheme. Such inward investment is vital to the city’s future— from both private and public sectors. The IPS closure of the current operation and opening of a smaller customer-service centre would undermine also the marketing campaign to attract more government department relocations to the City on the model of the hugely successful move to the area of the Office for National Statistics—a move which raises question marks over the published rationale of IPS for exiting the City. — Wales—the decision to remove passport application processing from Newport and Wales as a whole raises fundamental questions about the commitment of the UK government going forward to maintain existing key offices in Wales for non-devolved government services let alone relocate further ones. Economically, Wales, which has seen its GDP decline in relation to the UK average over the last few years and which will be seriously impacted by the post-CSR downturn in public spending, cannot easily absorb this loss of high-value jobs.
The Service—A Loyal and Creative Staff (4) Newport Passport Office has always been best in class. A former passport minister, Meg Hillier, praised the Newport office staff for their excellent work, their “can-do” attitude and their exceptional customer care. Ev 36 Welsh Affairs Committee: Evidence
Newport was the regional office that always volunteered to do any innovative pilot, including the fast track system, which has now been rolled out across the United Kingdom. The exemplary knowledge, expertise and innovation shown by Newport staff—both in customer service and application processing—stood out in the IPS by common assent. This could be wasted—at precisely the time when such loyalty and creativity will be required by a service under fiscal pressure—if the Newport Office as it currently operates is closed and staff are made redundant or dispersed. (5) The message this sends to civil servants at this time is the polar opposite of best practice. It says: the reward for striving for excellence over many years—remembering many employees have been there all their working lives as there was little turnover of staff—is the closure of your office and redundancy. This, moreover, in an area which currently offers few jobs meeting their skills or salary levels. (6) There must also be serious concerns over the security implications of the loss of experienced, high quality staff from the service. The security of the British Passport—and thus the safety of UK citizens—is significantly maintained by the integrity and skills of the staff involved in processing applications. If the work they do has to be done by fewer—and less experienced—people, the capacity for error and misjudgement and therefore security risks must increase as the specialist expertise that exists in Newport in fraud detection will be lost. Short-term savings can have long term adverse consequences. (7) This is a rational concern founded in the demonstrable success Newport has had in successfully combating fraudulent passport applications. Newport has been a leader amongst regional offices in identifying and reducing fraudulent applications. Having experienced staff with local knowledge—because they are part of the community—has been at the heart of this success. Any new approach which over relies on desk research or ICT will not be as secure as a process which has its basis on staff confidence that the passport applicant is a genuine one. (8) We understand the demands currently being made on agencies and government departments to reduce running costs and improve efficiency—“more for less”. However, in terms of quality of service and security alone, the proposed Newport closure in our view will lead just to “less”. We also challenge whether any real savings to the public exchequer will actually accrue as the net result of the office closure will be an increased financial burden to the public purse in terms of unemployment costs and lost productivity (see below). We have not been made aware of the criteria for the IPS operational review and efficiency programme which seemingly concluded that the application processing function would be more cost effectively run from elsewhere. Without this information, it is difficult to be able to counteract such an assessment. (9) It is our view that if the IPS were really seeking “more for less” from reducing their cost-base, rationalisation of their property portfolio and modernisation of customer service and application processing, then that is precisely why Newport should be the location of choice . Operating costs—rent and services—are well below UK averages (and radically lower than London or South East costs) offering great value of money to the taxpayer. If IPS were looking for better value locations for more back office processing to reduce overheads, they should actually be thinking about consolidation in Newport, rather than retrenchment. That is precisely why other government bodies have taken advantage of these economic benefits to reduce their service costs and relocated to Newport such as the Office of National Statistics (ONS). (10) The executive office of the UK Statistics Authority moved its headquarters to Newport, and about 1,300 ONS staff now live and work in Newport. The Head of Communication and Planning at the ONS, Dave Sharp, said of the relocation that: “the government were trying to encourage many civil servants to leave the South East and we decided this would be a great opportunity to leave London. So we thought our quality of life has to get better so we came down here and we found that’s exactly what’s happened, we have countryside on our doorstep, we have beaches down the road and it’s fantastic.”6 Stressing the quality of life that civil servants are currently able to enjoy in Newport. (11) We note that the IPS has argued that Newport is currently operating with an “unsustainable 25 per cent excess capacity and that detailed analysis found that closing Newport would result in the greatest reduction of spare capacity at the lowest cost to the taxpayer”. We reject this entire analysis and the implication that a highly manageable short-term capacity surplus should have the long term consequences for the area we have indicated. We also note that this figure may include Ministry of Justice court service space in the passport office building that was recently vacated, and as such may not provide a fair reflection. (12) The related second error is the assumption that long-term cost-savings will be made by exiting the City rather than relocating within the area and indeed locating other more marginal capacity to Newport. No compelling evidence has been presented by IPS for this “exit strategy”. Nor could it be, when moving back office staff from England to Newport would be a much more cost effective way to solve the excess capacity, as has been successfully shown with the Office of National Statistics relocation to the area. (13) In support of this we have data released by a Freedom of Information request in 2005 comparing the relative efficiency of the use of space by staff. In terms of “numbers of staff per m2” of office space, Newport was significantly ahead of Durham and Glasgow in those terms. Given that in 2008 around 100 staff were made redundant from the Glasgow office, there is now further excess space there in Glasgow by comparison with Newport. But it is the latter which is irrationally and inequitably marked for closure. 6 In Newport Unlimited, “Newport—Twenty Four Seven: Open for business around the clock”, p.12. Welsh Affairs Committee: Evidence Ev 37
(14) Lambert Smith Hampton, commercial property consultants, have identified Newport as the third best office location in the UK outside London, in terms of property rental costs, availability of high quality premises, labour costs, availability of skilled workforce, and recruitment potential.
(15) There is a wide range of prime office space available in Newport for the passport office to move into, around the station, on the outskirts, and new buildings close to the river, which can cost as little as £8.50У15.50 a square foot for grade A office space. The average price for office space in London’s West End—IPS’s London office—is around £75 a square foot.
Customers—The Losers
16) We welcome the undertaking to establish a new Customer Service Centre in Newport. Whilst customers would still be able to access the passport counter service in Newport through a new Customer Service Centre in the City, ironically, there is also evidence that where customers have used Newport remotely, as it were, by making applications by post, the efficiency of processing has been such that applications have been turned around far faster than at other centres. It is hard to see how customer service for users in Wales and the South West or indeed outside will actually increase through closure.
(17) Whilst we welcome a commitment to retain some kind of customer centre in Newport, we stress that Wales needs its own passport office in order to fully accommodate the requirements of a bilingual population to comply with the Welsh Language Act (1993). This states: “Every public body […] shall prepare a scheme specifying the measures which it proposes to take, for the purpose […] of giving effect, so far as is both appropriate in the circumstances and reasonably practicable, to the principle that in the conduct of public business and the administration of justice in Wales the English and Welsh languages should be treated on a basis of equality.”
(18) The IPS would have needed to completely revise the service’s Welsh Language Plan under the Act as Welsh speaking customers’ interests could be endangered with the rapid downsizing or closure of the Newport passport office, jeopardising the capacity and the quality of the service they receive in their own language, given also that the other interview offices in Wales are marked for closure.
(19) The compassionate application processing service would be lost from Newport under the proposed closure, leaving no such processing service within easy reach of Wales or the South West. The excellent public transport accessibility currently offered to customers—excellent train and motorway facilities will be lost to customers with the removal of the processing service from the building. Customers in Wales and the South West will lose out on a valued service and this impact could be felt by applicants across the UK.
Newport—Closure Versus Regeneration
(20) The closure of the Newport office in its current location and function (including processing applications) will have a seriously adverse effect on the economy of the area at a critical moment in the economic cycle. It will set back the growth previously worked for and expected from the regeneration of Newport. We note at this point that, to our knowledge, no economic impact assessment was undertaken by IPS preceding the decision to close—an extraordinary fact given the importance of the office to the area at this time. Indeed, not just the area but the specific location whose vicinity is the subject of a proposal by Newport City Council and the publicly funded Urban Regeneration Company to market the area for a major new retail and mixed use development which will bring some new economic activity to the town centre. The presence of the Passport Office with its 300 staff and up to 800 customers a week (plus the same again who typically accompany them whilst visiting the area) at the peak was to be an integral part of that marketing effort.
(21) Based on an assumption that 255Ð270 net jobs are to be lost, and some other assumptions around median salary and passport office customer spend in Newport7, we have assessed the potential impact of the job losses for the South East Wales region. It is important to note that there is no leakage effect (the impact of the job losses is directly felt to those who will lose their jobs and it is assumed there will be no redeployments), and there is no local or regional “displacement” effect—no other passport office in the region will take on the work delivered by Newport office. Our assessment demonstrates that taking into account the immediate spend of customers (and those who accompany them), as well as staff, the impact is far wider, for example such spend supports local retailers who in turn purchase other goods. This significantly impacts the viability of the local retail offer. Therefore as Table 1 below demonstrates, the full effect of the loss of jobs in the passport office could be 481 jobs.
7 A median salary of £22,100, an average customer/visitor spend of £10 per head and the spend by staff living within 10 miles of Newport city centre. This spend equates to at least £350,000 and could therefore reasonably be said to equate to 8.75 jobs being supported in the local area. Ev 38 Welsh Affairs Committee: Evidence
Sub-region first Impact of direct job Sub-region second Final impact of the Jobs Lost round multiplier losses round multiplier job losses
255 Passport Office 1.5 383 1.15 440 270 Passport Office 1.5 405 1.15 466 8.75 Jobs supported by Customers 1.5 13 1.15 15 Total Impact 455Ð481 jobs * In addition to the passport office staff, an additional 78 subcontractor jobs may be lost that may not be required for the proposed Customer Service Centre (Steria, Interserve, I.O.N.). (22) A significant fact here is also the strength of the local economy. If the local economy was robust with plenty of job opportunities, then the majority of those who lose their jobs would relatively soon find their way back into employment. However, if this happens it will be in the private sector rather than in the public sector where 490,000 job losses over the next five years have been forecast by the Office for Budget Responsibility. Given that public sector employment dependence is higher than the UK average in Newport, there is less chance of this happening than elsewhere in the UK. (23) Newport is still recovering from the decline of heavy industry a decade ago, with the closure of the Llanwern and Ebbw Vale steel plants and the loss of more than 3,000 jobs. WAG and the Council have driven regeneration in the area through the urban regeneration company Newport Unlimited which was set up in 2003 specifically to promote regeneration both in the physical environment and economy. After five years work, Newport Unlimited in conjunction with Newport City Council has attracted almost £100 million of private sector investment into Newport, creating over 1,000 new jobs. Losing the Newport passport office in its current location and function would undo a third of that work at a stroke. The Newport economy could potentially yield £100 million from the Ryder cup and now is the time to maximise that economic legacy. However, this will be completely undermined by the news of the passport office partial closure, meaning the momentum of this opportunity will be lost. (24) Newport is seeking a quality private sector developer to take forward its long awaited retail scheme at Friars Walk for a shopping centre which will bring further investment and economic growth to the city centre and would be sorely disappointed with the dramatically reduced footfall. Some key retail anchors have already announced their intentions not to renew their leases, such as Marks and Spencer, Next and Monsoon. Newport really needs to make the scheme work to bring vitality back into the City centre, and stop the leakage that has been occurring to nearby Cardiff or Bristol. Market confidence will be further undermined by the potential closure of the function as it currently operates with fundamental repercussions for the council on their retail development. The argument that the private sector will step in to provide replacement jobs is incorrect, as the private sector is already shrinking. The private sector in Newport is not crowded out by the presence of public bodies, they actually rely on that presence. (25) Newport Unlimited along with Newport City Council has been striving to bring together the public sector in Newport to improve efficiency, avoid duplication by joining up services whilst aiming overall for increased economic growth for Newport. This does not show public sector solidarity as closure of the current full function would mean fundamental adverse impacts to all that Newport Unlimited has been trying to achieve, the investment it has already put in, and the increased burden on other public sector in terms of benefits, welfare to work programmes, and reduced footfall in the city making for a less vibrant city centre. (26) It has had to work hard at diversifying its economic base by trying to attract businesses from different sectors to the area and has been rewarded in its efforts with the arrival of several major employers with national and international presence such as Next Generation Data, Cassidian, Yell, and Admiral. Newport is becoming to be known as a place to come to do business as it has great transport and accessibility routes (under two hours from London with trains leaving every half hour, 35 minutes from the International airport Cardiff) low operating costs, and a high quality lower cost labour force with no weighted living allowance requirements. (27) However, this is a hard fought for and still vulnerable reputation which could be badly affected by the Passport office closure of the current function and opening of a Customer Service Centre, particularly as it was a cornerstone of Newport’s portfolio for attracting other public sector bodies as well as further private sector businesses to re-locate.
Wales (28) We understand that the Welsh Assembly Government was not consulted ahead of the closure announcement, which is behaviour not likely to strengthen the relationship between the nations of this “United” Kingdom. (29) The closure of the full service will negatively impound the post Ryder-cup effect on Newport itself, and also the surrounding areas. (30) The closure announcement came before the Comprehensive Spending Review, which is itself very challenging for Wales, with the cancellation of several key strategic projects that would bring investment and jobs to Wales. For example, the cancellation of the £14 billion project to centralise the Armed Forces training Welsh Affairs Committee: Evidence Ev 39
at St Athan in the Vale of Glamorgan, the cancellation of the £1 billion electrification of the South Wales railway line from London-Swansea, and the prison for North Wales to name a few. These announcements compound the impact for Wales on the proposed closure of the passport office with its current functions. Wales needs some positive investment news from the UK government and we believe the retention of the passport office in full offers a realistic example of that. Especially since Newport provides such a positive environment for relocated government departments and indeed Wales.
Next Steps and Recommended Actions—Making the Case for Newport (31) Newport City Council would be keen to present our case for Newport at a hearing of the Welsh Affairs Committee. (32) Whilst we have been very robust in our opposition to closure, Newport City Council and its stakeholders are very keen to continue to work with the IPS to find the right solution for IPS in terms of new accommodation, quality service and reduction of overhead and operating costs and feel confident that Newport can provide that solution. (33) Newport offers: — A strategic location on the M4 motorway ideally positioned between the cities of Bristol and Cardiff; — Easy road and rail access to London (in under two hours), the South East of England and the Midlands; — Excellent quality of life, on the doorstop of the most beautiful part of the country such as the Usk and Wye Valleys and Brecon Beacons; — Strong heritage, arts and environment and sporting facilities; — Competitive property prices; — World leaders in manufacturing, distribution/logistics, financial/business services and public sector operations are all located here; and — Flexible and high quality office space at reasonable rents from £8.50У15.50 per square foot. (34) We would wish the Welsh and UK government to consider in the worst case scenario how it is going to assist Newport to fill this gap in its economy and ensure the impact on its ambitious regeneration and inward investment programme is not adversely affected. It would of course seek support for other public sector relocations from London or elsewhere in the UK. (35) We would hope that the Welsh Affairs Committee would present the evidence given here by Newport City Council to the Rt Hon Damian Green who has publicly committed to undertake an impact assessment of this proposed closure. We believe the compelling case for full retention has been made. 3 November 2010
Written evidence submitted by the Welsh Assembly Government Summary — The labour market in Newport has performed relatively poorly in recent years with the latest data showing (ILO) unemployment at 9.9%, compared to the average for Wales of 8.4%. — There is also a relatively high claimant count rate in Newport, at 4.7% of the 16Ð64 population, above the Wales rate of 3.7%. — There is a relatively high dependence on public sector employment, estimated at 28.5% of residents (compared to a figure for the UK of 25.0%); and — Taken together, these factors suggest that the local economy is particularly vulnerable going forward, given the pressure on the public sector. — In addition, specific issues arise in connection with the prospective loss of jobs in Newport city centre, which is currently experiencing severe difficulties, with closure or relocation of prominent “anchor” retailers. — The loss of jobs at the Passport Office (especially if coupled with the loss of customer facing / attracting services) could compound such effects, with potentially severe consequences for the city centre. — To close the Newport Passport Office leaves Wales as the only nation within the United Kingdom and the only “national region” within the European Union not to have its own Passport Office. — The proposal raises questions about the UK Government’s commitment to the quality of service to the bilingual population of Wales. — The majority of central Government civil service jobs in Wales are in non-devolved Whitehall Departments. Proposals and actions by individual UK Government Departments risk having an unintended cumulative negative impact in Wales. Ev 40 Welsh Affairs Committee: Evidence
Purpose 1. The Committee has said it wishes to examine this issue in line with its remit for those issues which affect the people of Wales. This document outlines the potential impact on the people and communities of the Newport area arising from the proposed closure of the Newport Passport office as part of the UK Government’s fiscal consolidation measures. 2. The approach is to employ the overall spending cuts outlined in Budget 2010 and the subsequent Comprehensive Spending Review (CSR). The figures used are in advance of any refinement on the implications of the spending review at UK level and the completion of the Welsh budget setting process. These, it is expected, will yield more detail on the nature and location of effects. 3. This document does not repeat the detailed arguments set out in The Case for Newport, the written submission from Newport City Council. However, our own separate analysis fully bears out the points made in that submission.
Public Sector Employment Reduction in Wales 4. Office of Budget Responsibility estimates, made for the UK as whole, suggest that public sector employment losses in Wales could account for some 5,000 posts in 2011Ð12 rising to around 30,000 by 2014Ð15. This would represent about 0.5% and 2.5% of Welsh employment respectively. Taking into account multiplier effects, these numbers might increase to around 8,000 in 2011Ð12 and 51,000 by 2014Ð15, representing around 0.5% and 3.0% of Welsh employment. 5. The area covered by Newport Local Authority is presently towards the higher end of reliance upon public sector employment at 28.5%, it is around the seventh highest within the 22 Welsh Local Authorities, and is well above the UK average. 6. In the recent past, the devolved Welsh Assembly Government has been able to offer transfer opportunities to civil servants from non-devolved organisations (such as the Passport Office); this has saved the considerable cost of redundancy—some £34,000 per individual—to the taxpayer and has helped maintain levels of economic activity. The impact of the UK Government’s fiscal consolidation is upon devolved as well as non devolved jobs and now makes any assistance of this sort improbable in the foreseeable future. 7. In addition, other employers within the devolved Welsh public services are equally impacted and face considerable job-loss themselves going forward. This includes the Local Authority in Newport and other organisations including in the Health and Education sectors. Together they currently employ some 12,000 to 15,000 people within the Newport area. 8. Apart from the Passport office, other major, non-devolved UK Government employers with offices in the area include the Department of Work and Pensions/Job Centre Plus (DWP/JCP), the Office for National Statistics (ONS) and the Intellectual Property Office (IPO). Together, these currently employ over 2,900 local residents and, in common with the rest of the public sector, all anticipate reductions in permanent jobs over the next four years.
Wider Implications 9. Over Wales as whole, non-devolved, central government civil servants represent some 12% of all public sector employment. The majority of these jobs are in sizeable organisations such as DVLA in Swansea and Companies House in Cardiff. But there is also a widespread DWP/JCP presence as well as a smaller—but in areas with few career options, important—dispersal of bodies such as the Ministry of Justice and the Ministry of Defence. The implications for the well being of Welsh people and the Welsh economy from any precedent set in Newport is now a major issue for the Welsh Assembly Government. 10. Wales is a bilingual nation. The Newport Passport office currently promotes the full accommodation of the requirements to comply with the Welsh Language Act (1993), particularly the principle that Welsh and English should be treated on the basis of equality in the conduct of public business and the administration of justice. Closing the Passport Office has implications for one of the most distinctive signifiers of national culture and identity across the UK, the living Welsh language. 11. The closure of the Passport Office would leave Wales as the only nation within the UK without its own Passport Office and this point is also made by Newport City Council in its evidence to the Committee. This matters; not least for reasons of economy, language and identity noted above but also because it would leave Wales as the only EU “national region” without a Passport Office, which raises fundamental questions about the broader commitment of the UK Government.
Vulnerability of Newport 12. Taken together, vulnerability can be expected to be greater where the public sector accounts for a high share of employment, the labour market is relatively weak and Job Seekers Allowance recipients form a higher share of the population. This is broadly the situation found in Newport with: — an employment rate of 66.3%; Welsh Affairs Committee: Evidence Ev 41
— an estimated public sector employment rate of residents of 28.5%; and — an ILO unemployment rate of 9.9%. 13. The importance of Newport to Wales and the challenges the city faces were recognised by the Welsh Assembly Government and Newport City Council when they established the Urban Regeneration Company Newport Unlimited in 2003. With a mission to work with the public and private sectors, the company’s aim is regeneration; it had an instrumental role in the hosting of the Ryder Cup 2010. But such efforts by the Welsh Assembly Government to lift an already economically challenged area face major risks from unforeseen impact where the welfare of Wales is not the first consideration. The loss of jobs from the Passport Office is a case in point. 14. As noted above, Newport city centre is currently experiencing difficult trading conditions which are likely to be exacerbated by the loss of a major employer and customer-facing service provider. Recent and prospective closures in the main shopping area have included major chains which provide relatively well paid work at the quality end of the retail trade. This is being followed by moves away by other major “anchor” retailers who are looking to relocate to a retail park at the edge of the city. 15. Although difficult to quantify, the loss of well paid, satisfying employment in public and private sectors is likely to impact upon the confidence and sense of well-being within the local community which is then liable to become “depressed” in the psychological as well as the financial sense. Such loss of confidence can also makes the area less attractive to future inward investment.
Conclusion 16. Newport, particularly the city of Newport, is showing clear signs of being vulnerable to economic decline. It is more dependent than most cities upon public sector employment and has a high claimant count and ILO unemployment rate. Without any immediate signs that there is growth within the private sector locally (in fact the opposite picture appears to be emerging) the risk looks significantly higher going forward. The loss of 300 relatively well paid, high value jobs with the closure of the Passport Office could compound such effects, tipping the city centre into a period of decline which will be difficult to reverse. 17. In addition, the proposed closure raises serious issues about the commitment of the UK Government to Wales, its people, culture and economic sustainability going forward. November 2010
Written evidence submitted by William Graham AM 1. The Welsh Conservatives Group in the National Assembly for Wales have expressed united opposition to the closure of Newport Passport Office, with eleven of the Group’s Assembly Members signing a Statement of Opinion calling on the UK Government to reverse the proposal. (Written Statement of Opinion -OPIN 2010 -0057—Tabled -11/10/108) Conservative Councillors who lead Newport City Council have unanimously joined the campaign against the closure. 2. The Passport Office closure has the potential to cause considerable reductions in revenue for small businesses operating in Newport City Centre. The City Centre has suffered recently as a number of retailers have opted to leave the location on favour of out-of-town retail parks. In October, Marks & Spencer announced it would be moving location to the Newport Retail Park in Spytty, Newport transferring 70 staff in early 2012. Other major retailers to have announced plans to leave the City Centre in 2011 include Next and Monsoon. The number of empty business premises in Newport is above the national average, and the closure of the Passport Office will further exacerbate the problem. 3. Following the decline in heavy industry, the Civil Service has become Newport’s biggest employer. According to Newport City Council Figures, between 3,000 and 4,000 civil servants work in the City9.In addition to the Passport Office, the National Statistics Office (1,300 jobs), Intellectual Property Office (1,000 jobs) and HM Prison Service (500 jobs) are major employers10. Having acquired a reputation for expertise in administering public services, it may harm the City's prospects of gaining jobs from Government departments that are earmarked for relocation to be seen to be cutting public jobs. There is the prospect of further job losses at the other civil service employers in the City, while weak growth in the private sector and one of the lowest rates of business start-ups in the UK mean that the private sector is unlikely to be able to employ those people previously employed in the civil service in the short to medium term. The City experienced a net loss of 6,700 jobs in the private sector between 1998Ð200811 despite advertising campaigns highlighting the quality of office space available in Newport. 8 http://www.assemblywales.org/bus-home/bus-guide-docs-pub/bus-business-documents/bus-business-documents-state- opinion.htm?act=dis&id=199419&ds=10/2010 9 Newport City Council: Government Relocation Service—Choose Newport 10 Source: Welsh Government 11 Centre for Cities Outlook 2010 Report http://www.centreforcities.org/outlook10 Ev 42 Welsh Affairs Committee: Evidence
4. Local communities have expressed considerable opposition to the proposed changes. The local newspaper based in Newport, The South Wales Argus, has organised a petition against the closure attracting 20,000 individual signatories. On Saturday 16 October 2010, over 1,000 people marched through Newport in protest culminating in a rally in John Frost Square. 5. The proposed reduction in staffing levels will leave Wales as the only nation of the United Kingdom not to have a large Passport Office. Constituents have contacted my office expressing concern that they will have to travel to London to access a same day Passport service. My correspondents have also highlighted the inequity of Newport suffering 250 job losses when this figure could have been reduced if the cuts burden had been spread more evenly between the Identity and Passport Services’ other regional offices at Liverpool, Belfast, Peterborough and Durham. 8 November 2010
Written evidence submitted by the Welsh Language Board 1. The advice that is offered below is based on the Welsh Language Board’s remint under Section 3 of the Welsh Language Act 1993.
Welsh Language Act 1993 Part 1 Section 3.—(2)...the Welsh Language Board will (a) advise the Secretary of State on matters concerning the Welsh language; (b) advise persons exercising functions of a public nature on the ways in which effect may be given to the principle that, in the conduct of public business and the administration of justice in Wales, the English and Welsh languages should be treated on a basis of equality; (c) advise those and other persons providing services to the public on the use of the Welsh language in their dealings with the public in Wales. 2. The Identity and Passport Service’s Welsh Language Scheme clearly states its commitment to providing services through the medium of Welsh to the public in Wales: 2.3 UKPS starting point, in recognising the equality of the Welsh and English languages, is that customers in Wales who prefer to transact their business in Welsh, whether in correspondence, by telephone or in person, are welcome to do so. The measures in this scheme have the aim of ensuring that any customer who wishes to do so can obtain convenient and prompt access in Welsh to the passport service which they require. We are committed to providing an equally high standard of service in Welsh and English. 3.2 The UKPS planning of services for the public will take account of the need in Wales for equality between the Welsh and English languages and the commitments given in this scheme. 3.8 In processing applications for addresses in Wales, the UKPS will provide correspondence, information, etc, either bilingually (or in both languages) or in the individual’s preferred language (as indicated by the language of the application form). 3.14 Welsh language applications will be processed within the same timescale as applications made in English. 4.1 The UKPS welcomes and will reply in Welsh to all correspondence received in Welsh. 4.2 The UKPS will use Welsh in any communications that arise from the public counter or a telephone conversation with a customer using Welsh. 4.3 The UKPS will use Welsh in personal correspondence we initiate with any customer in Wales who we are aware has previously indicated a preference for corresponding in Welsh. 4.4 The UKPS have published standards for acknowledging and replying to all correspondence within a stated time. The same standards set for responding to letters in English will apply to letters in Welsh. 4.7 Since January 2000 the UKPS has outsourced its telephone service to a national call centre. Callers from Wales receive a bilingual greeting and are given the option to have their call dealt with in either the English or Welsh language. 3. From our experience of working with the Identity and Passport Service over a period of time, the Board is aware that it is from the IPS’s office in Newport that almost all of the agency’s Welsh language services are provided. Many of the statements within the agency’s Welsh language scheme support the Board’s observation: 2.4 All applications made from addresses in Wales are dealt with by the Newport Passport office. 3.7 The UKPS main elements of contact with the public are on the telephone and via the application form. In both cases an effective language choice will be offered and the UKPS will ensure that customers who live in Wales will be able to receive a service through the medium of Welsh from the Newport Office. Measures outlined in this Scheme indicate how this will be achieved. Welsh Affairs Committee: Evidence Ev 43
4.8 Those callers who contact the Newport Office directly will also have the option of an English or a Welsh service. 4.9 The UKPS will aim to increase in its Newport Office the number of staff competent to transact business in Welsh by offering Welsh language training courses and recruiting Welsh speaking staff where appropriate. 4.10 The UKPS will offer a Welsh speaking service at our public counter in Newport and ensure that any members of the public who wish to have face-to-face contact are able and welcome to do so in Welsh. A poster will be displayed advertising the fact that this service is available. 4.12 The UKPS will provide training to staff in Newport who have contact with the public in procedures for dealing correctly with enquiries from customers who prefer to transact their business in Welsh. 5.14 To ensure that customers in Wales have no difficulty in obtaining bilingual/dual version forms and leaflets, the UKPS will maintain procedures to ensure that the Newport Passport Office and our outlets in Wales have them displayed and that they remain adequately stocked. 4. Presently, the IPS cannot provide some online services through the medium of Welsh (passport renewals for example). Welsh speakers must therefore continue to access these services through paper procedures if they are to receive a Welsh language service. The Newport Passport Office is currently responsible for administering these procedures. 5. The IPS has a regional office in Liverpool which is accessible to some members of the public Wales, but it is unable to provide services in Welsh. Closing or seriously reducing the Newport office’s capacity, would therefore inevitably cause a very significant reduction to the services provided in Welsh by the IPS. 6. The IPS provides services that members of the public must use. Failing to deliver these services through the medium of Welsh will cause obvious problems to Welsh speakers.
7. Conclusion The Conservative Government gave an undertaking during the passing of the Welsh Language Act 1993 that Crown bodies, such as the IPS, would provide services in Welsh in accordance with Welsh language schemes in the same way as other public bodies. I trust therefore that the IPS’s capacity to deliver services in Welsh will be protectred when deciding upon changes to the organisation’s structure. 8 November 2010
Written evidence submitted by Veronica German AM Background 1.1 The Welsh Liberal Democrats and I noted with concern the announcement on 8 October that the Identity and Passport Service was intending to close its office in Newport and have opposed this decision from the outset. 1.2 I along with The Welsh Liberal Democrat group in the National Assembly have tabled a Statement of Opinion to encourage members of the National Assembly to express their opposition to the proposed closure. The party has also formally expressed its wish that “the proposal to close the Newport Passport office to be reversed”. (See Appendices one and two).12 1.3 I have written a letter to The Rt Hon Cheryl Gillan MP, Secretary of State for Wales voicing my concern (Not printed). 1.4 Likewise, Newport City Council is opposed to the closure of the Newport Passport Office and the estimated loss of 300 jobs.
Arguments 2.1 I acknowledge that there are many arguments against the closure of the Newport Passport Office, but I have highlighted below the ones that I feel are most significant. 2.2 Three hundred jobs will be lost in Newport as a result of this decision. Compared to the location of other Passport Offices, Newport is relatively a more deprived area and the closure will have more of an impact on the local economy than elsewhere. For example, Newport was recently rated as the 28th most competitive city in the United Kingdom, despite receiving a significant boost in the last year.13 I believe that therefore there will be a bigger impact on the local economy by the closure of the Newport Office than reductions in staffing numbers elsewhere. I fully support efforts to reduce the deficit but believe that the cost of doing so should be borne equitably by all parts of the UK. 12 Not printed. 13 Robert Huggins and Piers Thompson, UK Competitiveness Index 2010, (UWIC 2010). Ev 44 Welsh Affairs Committee: Evidence
2.3 There has been a drive over several decades to decentralise many government departments outside of areas with expensive land and labour costs. This has two benefits; firstly in cutting costs and secondly in spreading the mechanisms of government across many parts of the UK. I believe that the costs of owning or renting in Newport are substantially lower than in other parts of the country. In Newport grade A office space can cost as little as £8.50У15.50 a square foot. The average price for office space in London’s West End— IPS’s London office—is around £75 a square foot. With this in mind I feel that the city must therefore be considered as a lower-cost alternative to other areas of the country. 2.4 This decision will leave Wales as the only nation in Europe without its own Passport Office. This will not only disadvantage many millions of people from Wales, and the south-west of England, who are able to use this office but will suggest that the IPS is not willing to spread its work across all of the United Kingdom. 2.5 I welcome the commitment to retain some kind of customer centre in Newport, but I still feel that Wales needs its own passport office in order to fully accommodate the requirements of a bilingual population to comply with the Welsh Language Act (1993). This states: “Every public body […] shall prepare a scheme specifying the measures which it proposes to take, for the purpose […] of giving effect, so far as is both appropriate in the circumstances and reasonably practicable, to the principle that in the conduct of public business and the administration of justice in Wales the English and Welsh languages should be treated on a basis of equality.” It is essential to retain a passport office in Wales for ease of access not just to people in Wales but also people in the south west of England. Taking away this service in Newport could be the difference between a three hour round journey and a near ten hour round journey. 2.6 The staff performance has been excellent showing a willingness to embrace change and trial new systems when called upon. Newport was the regional office that always volunteered to do any innovative pilot, including the fast track system, which has now been rolled out across the United Kingdom.
Conclusion 3.1 In conclusion, I would like to re-iterate my opposition to the closure of the Newport Passport Office on the grounds that it does not meet important tests of economic impact, financial savings or maintaining the UK- wide nature of the IPS. 3.2 I understand the need for the best value for money from our public services in difficult times but I believe this must be done sensitively with the aim of providing an equitable service across the UK. 8 November 2010
Written evidence submitted by Cllr Ed Townsend, Leader, Liberal Democrat Group, Newport City Council Summary I note that these proposals were prepared before the current round of budget pressures was identified. At the time this proposal was first raised, the then Minister rejected the proposal. However, I also note the need to ensure value for public money during the current period of reduced public spending. I believe that this can be achieved without the loss of frontline services from Newport, and present my arguments below. I write in the capacity as Leader of the Liberal Democrat group on Newport City Council—and refer also to the detail in the official Newport City Council submission, which I fully endorse. 1. I note that three hundred jobs could be lost in Newport if the decision is taken to close the site. The prime city centre location of the office means that there will likely be damaging second-tier effects on other shops and services in the city centre, which are regularly used by both the staff of the office and the many customers who use the site every day. 2. Compared to other locations served by passport offices in the UK, Newport’s economy is relatively more deprived. However, Newport generally—and the city centre in particular—is currently going through a period of co-ordinated regeneration. The loss of a significant employer from the city centre with the additional knock- on effects has the potential to damage the excellent work that is currently being undertaken to improve the economy of the city. 3. I accept the need for the UK government to ensure value for public money in all of its operations. However, ensuring value for money should not be achieved at the expense of the delivery of services. Given the relatively lower costs of operating from Newport compared to other parts of the UK, I believe that Newport is in a prime location to deliver an excellent service and ensure value for public money at the same time. Continuing to operate from Newport also chimes well with the general trend of decentralising government functions from London to other parts of the UK. Welsh Affairs Committee: Evidence Ev 45
4. I note that the decision to close the Newport office will leave Wales as the only nation of the UK without its own passport office, and also the only nation in the EU without its own passport office. The current geographical spread of passport offices suggests that the Newport office is well placed to serve people not only in Wales, but also across the south west of England and parts of the Midlands as well. 5. I believe that there is a unique case for maintaining a passport office in Newport, based on the need to provide Welsh language services. Unlike other parts of the UK, Wales has a need for a system which serves customers in two languages. If the Newport office were to be closed, then this could potentially result in the loss of Welsh language provision completely, or result in one of the other offices having to provide that function. It is not desirable to see the end of Welsh language provision and it is not practical for one of the other passport offices to provide the service. 6. With these arguments in mind, I believe that the Newport office has a strong case to remain open and to continue providing the excellent services that people have come to expect. 8 November 2010
Written evidence submitted by the Welsh Liberal Democrats Background 1.1 The Welsh Liberal Democrats noted with concern the announcement on the 8 October 2010 that the Identity and Passport Service was intending to close its office in Newport and have opposed this decision from the outset. 1.2 The Welsh Liberal Democrat group in the National Assembly has tabled a Statement of Opinion to encourage members of the National Assembly to express their opposition to the proposed closure. The party has also formally expressed its wish that “the proposal to close the Newport Passport office to be reversed”. (See Appendices one and two).14 1.3 Likewise, Newport City Council, on which Welsh Liberal Democrats form part of the administration, is opposed to the closure of the Newport Passport Office and the estimated loss of 300 jobs.
Arguments 2.1 Whilst we acknowledge that there are many arguments against the closure of the Newport Passport Office, we wish to particularly highlight three; the impact on the Newport economy, the potential for greater savings to the IPS from other courses of action and the impact on the image of Wales as a nation. 2.2 Firstly, we note that three hundred jobs will be lost in Newport as a result of this decision. Compared to the location of other Passport Offices, Newport is relatively a more deprived area and we believe that it will have more of an impact on the local economy than elsewhere. For example, Newport was recently rated as the 28th most competitive city in the United Kingdom, despite receiving a significant boost in the last year.15 We believe that therefore there will be a bigger impact on the local economy by the closure of the Newport Office than reductions in staffing numbers elsewhere. Welsh Liberal Democrats fully support efforts to reduce the deficit but believe that the cost of doing so should be borne equitably by all part of the UK. We do not believe that this decision by the IPS would achieve that responsibility. 2.3 Secondly, we note that there has been a drive over several decades to decentralise many government departments outside of areas with expensive land and labour costs. This has two benefits; firstly in cutting costs and secondly in spreading the mechanisms of Governmetn across many parts of the UK. We believe that the costs of owning or renting in Newport are substantially lower than in other parts of the country and that the city must therefore be considered as a lower-cost alternative to other areas of the country. We do not concur with the IPS that this represents the best value closure for the Service. 2.4 Thirdly, we note that this decision will leave Wales as the only nation in Europe without its own Passport Office. This will not only disadvantage many millions of people from Wales, and the south-west of England, who are able to use this office but will suggest that the IPS is not willing to spread its work across all of the United Kingdom. The Identity and Passport Service is a retained matter, and, as its work relates the whole of the United Kingdom, its business operations should seek to reflect that. Closure of the Newport Passport Office would be a retrograde step. It would also disadvantage Wales by reducing its visibility across the United Kingdom and the world.
Conclusion 3.1 In conclusion, we would like to re-iterate our formal opposition to the closure of the the Newport Passport Office on the grounds that it does not meet important tests of economic impact, financial savings or maintaining the UK-wide nature of the IPS. 14 Not printed. 15 Robert Huggins and Piers Thompson, UK Competitiveness Index 2010, (UWIC 2010). Ev 46 Welsh Affairs Committee: Evidence
3.2 We would strongly urge the IPS to reverse its decision to close the Newport Passport Office. 8 November 2010
Supplementary written evidence submitted by PCS
In this paper, we wish to submit some further evidence and to comment on some of the claims made by Identity & Passport Service (IPS) management at the Welsh Affairs Select Committee evidence session held on 10 November 2010.
On Consultation
1. In an attempt to dismiss our complaints about inadequate consultation, Sarah Rapson states in her answer to Q64 that IPS took part in informal meetings with PCS; we also understand that Damian Green has recently provided minutes of a meeting with the union that took place on 28 September. IPS management seem to be suggesting that PCS was prepared to consider accepting office closures, which is not the case. We did indeed take part in informal meetings, during which the closure of the Newport office was discussed. What IPS management has not made clear, however, is that throughout those meetings PCS maintained a stance of implacable opposition to office closures and redundancies in any office within IPS—and, indeed, to cuts in jobs and services in any government department, in accordance with PCS national policy. Sarah Rapson also told the Committee that PCS had seen the full multi-criteria analysis prior to formal consultation but although some union reps were shown the analysis, this was not the version that was subsequently used and management were still showing us the old version several weeks after the formal consultation started.
2. We wish to reiterate our dissatisfaction with IPS management’s drip-drip approach to the provision of information during the formal consultation period.
Documents Requested by PCS and by the Committee
3. PCS told the Committee that a document on the Application Processing Network Analysis Direction of Travel had been shown to PCS in August and then withdrawn. IPS management has now belatedly provided a copy of this document to the committee and to PCS, after having been asked to do so by the Committee Chair. The document raises more questions than it answers, however. The Minister has stated in his further submission that the document is, in effect, redundant and did not provide the basis for any decisions subsequently made by himself or IPS. We find this puzzling, since the document was produced on 25 August and the ministerial submission on the Newport office was submitted shortly afterwards, on 13 September. Our understanding was always that the submission had been shaped by the Direction of Travel document, yet if the latter was effectively torn up between 25 August and 13 September, as the Minister now claims, then it remains unclear what analysis formed the basis of the submission.
4. The document effectively argues that staff in IPS will increasingly become surplus to requirements due to a rolling programme of “operational efficiencies” running up to 2016, of which the closure of the Newport office is a part (see, in particular, the graph on page five of the document). Management have since informed us, however, that many of the planned “operational improvements” mentioned in the document have now been abandoned. For example: the projected future number of on-line applications has now been brought down to 45% and, most importantly, the project of “automatic” simple renewals and extensions has been abandoned. All that remains are some changes to Telephone Enquiry Bureau work and printing work, along with what is called in the document “operational excellence”. This latter involves new working practices modelled on “lean processing” (on which we comment further below). It should be noted, however, that this is only at the trial stage and could not be relied upon to deliver efficiencies.
5. There are currently only 50 surplus staff within IPS, according to management, and it is only through the implementation of “operational improvements” that the agency will supposedly find itself over-capacity by a margin of 300 staff. If, as we are now told, some of the most significant “operational improvements” will not happen after all, it is difficult to believe that 300 people will be surplus by the end of next year and the rationale for the Newport office closure disappears.
6. In summary, the Direction of Travel document and the minister’s comments on it demonstrate that IPS management has little basis for its prediction of 300 surplus staff by 2011, other than citing “operational improvements” that are only at the trial stage and will, we believe, deliver minimal efficiencies; and that if this document was abandoned, as we are now told, then IPS management’s decision-making has been even more haphazard than it already appeared, with no clear basis for the ministerial submission that led to the office closure decision. One might conclude that IPS made their decision and then worked backwards from that position, producing arguments to provide ex post facto justification. Welsh Affairs Committee: Evidence Ev 47
Transparency Cancellations of Interviews 7. In response to Q93, the Minister stated that information about how many customers had failed to turn up for interview had not been withheld. This is simply false: after the Committee’s evidence session, we gave a document to members of the Committee which demonstrates beyond doubt that that information has been withheld. The Minister has stated that some of this information is published as a matter of course—in which case, it seems incomprehensible that management should redact such information in communications with the union. 8. In his letter to the committee of 15 November 2010 the Minister states that 352 applications to the Newport office resulted in cancellations of interviews, yet our point was about the effectiveness of the Interview Office Network—rather than the Newport office—in deterring fraud and figures for interview cancellations within the Network have still not been presented either to PCS or to the Committee.
Intimidation of staff who comment publicly 9. Newport office staff have received letters from management containing an implied threat of disciplinary action, in relation to interviews that some of them had given to the media. Yet these interviews referred only to the personal circumstances of the staff in question and their concerns for the future if the office should be closed. We consider this to be heavy-handed and intimidating.
Welsh Language provision 10. Throughout their evidence, IPS management maintained that there had been no intention or consideration of removing the Welsh Language Application facility in IPS. We have now, however, presented Committee members with the draft Equality Impact Assessment, which clearly shows that IPS management had been giving consideration to withdrawing the facility. IPS may now backtrack on this but the draft document demonstrates that they had considered breaching the terms of the Welsh Language Act—or, at least, trying to see how they can “get around” it. PCS reps in Newport have raised with management our concern that the provision of a face-to-face Welsh language service is already barely adequate and non-existent on Saturdays, only to be told that this does not mean there is any need to improve the service in future.
Service to Wales and Newport 11. In response to several questions, the Minister and Sarah Rapson both stressed that there would be no change to the service to South Wales and the South-West of England. We remain highly sceptical about this. As Jessica Morden implied in asking Q120, it is very doubtful whether counter staff, security, fraud detection, processing, printing and the Welsh Language Service could all still be provided if there were a mere 30Ð35 jobs in Newport—especially when it is intended that the office should also conduct interviews of first time applicants. We believe that IPS management is cutting costs in preference to protecting and sustaining an award-winning service.
Other Comments 12. We have continuing concerns about the effects of “efficiency savings” on service provision, especially in relation to public safety. For example, “Operation Excellence” (referred to in paragraph 5 above), which is being trialled in the Durham office, against the objections of PCS, involves stripping back-office processing work of any processes deemed to be unnecessary, such as the examination of the counter-signatory section of the application form. The potential consequences of this are demonstrated by the concerns already raised by staff in the Interview Office Network (ION) regarding the introduction by management of a “Risky Decisions” log. This is to be completed following a passport interview, to record instances where a decision to fail an applicant cannot be justified under current policy but the interviewer or office manager is uneasy about the “pass” decision because of the limited quantity or quality of data available on the applicant, on which to base their decision. IPS acknowledge that such insufficient or poor-quality data might be a consequence of previous efficiency savings, such as the withdrawal of counter-signatory examination, or of a failure to act on warnings flagged up by the Personal Identity Process. This demonstrates that cut-backs in the application processing offices can adversely affect the quality of information available to interview office staff, to the extent that they cannot perform their duties to their own satisfaction. With identity theft in the UK estimated to cost £2.7 billion, the Government should be investing in services that protect identity yet, by introducing this log, IPS appear to be saying that making risky decisions is part of a passport interviewer’s job. This represents the abandonment of the concerns that led to the ION’s establishment and suggests that IPS is gambling with the safety of the public. 13. In conclusion, PCS believes that the comments provided above further substantiate the concerns that we have already put before the Committee about the proposal to close the Newport office and the wider “efficiency” agenda within IPS. November 2010 Ev 48 Welsh Affairs Committee: Evidence
Supplementary written evidence submitted by the Home Office At the Welsh Affairs Committee evidence session into the future of the Newport passport office, held on 10 November, I undertook to write to you providing additional background documentation and information on a range of issues; specifically: — Details of any meetings between the Identity and Passport Service (IPS) and the Public and Commercial Services (PCS) union ahead of the formal consultation and release of the Direction of Travel document referred to by PCS; — The claim that IPS will deliver no savings as a result of closing Newport application processing centre or introducing new passport application systems (this claim was made with reference to a conversation between the PCS and an IPS manager—Louise Horton); — Information on the provision of Welsh language services in the Equalities Impact Assessment; — Information on the number of passport applications which are withdrawn once the customer is advised that an identity assurance interview is required, and the number of detected frauds; and — My level of confidence that 30Ð45 jobs are sufficient to maintain customer services in Newport. This letter sets out my detailed response to these points and I have enclosed copies of all relevant documents.
IPS Meetings with PCS As I and the Chief Executive of IPS, Sarah Rapson, made clear to the Committee, IPS has been talking to the PCS about the need to restructure passport operations for some time. These discussions have been on an informal basis and have allowed the union to shape IPS’s proposals in advance of any formal, time- limited consultation. IPS senior managers met with PCS representatives on 20 and 27 July, 26 and 31 August, and 7, 14 and 28 September. During these meetings, PCS were asked to comment on the specific criteria used to assess which application processing centre should close, were shown details of the developing analysis and were informed of IPS’s plan to make a full announcement on the 14 October. I do not recognise the claim made by PCS that IPS’s proposals came as a “bolt from the blue”. The minutes of 28 September meeting, which I have provided at Appendix 1, clearly show that PCS was engaged well in advance of our planned announcement; indeed they had requested that IPS staff be given time off to discuss the proposals with PCS representatives. It was during the meeting on 26 August that IPS officials shared the Direction of Travel document of which the Committee has requested a copy. This document, correctly titled “Application Processing Network Analysis”, is an informal document compiled by a junior manager which sets out their initial thinking. It is not an options paper, it did not inform IPS’s further analysis, no decisions were made based on it, neither I nor the IPS Chief Executive received a copy and it did not play any part in the recommendations that were put to me or the IPS Chief Executive. It was shown to PCS in August as nothing more than a working draft which illustrated some of the thinking and considerations that junior managers had been developing—it is clearly marked “draft Restricted”. I have already released in full to PCS and the Committee the final methodology, data, analysis and conclusions the IPS Management Board used to make their recommendation to me of 13 September. This is the authoritative assessment used to determine the Newport proposal which takes into account a range of additional factors and the most up to date data. I do not believe that releasing this document serves any constructive purpose. Nevertheless, on 10 November IPS provided PCS with a copy in good faith as part of their commitment to a transparent and open consultation. I have also included a copy at Appendix 2 as requested by the Committee. I trust you will bear in mind the points I have made when you review it.
Newport and Passport Application System Savings The Committee also asked for clarification as to whether closing the Newport office would lead to any savings for IPS, and this was specifically linked to a claim that IPS’s plans to upgrade its online services now meant that no savings could be made. As I have outlined, IPS is in the process of replacing its current passport application software with a newer, more robust system provided by Computer Sciences Corporation (CSC). I can confirm that the introduction of this new passport application system will deliver savings. IPS has renegotiated its contract with CSC over the past two months and the new contract represents a reduction in the contract value of £94.5 million and a net reduction in the cost of services to IPS of £17.6 million over the lifetime of the contract. The additional functionality provided by this new system will allow IPS to change the way customer applications and telephone queries are handled and deliver more services online; which together will result in productivity gains equivalent to 129 Full-Time Equivalents (FTE). Welsh Affairs Committee: Evidence Ev 49
With regard to the specific proposal to close Newport, IPS estimates that this will save £24 million by 2015. Added to the £26 million IPS will save through changes to its Interview Office Network, the Agency estimates that a total £50 million saving will be achieved by 2015.
Equality Impact Assessment
The Equality Impact Assessment (EIA) on the proposed closure of the Newport Office is a draft document that will not be completed until formal consultation has been concluded. IPS has shared the draft EIA with PCS as part of meaningful consultation, to allow PCS to contribute to the development of the EIA. As well as helping public bodies meet their statutory duties on equality, the EIA provides important checks and balances in deciding between policy options.
The reference highlighted by the Committee, specifically whether the Welsh language provision can be removed, is contained in section 4 of the EIA. This section reflects potential impacts that have or may be identified through stakeholder engagement and offers potential mitigations for or against the identified impacts. Therefore, the reference regarding Welsh language services and in particular the potential processing of these applications in other Regional Offices has been identified as an impact, which requires IPS to consider what mitigation it can offer. IPS has never considered removing Welsh language services and this will, of course, be reflected in the final EIA.
Interview Cancellations
As I said in my evidence to the Committee, the number of identity assurance interviews that are booked where the applicant fails to attend is already a matter of public record. Several Parliamentary Questions have been asked on this topic including: Parliamentary Question 313501 (which I asked) and House of Lords Questions 2145 and 2507.
In summary, between January 2008 and September 2010, a total of 3,545 passport applications were withdrawn once the applicant learnt of the requirement for an interview. Of these, 352 were applications dealt with by the Newport Regional Office.
Over the same period, five applications were refused as a direct result of a confirmation of identity interview; one in 2008, two in 2009 and two in 2010.
Customer Service Centre Jobs
You also asked for further information on the provision of counter services in the new Customer Service Centre. Based on the experience gained in Belfast and Glasgow, IPS estimates that a total of 24.3 Full-Time Equivalents (FTE) will be required to provide the existing levels of counter service for approximately 50,000 applicants per year and up to 10,000 identity assurance interviews. A further 7.5 FTE will be needed to provide application processing, examination and printing of premium (same day) passports.
This results in a total requirement of 31.9 FTE which, on a 1:1 basis, would result in 32 people being employed in the Customer Service Centre. This is the basis for IPS’s lower estimate. However, given that the current Newport office employs around 30% part-time workers, it is sensible to assume that these 31.9 FTE will represent a higher number of staff. Using the current ratio, 31.9 FTE would equate to around 41 staff. IPS then included a small amount of headroom (up to four additional jobs) to allow for any changes or additions that may arise as part of the ongoing consultation with the Trade Unions. This resulted in the range quoted to the Committee of between 30 and 45 jobs.
I hope this letter answers all the specific points raised by the Committee and I look forward to receiving a copy of the Committee’s report.
I am copying this letter to members of the Committee, the IPS Chief Executive and the Public and Commercial Services Union. Damian Green MP Minister of State for Immigration November 2010 Ev 50 Welsh Affairs Committee: Evidence
APPENDIX 1 MINUTES OF 28 SEPTEMBER 2010 IPS-PCS MEETING Names of individuals present at this meeting have been redacted. [IPS] refers to an IPS official; [PCS] refers to a PCS representative. PCS Informal Consultation Meeting 28 September 2010 1. Introductions Management side: [NAMES REDACTED] PCS: [NAMES REDACTED]
2. Update on Meetings with Minister [IPS] stated that he was looking for two specific actions from the meeting. 1. An agreement from PCS about working together on Communications. 2. An agreement from PCS to work together to mitigate against any adverse impact on our people with compulsory redundancy as a last resort. [PCS] replied that: 1. PCS would be happy to enter into an agreement to share communications and provide advance notice of these communications on both sides. However, it was unlikely that PCS could agree to joint communications. 2. An agreement on Redundancy avoidance should be linked to the Cabinet Office protocols and that this issue is better discussed during the formal consultation. [IPS] discussed the meetings with the Minister and provided an update regarding the current progress of the submission. [IPS] stated that the Minister understood the IPS issues and was equally concerned about the impact on staff, quality of service and retaining our hard earned reputation. The Minister has vigorously questioned the recommendations and is minded to accept the proposal to close Newport and retain 23 ION Offices along with a peripatetic model and VIS. [IPS] also explained that the Minister also wished to explore a counter provision in Newport. [IPS] then stated that communications were being planned on that basis with an anticipated release date of 14 October. [PCS] outlined the PCS position on job cuts and that their red lines may have to be redrawn once the national PCS position had been clarified. Action point: [PCS] also requested a copy of the Ministerial submission and hard data prior to formal consultation beginning, which was agreed.
3. Announcement Planning [IPS] shared the outline communications plan and reiterated the target date of 14 October. She also explained that the Minister needed to confirm this, which would be conveyed to PCS once known. [IPS] explained that IPS would need to shut off interviews and counter slots for 14 October, which would be done later in the week. PYA staff will be sent recorded letters and invited to attend briefings in their Regional Office. [IPS] explained that it is intended to brief all operations staff at the same time and that this will be timed so that staff are being told simultaneously along with the Minister making a statement to Parliament. All announcements will be scripted and the affected offices will have contact with an ED or the CEO. All staff briefings will be supported by an HR Business Partner. Action point: [PCS] requested time off to be given to staff to discuss the announcement with PCS, which Management agreed to take away and consider. Action point: It was agreed to share the Leadership Forum briefing regarding the shutting down of bookings with PCS. Action point: It was agreed to share advanced copies of communications and briefings with PCS ahead of 14 October.
4. ION Proposals [IPS] discussed issues regarding two pieces of work, which were the restructuring of ION, particularly around the 23 locations, the peripatetic options and VIS. [IPS] also discussed the creation of the Customer Service Centres too. [PCS] expressed PCS concerns regarding JEGS, T&S, peripatetic options, sharing of premises with OGDs and other Public Sector sites and potential equal pay issues. Welsh Affairs Committee: Evidence Ev 51
Action point: [IPS] to arrange a meeting between [IPS] and PCS. Action point: [IPS] to review previous Customer Service Centre communications and recommunicate as appropriate.
5. Preparing for Formal Consultation Formal consultation would begin with PCS on Tuesday 19 October with the regular Tuesday meetings forming the spine of the consultation with additional meetings as necessary. [IPS] would also act as a coordinator for Operations. [IPS] explained that there were three distinct projects going on as part of an overarching restructuring programme of work. The projects are: 1. Restructuring. 2. Customer Service Network. 3. Application Processing Network.
6. AOB Action point: [IPS] to respond to GRO issue. Action point: [IPS] to arrange meetings over pay. [IPS] advised PCS that Home Office will be consulting with HOTUS in the next couple of days regarding the new policy on redundancy and redeployment.
APPENDIX 2 APPLICATION PROCESSING NETWORK ANALYSIS
Application Processing Network Analysis
Draft Date 25 August 2010 Version 0.1 Presented to 26th August 2010 RESTRICTED DRAFT – NUMBERED COPY 1 OF X
Ev 52 Welsh Affairs Committee: Evidence
The Model and Underlying Assumptions
We used Multi Criteria Analysis (MCA) to establish objectively which office provided the best option for closure. The criteria fall into groups of Cost, Affordability, Estates, People, Customers & Partners and Performance. These were agreed with relevant stakeholders in the regions, Finance and Strategy. The criteria were given equal weights.
Assumptions • In scenarios where Durham is retained,Draft it will move to a smaller office (ca. 4,500 square metres with ~500 workstations in total). This requires an average attrition rate in Durham of 4% annually to fit staff into the space. • All scenarios include backfill (where required) to the level of operational staff to meet demand (after efficiency savings and use of overtime is taken into account). • We will be able to get agreement from Cabinet Office to extend leases at the break points where offices are to be retained. • Any move will not require capital expenditure by IPS (although it will result in annual rent increase to repay the landlord’s cost in fit-out). • Moving costs for IPS will be £0.75m resourceDRAFT split across two FY £250k in yr 1 & £500k in the year that we move premises, all as resource cost in procurement and moving. • We will be able to recruit in late 2013 or will have automation of renewals, to deal with expected increases in volumes for 2014 & 2015 • Essential HQ functions move into DRAFTnearby Government estate with no fit-out and minimal moving costs.
Identity and Passport Service RESTRICTED DRAFT 2
Outcomes – The steps
Running the MCA model shows that, if the sole consideration is CSR expenditure, then the office that we should close is Peterborough in its entirety. Despite high one off costs, this option has a good NPV and a low ongoing cost profile.
One- Total off CSR Capital Draft costs Spend Required Rank Office Score (£k) (£k) NPV (£k) 1 Close Peterborough 87 9,750 182,781 69,177 £0 2 Close Belfast 85 3,148 201,122 27,097 £0 3 Close Durham 84 9,332 183,906 70,010 £0 4 Close Newport 83 4,368 191,652 40,385 £0 5 Close Liverpool DRAFT 82 9,497 184,280 62,066 £0
DRAFT
Identity and Passport Service RESTRICTED DRAFT 3 Welsh Affairs Committee: Evidence Ev 53
Outcomes – The Operational Capacity Criterion
Without understanding FTE requirements against forecast demand, the model does not directly take into account the operational feasibility of closing a particular office. The table below shows the requirement for back-filling recruitment at peak demand should each of the offices be closed.
Estimated Backfill Requirements This indicates that the closure Draft of Belfast would leave IPS
with a remaining surplus of 2012/13 2013/14 155 staff at peak 2013/14 Belfast -79 -155 after efficiency savings have Durham 311 235 been implemented Liverpool 73 -3 Newport -6 -48 Peterborough 182 140 DRAFT
DRAFT This indicates that closing Peterborough would require a back-filling recruitment of 140 at peak 2014/14
Identity and Passport Service RESTRICTED DRAFT 4
How the efficiency programmes contribute
to staffing requirement against demand
Service Delivery Forward Capacity Requirement 1,900
Demand + FCO, 1,803 Demand + FCO, 1,810 1,800 Collectives Collectives LSR, 40 LSR, 40 ROPE efficiencies, 20 Actuals, Jun 2010, 1,710 ROPE efficiencies, 20 1,700 Demand, 1,677 Demand + FCO, 1,677 TEB changes, 60 TEB changes, 60 Collectives Collectives LSR, 40 Demand, 1,620 LSR, 40 Online, 72 Online, 75 ROPE efficiencies, 20 Collectives ROPE efficiencies, 20 1,600 D LSR, 40 TEB changes, 60 TEB changes, 60 Operational Excellence, 50 Operational Excellence, 50 ROPE efficiencies, 20 Overtime, 31 Overtime, 31 Online, 50 TEB changes,r 60 Online, 69 1,500 a Online, 66 Operational Excellence, 50 Overtime, 36 f T Belfast t 1,400 Operational Excellence, 50 F Overtime, 32 Post Improvement - OT, 1,411 A Overtime, 34 Newport R Automate Adult Renewals, 305 Post ImprovementD - OT, 1,340 Automate Adult Renewals, 130 Automate Adult Renewals, 317 1,300 T Liverpool F A Post Improvement - OT, 1,266 1,200 R Post Improvement - OT, 1,215 D Post Improvement - OT, 1,207
FTE required to meet forecast demand Peterboro'
1,100
Durham 1,000 2011/12 2012/13 2013/14 2014/15 2015/16 Financial Year Identity and Passport Service RESTRICTED DRAFT 5
Ev 54 Welsh Affairs Committee: Evidence
Outcomes – the backfilling requirement criterion
One-off Total CSR Total FTE Backfill Rank Office Score costs (£k) Spend (£k) NPV (£k) in Region Needed (FTE) 1 Close Newport RO 91 6,626 234,549 49,259 313 0 2 Close Peterborough RO 89 8,626 229,853 42,546 463 182 3 Close Liverpool RO 86 9,570 225,275 48,703 363 73 4 Close Belfast RO 86 7,400 242,958 26,042 156 0 5 Close Durham RO 85 10,047 228,360 32,820 629 311
• Newport is a low risk option asDraft it does not need to backfill staff. However it is a smaller building and does not quite realise the size of estates reduction that is required. This would remove 19% of current estates space. There are currently 287 FTE (327 staff) in Newport plus 26 HQ FTE.
• Peterborough is a larger office with more space to remove and generates a better annual saving than Newport. It can only be done without operational risk (i.e. we will have insufficient staff to meet demand) if there is backfill recruitmentDRAFT elsewhere. This removes 24% of current estates space. There are currently 425 FTE (486 staff) in Peterborough plus around 38 HQ FTE. DRAFT The options for closure are either Newport or Peterborough, depending on the appetites for risk and backfilling. On balance Service Delivery would prefer to take a prudent approach about removing estates capacity at this time. Therefore we would recommend closing Newport with a view to moving to a smaller Durham office in future to reduce estates capacity.
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Customer Impacts
• If as per the modelling assumptions there is no longer a counter provision the current options both impact the provision of Fast-track, Premium and Interviews for customers who previously would have been served at these sites. • Detailed insight work is currently underway to understand the displacement effects of this. Clearly the Peterborough option - as a very busy counter - would see customers displaced toDraft London which would have more limited capacity to accommodate this additional work, particularly at peak. The knock-on effects on London would therefore also need to be understood. • Newport – although a less busy counter – is expected to see customers displaced to either Liverpool or London. • The Customer Service NetworkDRAFT modelling and strategy would need to be refined to reflect any decisions regarding Regional Office closures and resulting changes in counter provisions. • Although we have modelledDRAFT on the basis of not having counters, this is not a confirmed recommendation and operationally it may be found necessary to retain counters or an alternative customer service provision
Identity and Passport Service RESTRICTED DRAFT 7 Welsh Affairs Committee: Evidence Ev 55
APPENDIX 3 CURRENT & PLANNED OPERATIONAL EFFICIENCIES 2010/11 2011/12 2012/13 2013/14 Passport Demand 5,308,788 5,334,047 5,163,840 5,209,667
Initiatives 2010/11 2011/12 2012/13 2013/14 Overtime 36 36 36 Collectives 10 10 10 10 LSR 40 40 40 TEB changes 60 60 ROPE efficiencies 20 20 20 Operational Excellence 50 Online 66 69 Removal of ID Cards 69 69 69 69 Total Improvement 79 175 301 354
Initiatives Operational overtime, based on 2.5% of examiners Overtime working up to 10 days overtime p/a Policy decision to remove the provision of collective Collectives passports service Policy and operational process change whereby simplifying the Lost/Stolen/Replacement process saving examination time. A project is currently LSR ongoing to deliver this.
Process change to the way customer queries are handled. Calls are received by Tele Performance and call back requests passed to IPS TEBs. Efficiencies are delivered through better staff utilisation - made TEB changes possible by TCE system changes New ROPE printing equipment and demand balancing ROPE efficiencies - delivered through NPP programme
Operations driven, small local projects based on Lean Operational Excellence principles to deliver increased operational efficiency The new online channel presents cleaner work for examiners and automatic checking of frequent error fields (e.g. automated postcode validation). This is Online delivered through the TCE programme The cancellation of the ID Card scheme left an Removal of ID Cards overcapacity of 69FTE Ev 56 Welsh Affairs Committee: Evidence
Supplementary written evidence submitted by Newport City Council Letter to Damian Green MP, Minister for Immigration, Home Office from Councillor Matthew Evans, Leader of the Council, Newport City Council When I gave evidence to the recent hearing of the Parliamentary Welsh Affairs Committee in which I highlighted key areas of concern, I had hoped for greater levels of transparency from IPS as a result of the Committee’s deliberations. I regret, however, that we are still receiving only very limited levels of cooperation in our efforts to fully understand the processes being followed by IPS. It is important that the rationale for the proposed closure and the assessment methodologies being adopted are fully articulated by IPS and understood by all parties, otherwise the lasting impression will be that key considerations have not been taken into account and that unsafe and inaccurate conclusions have been reached. This is so important, given that a decision to close, or substantially down scale, the IPS presence here will have such a devastating impact on the future prospects for our City. Clearly, one of my principal concerns is the social and economic impact of the proposed job losses. A significant number of Newport Passport Office staff live within the City of Newport, where strenuous efforts are already being made to deal with some of the worst community deprivation in Wales. Other staff live in our adjoining local authorities, towns and communities, which are also suffering their own severe challenges in addressing both economic and social deprivation. With the current austerity measures taking hold and reducing recruitment capacity across both the public and private sectors in Wales, it is highly unlikely that the 250+ affected IPS individuals will find appropriate alternative skilled employment within the area, adding to an already over-burdened UK welfare benefits system. The proposed closure/part-closure will also significantly affect the reputation and economy of Newport’s City centre. Wales’ only Urban Regeneration Company, Newport Unlimited, was established in 2003 to help turn the city’s economy around following thousands of job losses in the area. Following a much needed commitment by public sector partners over the past seven years, aimed at bringing in future private sector investment, our City’s economy is now very delicately balanced. Important steps have been taken towards creating a more self sustaining economy for Newport, but we have not been immune to the economic downturn. Securing and retaining investment and employment that reinforces the heart of the City is our absolute top priority. The retention of the Passport Office is therefore all the more important when considering the challenging process that we have embarked upon to secure a private sector partner to deliver a significant and pivotal retail development in the centre of Newport. A decision to close or substantially reduce the scale of the Passport Office at this stage will not only discourage retailers and developers from considering Newport as a viable option, but will also send out negative messages to other potential business investors who may wish to consider Newport in the coming years. So significant are our concerns about the robustness of the ‘Full Data Package’ provided to justify the rationale for the Newport closure, that we have taken the decision to commission specialist economic analysts Aecom to undertake an independent assessment of the IPS material. This work is still in progress, but has very importantly identified a number of key issues so far which cast serious doubt on the conclusions reached by the IPS. The most serious concerns that I would wish to draw your attention to are; — The failure of IPS to provide a detailed cost-benefit analysis. — The limited range of options or scenarios that have been analysed. — Fundamental inconsistencies in the criteria weightings which have been applied. — The apparent lack of sensitivity testing.
Detailed Cost Benefit Analysis The IPS Full Data Package indicates that a Multi-Criteria Analysis approach has been adopted but only examines the internal costs of office closure from a narrow perspective. It does not report any detailed cost benefit analysis to show the overall impacts of proposed changes, for example local social & economic impact. The Treasury Green Book is clear that Multi Criteria Analysis should not be a substitute for Cost Benefit Analysis.
Limited Range of Options The Treasury Green Book is clear about the process of selecting and testing options and the need for it to be wide-ranging, but this approach does not seem to have been followed completely in the IPS analysis. The objective of the IPS analysis appears to focus on the single purpose of “closure” and therefore only a limited range of scenarios or options have been examined. In addition, the options that are carried forward do not include a “do-nothing” scenario. Alternative options such as reducing excess capacity across all centres are also not carried forward in order to see if alternative options might be found with a lower overall cost to society. Reference is made to a partial closure option being discarded at an earlier stage of analysis. However, the headline costs and benefits of this option which led to this decision are not expanded on in detail in the note. Welsh Affairs Committee: Evidence Ev 57
Arguments are mounted to suggest that this option is not feasible. However, paragraph 7.6 suggests the Durham option is also not feasible and yet it is included in the short-listing. This runs counter to the Green Book principles. The inconsistencies in defining the options and the narrow range of scenarios examined continues to leave doubts in the veracity and objectivity of the option appraisal process and, therefore, confidence that the selected option truly demonstrates value for money to the public purse.
Inconsistencies in Criteria Weightings There appear to be internal inconsistencies in the presentation of the approach taken to weighting in the IPS Full Data Package. It is not clear that equal weighting is given to each of the criteria as there are in fact 20 rather than six criteria which contribute to the analysis, thus potentially skewing the results. Greater clarity is needed to ratify the range of criteria adopted and more explanation as to the basis of weighting the criteria.
No Sensitivity Testing Sensitivity tests are needed to determine how much the option analysis may be affected by different weighting assumptions. IPS have suggested that the result of their assessments gives a “clear view”— recommending the Newport Passport Office for closure. The IPS view appears, however, to be based on only a very small margin of tolerance, with Newport ranking only two points above Peterborough and six points above Durham, out of an overall total potential score of 100. I am sure you will agree that it is important for all of us to work together to ensure that when a final decision is made about the Passport Office in Newport that it is based on robust analysis which can be reported clearly. It is also important that the decision minimises what might be seen as unintended consequences that would be so detrimental to the economy of Newport. December 2010
Written evidence submitted by the Identity and Passport Service There are three areas of suggested factual inaccuracies in the oral evidence provided by PCS on Wednesday 10 November 2010: — In response to Question 3, PCS indicated that the (IPS) “Chief Executive, Sarah Rapson, went down on the Friday (8 October 2010) to the office in Newport and made an announcement to staff then”. Sarah Rapson was not in Newport on Friday 8 October 2010. The announcement was made by the Regional Manager and the Newport Leadership Team. — On question 16, PCS indicated that the only point of access to passport facilities in Wales would be the customer service centre at Newport. IPS had previously informed PCS that this was not the case. — In response to question 27, PCS indicated that IPS had provided conflicting figures on the number of posts at the customer service centre at Newport. IPS has consistently indicated that up to 45 posts would be retained, including part time working. Your email also asked for confirmation that the formal consultation period would end on 19 January. As you are aware, Ministers have agreed to extend the consultation period and to do so by two months until the 18 March 2011. This is in response to requests form a number of sources and Ministers are keen to ensure that respondents have sufficient time to prepare and submit their comments. The Committee Chair will be formally notified of the extended period. You have received earlier correspondence from the Minister on claims by PCS that an IPS manager had indicated that no savings would be made as a result of closing the Newport passport application processing centre. Alan Brown Deputy Director, Policy January 2011
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