§ Mr. Peter L. Pike (Burnley)
I am glad to have the opportunity to raise this important issue. I hope that the Minister will be prepared to reconsider the proposal to close Burnley valuation office. I first became concerned about the proposed closure in December 1995; the proposal was first made around May that year. I have become increasingly concerned about the matter this year, partly because the decision was becoming imminent. Indeed, the decision has now been taken and the Burnley office is set to close.
The Burnley valuation office is an important office, which has a staff of about 32 people. It serves my constituency, the borough of Burnley, Blackburn, Hyndburn, Ribble Valley, Rossendale and Pendle—an area of 500,000 people. It serves that area very well and is well respected, but it is due to close in March 1999. Although I shall specifically speak about the Burnley office, I recognise that some of the issues may apply to other proposed closures. I do not know the details of those other cases; I am particularly concerned with the Burnley office.
This morning, I received a fax that informed me that Veronica Lowe, the chief executive officer of the Valuation Office agency, surprisingly announced her resignation on Friday. She had been very much involved in overseeing the proposed changes. That announcement followed another one last week. Mr. Mike Jordan, the director of business resources, announced that he is to take early retirement in March 1998. He has masterminded—if that is the right word—the changes. The name of the programme of changes is Newvos—new valuation offices. Veronica Lowe's resignation was surprising because, only a few months ago, we were dealing with an acting chief executive officer, Mr. Peter Upton, who has since retired. Veronica Lowe had not held the post for all that long before Mr. Upton became the acting chief executive while she was off.
Having dealt with the issue through a fair amount of correspondence—I shall refer to some of it—I do not believe that the case has yet been made for the closure. It is my view that the Minister has been ill advised. Indeed, some people think she may have been misinformed. I felt that it was only right to call this debate to force the issues into the open and allow them to be scrutinised.
In May 1997, Mr. Varley, the then district valuer and valuation officer in Burnley, wrote to Mr. Upton, who was at that time director of operations. Incidentally, Mr. Varley has also retired. He was succeeded for a short time by Mr. Speight and subsequently succeeded by Mr. Borland, who had been the district valuer in Burnley some time previously. All the national and local staff changes are quite puzzling. I mention that particularly, because the way in which the staff are being moved around like pawns must be most disturbing for them and must introduce a certain inconsistency.
In his letter in May, Mr. Varley made a very detailed case for the Burnley office to remain open. He said:We were pleased to hear from Mike"—that is Mike Jordan, to whom I referred—that no final decision to close the Burnley office has been taken, and that it is recognised that Burnley is an 'extremely efficient office'. Mike Jordan's express wish that this efficiency be replicated nationwide is an essential element of our own thinking.306 Mr. Varley detailed why the Burnley office should remain open under the headings of cost effectiveness, customer service and business development. He said that, due to the 23 miles between Burnley and Preston, travel costs would substantially increase, as would the amount of non-productive time spent on case work. He referred to items such as office rental, which in Burnley is only 50 to 60 per cent. of the cost in Preston. Rents in Preston are higher because it is on the InterCity network and at a major convergence of the motorway network. He also pointed out that car parking is significantly cheaper in Burnley.
Mr. Upton replied on 25 July to the representations that I had made in the interim:The proposals for streamlining the Agency network of local valuation offices were detailed … in a letter of 19 July 1995He said that, on 10 May 1996, the Valuation Office's former chief executive, John Langford—yet another name which has come into the picture—wrote to me in response to the concerns that I had expressed at that stage. Mr. Upton continued:No final decision on implementing will be made before the views of all concerned have been carefully considered.Mr. Upton wrote to me again on 5 September:A consensus has been reached with the trades unions representing Valuation Office staff, and … will include the merger of the office that covers your constituency with adjoining offices.That two-page letter does not say what will happen to the Burnley office until appendix B, which I think is a strange way of going about things. The Burnley office will be merged into the Preston office. Preston will become a group office with satellite offices in Lancaster, Carlisle and Ulverston. Those three satellite offices are all in west Lancashire. The Burnley office covers east Lancashire, which is very different. As I said, Burnley is effectively a city of 500,000 people, although it is covered by six different local authorities.
On 25 September, I wrote to Mr. Upton and sent an almost identical letter to my hon. Friend the Financial Secretary. I made a number of points in favour of the reconsideration of the case:I do not believe closure and moving the office into extra space at Preston will save money. Office space at Preston is dearer than in Burnley. I understand staff in Burnley did put forward proposals on how money could be saved. Have these proposals been considered? … The service level at present is excellent, I feel it will be worse at Preston. It will certainly be less local and that is contrary to policy aims of the new Government.On coming into office, the Labour Government stressed the provision of services near the local people, wherever possible. I accept that that is not always possible, but we should aim for it.
My letter continued:It will also mean in the long run less job opportunities here"—in Burnley—as the job range is very narrow.North-east Lancashire, including the constituency of my hon. Friend the Member for Pendle (Mr. Prentice), who is in his place, is heavily dependent on manufacturing jobs. There is nothing wrong with that—indeed, I have worked in manufacturing myself—but we need a wider range of jobs. While the majority of employees of the valuation office will move to Preston, when they retire in future years the jobs will probably be filled by people from the west side of the county, not the east.
307 Burnley borough council's local taxation officer, Michael Frazer, wrote to me to express his concern. The council has pursued the issue for some time. He made an additional point about the impact on local government in east Lancashire, because all the local boroughs felt that they had received excellent service because the office was based in east Lancashire. The council wrote to me again on 13 October to make a further point:Consultation is currently taking place about the possibility of a Council Tax revaluation and future revaluations — If such revaluation becomes a reality, it appears that the Burnley office would have a crucial role to play in the process.I then consulted other Members of Parliament in the area. My hon. Friend the Member for Pendle had already expressed concern independently about the proposal and I know that my hon. Friend the Member for Hyndburn (Mr. Pope) and my right hon. Friend the Member for Blackburn (Mr. Straw) have also raised issues arising from the proposed closure. My hon. Friend the Financial Secretary wrote to me on 18 November:I am generally content with the thrust of the change proposals concerning improved service".She continued:A ballot of the Agency's Trades Union membership has now been conducted and the structure, based on 24 Groups over the country with a total of 85 offices, has been accepted.In the intervening period, I received several letters from Veronica Lowe and Michael Jordan, all of which I considered unsatisfactory. I wrote back on one occasion to say that I felt that they had responded inappropriately to issues raised by a Member of Parliament. Their letters had dodged questions about costs, which are crucial to the proposed closure of the Burnley office. They were also not prepared to answer questions about how much extra office space would be needed at Preston; what extra costs would be involved; or what the union vote really meant.
The latter question is important, because the union vote has been interpreted wrongly. I have received a letter from the Preston branch—the very office that will become a group office—which stated:the overwhelming number of the staff who work here"—in Preston—are appalled that Burnley office is to close down, indeed at a recent ballot on the office closure programme 90 per cent. of staff voted against the proposals.I then received a letter from a higher level in the Public Services, Tax and Commerce Union, Inland Revenue Group, which stated:Firstly the trades unions have not accepted the restructuring proposals, the ballot question asked members to 'acknowledge that the new VOA"—the Valuation Office—Group Structure will be implemented', and sought to allow national officials to continue negotiations on the many issues the restructuring has thrown up. That does not constitute acceptance.The union's claim is that the ballot was about whether—if the restructuring was forced on members—the union should be involved in discussions about what should then happen. It is realistic for the union to say that it wants to be involved, but that does not mean that it can be claimed that the union approves the change that will take place.
308 Many questions still have not been answered. What are the redundancy costs involved in closure, because some staff will not be able to move? How much new office space will be required in Preston and how much will it cost? What are the implications of additional travel costs? Has the fact that rent will have to be paid in Burnley until 31 December 1999, even though the building will not be used, been taken into account? Is it not a fact that savings of 21.6 per cent. have been made between 1995–96 and that it is planned to save a further 7 per cent. through productivity gains, not including the restructuring proposals?
The chief executive has gone. The person who proposed and masterminded the changes has also announced that he will go. Is not it now time to throw the proposals in the bin, reconsider the situation and decide on the right way forward? Even if other valuation offices must close, there is a good case for the Burnley office, which has provided such good service in the local area for so many years, to stay open to continue to provide that service.
§ The Financial Secretary to the Treasury (Dawn Primarolo)
I shall try to answer the points made by my hon. Friend the Member for Burnley (Mr. Pike), especially about the trade union, because it needs to make up its mind what it has agreed and what it has not. I shall return to that point later.
My hon. Friend knows the background to the introduction of the new office structure for the Valuation Office. He mentioned staff turnover, and I hope that he will accept my word, as a friend as well as a Minister, when I say that I cannot discuss the specific points that he made about staff. He mentioned the chief executive of the Valuation Office and her decision to resign last week. I can assure him that her resignation is not connected to the Newvos project.
My hon. Friend also referred to the project director and his intention to leave, which is an unconnected personal decision. I understand the point he makes about the apparent turnover of staff, but I assure him that that is not connected with this issue.
§ Dawn Primarolo
My hon. Friend is highlighting what may be the concerns of others, and I hope that my comments will help to calm things down during a difficult time for many members of staff.
I will not go over the background to the reorganisation, as my hon. Friend has—in exchanges of letters over the years—explained the origins of the proposals and their purpose. However, in terms of the Burnley case, he does not accept the purpose, which is to improve the quality and level of service, to make it more flexible, to respond to changing work loads and technologies and to ensure that the agency is well placed and has a firm footing for the future.
309 I turn to the question of the trade unions and the rethink for which my hon. Friend the Member for Burnley has asked. On my appointment, I met the management of the Valuation Office agency and asked them to reassess the plans on Newvos. I also met the trade unions and heard their comments. I clearly explained to the trade unions the problems with regard to the inherited budgets for the running costs of Departments—of which they were aware—and our manifesto commitment.
I asked the unions and the management to go away, reconsider the proposals and come back with an agreed set of proposals, which they did. A number of offices that were due for closure—regrettably, Burnley was not one of them—were removed from the closure programme, and the number of groups in the structure of the Valuation Office was increased. I concentrated particularly—as my hon. Friend, the management and the unions urged me—on making sure that the Valuation Office was building on its efficiency and had a firm and secure base for its staff. At no point have the unions indicated to me that they are unhappy with the negotiated settlement—in fact, I have been led to believe that the opposite is the case.
I wish to refer to Mr. Peter Upton, who retired from the agency but delayed his retirement because the chief executive was off ill. This was a time of change for the agency and we are grateful for the hard work that Mr. Upton undertook. He wrote to every single employee of the Valuation Office to explain the package that had been agreed. The package was not only about removing some of the offices that were due for closure after the reassessment; it indicated the process that would need to be in place to support staff and to ensure that the change was managed properly so staff did not feel insecure or uncertain about their future.
We all accept that change is difficult, particularly for those who are experiencing it. If my hon. Friend has not seen the letter from Mr. Upton, I will send a copy to him. I hope that he will forgive me for sending him another letter.
There are currently 33 staff in post at the Burnley office, five of whom are part time. All staff have received the location transfer preference form. From the preferences known so far, most of the staff have indicated that they are prepared to transfer to Preston. One has requested a transfer to Halifax, and three to Manchester. Only three have suggested that they could not move to Preston, one of whom has said he would like to be considered for early retirement. I hope that my hon. Friend sees nothing untoward in that request, which I am sure fits in with the member of staffs current life style. It has nothing to do with our forcing him out of the agency. Two others have not specified an alternative, and discussions will have to take place to ensure that their cases are handled properly.
There is enough room in the Preston office to take the staff from Burnley. As my hon. Friend knows, the lease at Burnley is up for renewal. I do not have the exact date 310 to hand, but the lease was due to expire close to the time of the closure programme. There will be minimal redundancies following the move, and the question of the rent at Preston has been dealt with.
§ Dawn Primarolo
This matter will not be resolved between my hon. Friend and me, because my information is that there is enough space. I will write to him, and his point is on the record. I shall seek clarification.
On the question of travelling costs, the staff are mobile. I do not know where they all live, as opposed to where they work. If that information is available, my hon. Friend Burnley will receive an explanation. The decision on the Burnley office was based on questions of accessibility and future development in terms of changing work patterns of the Valuation Office. In addition, the recently opened M65 motorway, which links Burnley with Blackburn in east Lancashire to both the M6 and the M61, will significantly improve communication links.
I can assure my hon. Friend that I have looked closely at the issue and we have considered the decisions made since the election. The questions of efficiency, the service to the local area and the costs have been satisfied by the proposals which have been agreed within the budgets that the three groups for which I am the responsible Minister—revenue, customs and the Valuation Office—have to continue to meet.
Having talked to the unions, my understanding is that they accept the agreement, and they entered the discussion on how best to deal with the proposals. They were not press ganged into it. They did so in order to reach agreement—otherwise, they would still be arguing. I accept that some local offices may not agree, and I should be grateful if my hon. Friend would send me a copy of the letter he has from the PTC. So that we can make plans, some clarification may be required about whether it holds constant views.
I regret to say that I do not think there is a case for reopening the decision on the Burnley closure, which will take effect in spring 1999. I accept, and I have impressed on the management of the Valuation Office, that it is crucial to support the staff so that they feel secure and we have better services at the end of the process. I undertake to respond to any questions to which my hon. Friend feels he has not received an adequate answer. It was right for him to bring the debate to the House today, and I hope at least that I have explained what we have done.
§ It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.