The decision to axe 250 public sector jobs in Sheffield and move the work to London will not save taxpayers’ money - while no formal business plan for the move has ever been created, staff being made redundant have been told.
Sheffield Central MP Paul Blomfield told a meeting of the Business, Innovation and Skills Committee that affected staff in Sheffield have been told the Government decision to get rid of their roles is not being made for cost-saving reasons.
It was announced last month 247 jobs are to go as a result of the Department for Business, Innovation and Skills - which is responsible for implementing the Government’s ‘Northern Powerhouse’ concept - shutting its Sheffield offices by January 2018.
BIS said at the time the decision was being taken was being taken to ‘reduce operating costs’ with a combined central HQ and policy centre being created in London.
Mr Blomfield told Martin Donnelly, Permanent Secretary of the department: “Last Tuesday a member of your BIS board visited staff in Sheffield and said the decision was based on the vision for the department.
“It is not a decision that would save money. There had been no cost benefit analysis.”
Under further questioning from Mr Blomfield, Mr Donnelly accepted there had been no specific business case made for the decision.
“As we go forward it did seem very clearly to us to have all our strategic people based close to ministers in London,” he said.
“It is based upon a clear new business model for all of the department.”
Mr Blomfield said: “So it doesn’t necessarily save money?”
Mr Donnelly said: “It is part of the plans that will save 30 to 40 per cent of our operating costs.”
Mr Blomfield said: “It is difficult for most people to understand how moving 247 jobs from Sheffield to London with additional salary costs saves money. Presumably this is a decision your board considered quite carefully on the basis of a business case?”
Mr Donnelly said: “We did it consider carefully on the basis of how we wanted to move forward the entire organisation, looking forward over five years.
“We did not do disaggregated business cases for each of the 80 offices we now have.”
Mr Blomfield also asked Mr Donnelly to provide the committee with a copy of the board paper that proposed the decision for the Sheffield closure.
Mr Donnelly said such a paper did not exist.
He said: “I don’t think I can point you to one specific document which covers specifically the Sheffield issue, because we had to look at this in the context of all of our buildings and all of our work to rationalise and to build a new model based around six or seven centres of excellence.”
Speaking after the debate, Mr Blomfield said: “The decision to move 247 civil service jobs from Sheffield to London is devastating for the people losing their jobs, it damages the local economy and it makes decision-making more London-centric. It’s completely unacceptable that there has been no proper business case or cost benefit analysis.
“It will end up costing the Government more, because there is no way on earth that moving an office from Sheffield to London will save money.”
The decision to close the office will be debated in Parliament on February 24.