Skip to main content

Benefits Office (Portobello, Edinburgh)

Volume 462: debated on Wednesday 11 July 2007

I am grateful for the opportunity to bring to the House the case for keeping open the Jobcentre Plus benefits delivery centre in my constituency—a benefits centre acknowledged to be one of the most efficient in Scotland.

It might be helpful if I sketched out a little of the history of benefits delivery and processing on the east side of Edinburgh. Until a few years ago, there were two offices that people living in Portobello and the surrounding area could visit in connection with unemployment and benefits: a jobcentre in Windsor place, Portobello, and a social security office, Phoenix house, on Portobello high street.

Following the 2004 spending review and the Gershon report, the Department for Work and Pensions was obliged to reduce the number of its staff by 30,000 full-time equivalent posts by the end of March 2008. Half of those—15,000 full-time equivalent staff—were to come from Jobcentre Plus. An efficiency programme was put in place, and about 630 offices were earmarked for closure, among which originally were both Portobello offices.

I was pleased that the efforts made by myself, as the local Member of Parliament, and by the trade union, the Public and Commercial Services union, led to the Government pulling back from the proposition that Phoenix house would be one of the offices to be closed. Talking to managers in the Department for Work and Pensions at Edinburgh level, Scottish level and head-office level proved to be constructive. At the time, the chief executive of Jobcentre Plus was David Anderson; so far I have not yet sought a meeting on this issue with the new chief executive, Ms Lesley Strathie.

This is the first time that I have put this issue on the record in the House of Commons, but I must say that I was not at all happy about the final geographical distribution of offices throughout the city of Edinburgh implemented as part of the Jobcentre Plus roll-out. It is true that the representations made by the union and I resulted in the retention of the office at Phoenix house, Portobello. The site is a good one: the building was purpose-built by the then Department of Social Security; it is highly accessible by public transport; and there is a good availability of staff.

What I deeply regretted, and still do, is that the decision was taken that Phoenix house would cease to be an office that is open to the public, and that my constituents from Newcraighall, Craigmillar, Niddrie, Portobello, Craigentinny and the greater Portobello area could no longer visit it for advice and help. Given the deprivation in the east of the city and the number of cases being handled per week at Portobello, which is significantly more, for example, than at the Wester Hailes office, a better balance would have been to have had an improved facility at Leith—a good public office, as exists now; let me emphasise that—and to retain the office in Portobello as a centre also open to the public.

My constituents now have to go to the Edinburgh High Riggs office or to the Leith office. That aside, the important decisions that were taken maintained a configuration of offices that still saw a role for the vital Portobello Phoenix house office. No longer open to the public, the Portobello office has become a benefit delivery centre, dealing with social fund claims. It is by no means a small office. It is a significant operation in Portobello, with about 95 staff. The team processes social fund claims; indeed, from 4 June, all social fund applications in the Edinburgh, Lothian and the borders area have been processed at the site.

Given the backdrop of where the Government are going nationally, with benefits processing being done at large centres, the decision to do all social fund processing for Edinburgh, Leith and the borders area at Phoenix house is wise and constructive in the circumstances. It is now a settled and practical arrangement that is wholly consistent with the existence of major processing centres at Bathgate and elsewhere.

My hon. Friend the Minister will be aware that we are in the middle of a sharp contraction of DWP staff in the Edinburgh area. Her colleague, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) wrote to me in May to advise me that the debt management unit with 28 jobs at Argyle house in the centre of Edinburgh in my constituency will close in March 2008.

When the Department was closing the Castle terrace office, which was also in the centre of Edinburgh in my constituency, the staff were offered the opportunity to move to the large processing centre at Bathgate in west Lothian or to Portobello. Clearly, that was an important career decision, which I understand had to be made at the end of last year. At the end of the process to facilitate the closure of the Castle terrace office, a number of staff indicated that they would accept redeployment to Phoenix house, Portobello. The senior DWP official informed them that Portobello was

“a long term feeder centre with the emphasis on the long term”.

Knowing the Minister’s interest in good industrial relations, and her concern that we treat people decently, I am sure that she agrees that the undertaking to staff is important. Those people are now working at Portobello. They moved there because they viewed it as a good prospect for the future. I repeat that they were told that it was

“a long term feeder site with the emphasis on the long term”.

No doubt they were aware that the Portobello office is highly efficient and is recognised as such at a Scottish level, so they would have assumed that the jobs that they were moving to were reasonably safe.

Everyone to whom I have spoken, including the Jobcentre Plus senior management, has praised the efficiency and skill of Phoenix house staff. They are highly able people and many have decades of experience in their field. I am conscious that the Minister and the Secretary of State moved to their Department only a couple of weeks ago, but I am sure that the Minister will already be familiar with the way in which Government policy on contributory and non-contributory social security benefits is being implemented in Scotland.

I received a letter dated 7 June from the Jobcentre Plus district manager confirming that the transfer of the processing of all social fund applications for the entire Edinburgh, Lothian and the borders area to the Portobello office was to be completed on 4 June. That was good news, but unfortunately the letter went on to inform me that the office was to be closed because all that work was to be moved to Glasgow Springburn by March 2008.

It is remarkable that any Department should treat its employees in that way. If that had happened in the private sector there would be an outcry. I doubt whether a single Member of Parliament or trade unionist in this country would regard the proposal as fair and reasonable. Let us be clear: the work is being taken away from one of the most efficient offices in Scotland.

The plan is to reduce the number of sites in Scotland dealing with benefit claims to eight mainstream benefits processing centres and two social fund processing centres with no sites in Edinburgh. Under the new plan, all social fund applications for the Edinburgh, Lothian and borders area will be transferred to Glasgow. We can reasonably assume that virtually none of the Phoenix house staff would find it practical to transfer to Glasgow. As is standard practice, staff have been told that efforts will be made to redeploy them.

My hon. Friend will probably set out some of the packages and additional money that will be available if people are prepared to travel longer distances and alter their child care arrangements. Obviously, the Government are making money available to try to facilitate people moving to other offices, but it will not happen in Edinburgh. Frankly, I think everyone realises that without one of the 10 major benefit delivery centres being located in Edinburgh, there is little prospect of those civil servants being able to stay in public service. Most of the staff are too young for early retirement, and the reality is that most of the 95 staff will be made redundant if the plan goes ahead.

Let us consider the proposal from the point of view of efficiency and the public purse. Under the plan, an efficient office will be closed. Dozens of redundancy packages will be paid out and, over in Glasgow, new staff will have to be recruited from the street and trained for the work. I am sure that anyone looking at the proposal would conclude that there is little sense in it. The expense of redundancy packages, recruitment and training will be large and entirely unnecessary. That is not an acceptable way to treat employees.

Staff have worked at Phoenix house on the basis that it was a long-term prospect. They have put in place the social fund operation and are running it well. Now, just as the transfer of the area’s social fund work is completed, the Phoenix house team is told that it is to lose its jobs and that new staff are to be recruited elsewhere.

I remind my hon. Friend that some staff moved to Phoenix house precisely because it was seen as a long-term prospect, and the DWP told them that a few months ago. The job losses will be devastating for the staff and their families, and the closure of such a large operation will be bad news for the local area because the staff bring a lot of business to local shops and banks.

The staff who lose their jobs will have great difficulty in finding comparable work. It is important to understand that Edinburgh is not homogenous. Like most of our cities, there are areas of affluence with strong economic growth owing to the strength and stability of the UK economy. I believe that that economic growth—in Edinburgh it has been predominantly in the financial sector—is because of the long-term management over the past 10 years by the former Chancellor of the Exchequer, now the Prime Minister. However, the recent growth—I think my hon. Friend knows this—has been predominantly in the west of the city, and the jobs that are going are in the west of the city and in the central area.

If my hon. Friend has had the time to pore over the statistics and compare Edinburgh with other cities in the United Kingdom, she will have grasped that it cannot be overlooked that a large number of people in Edinburgh are dependent on the benefits system. As Jobcentre Plus points out, the region

“also contains several Wards at the lower end of the poverty spectrum”.

The east of the city holds some of the most deprived areas in Scotland. The most recent Scottish index of multiple deprivation report showed that the most employment-deprived place in Scotland is Craigmillar in my constituency, an area that I have had the privilege to represent in Parliament for more than 30 years.

Whichever way we look at the proposal to close Phoenix house, it is unacceptable. Ninety-five people, many of them highly experienced staff, will lose their jobs. That is clearly bad news not only for the staff, their families and the local area, but for the work of Jobcentre Plus and the DWP. The proposal makes little financial sense, entailing as it does so much unnecessary expense, and it makes little sense to service delivery, because it replaces an efficient operation staffed by fully trained personnel with a new office staffed by new recruits.

I am grateful for having had the opportunity to raise the matter today, because it is an important issue in my constituency and beyond. I am grateful for the opportunity to put the case for Phoenix house, the Portobello benefits delivery centre, today. I very much hope that my hon. Friend the Minister will take into account what I have said, so that the proposal will be reconsidered.

I congratulate my right hon. Friend the Member for Edinburgh, East (Dr. Strang) on securing the debate. I have had several conversations—one by phone and one in person—with him before today, and from my correspondence and meetings with my predecessors, who are now the Minister for Europe and the Financial Secretary to the Treasury, I know that my right hon. Friend has been a strong advocate on behalf of his constituents and their future at the Portobello office. I have listened very carefully to his points today, and although I do not think that I can deliver for him what he most wants, which is the retention of the Portobello site, I hope that I can reassure him about some of the actions that we are taking, and certainly convey my understanding of some of his queries about the suggestion of a long-term future for Portobello with the transfer of the social fund operations to that site.

I shall explain the way in which we support people both through employment advice and support, and through support for people in receipt of benefits. There used to be two very different services, the Employment Service and the Benefits Agency, and they were brought together to form Jobcentre Plus to strengthen our welfare-to-work system, which is based on the needs that people who access the service have for a one-stop shop. It is also based on the use of IT and on the better development of our approach to personal advice and support, so that we can be more efficient in the turnaround of benefit applications and provide better quality advice for people who want to get back to work.

We have transformed the way in which our services are delivered to customers, partly through the increased use of telephony services, and the almost complete roll-out of new Jobcentre Plus offices, which are a world away from those of the past, where often the desks and chairs were chained to the floor, and there was a high counter over which one would engage with staff. Now, the offices are much more user-friendly and open, and we can only thank the staff who have helped us through the process of providing that different environment. It pays huge dividends for staff and for people who use the services.

In September 2004, the then Secretary of State announced that, as part of the modernisation of Jobcentre Plus, benefit processing would be centralised to 81 sites throughout Great Britain by 2008. At the time, more than 650 sites processed benefits, which illustrates how significant an undertaking centralisation is. Why do we want to do so? Primarily, it is to support our customers. The centralisation to larger sites enables Jobcentre Plus to be much more responsive to customer inquiries. It also enables greater consistency of process to tackle the variations in the way in which claims are processed and the time they take, it enables staff to develop more in-depth knowledge and experience, and it enables 25 per cent. of benefit delivery centres’ resources to be dedicated to telephone teams, which provides greater opportunity for customer contact. The response from customers suggests that the changes have been gratefully received, but there is always room for improvement.

The structure will also deliver benefit payments much more efficiently through cost savings on management and overheads, and it will allow the Department for Work and Pensions to make better use of its estate. To date, 54 benefit delivery centres have been opened throughout Britain, and we have moved our benefit delivery from almost 400 sites. In Scotland, we originally identified eight sites, which we have been converting to benefit delivery centres. We hope to complete the centralisation of that process by March 2008. We announced in 2004 that Portobello was not one of the sites selected to become a benefit delivery centre, and therefore it was scheduled for closure. I shall explain some of the reasons why.

When we made the decision, we looked at several factors, considering where the new larger centres would be, and whether the existing building could seat 100 to 250 people, which is our preferred size for capacity, delivery and savings. We also took into account the costs, our ability to retain staff, and our ability to redeploy staff in the sites that would close. Portobello has a smaller seating capacity for benefit processing, and it is acknowledged that there is very little scope for easily securing extra space. I know that my right hon. Friend has strong views on this next point, but moreover, the buoyant nature of the Edinburgh labour market and the fact that, as the Scottish capital, there are many other Government jobs in Departments and in the Scottish Executive, meant that compared with other locations, staff there had more redeployment opportunities. In addition, the closure of Portobello will also generate more than £500,000 every year in estate savings.

Back in 2004, we knew that centralisation would be a significant undertaking. To maintain customer service during that period, processing teams in some sites have been retained on a longer time frame to provide tactical support until transformation nears completion. Since January 2007, when income support, jobseeker’s allowance and incapacity benefit processing migrated from the site, Portobello has been processing solely Edinburgh social fund work for exactly that purpose—to provide transitional support.

I am grateful for that response, and I hope that there will be an opportunity—although not today—to look into the alleged £500,000 of savings, taking into account the huge cost increases that will be generated this year and next.

Staff were told in the autumn that they could move to the Portobello long-term feeder centre—with the emphasis on “long-term”. Portobello is a highly efficient operation and, as I have tried to argue, it fits in pretty well with the rest of the set-up. It handles all the social fund applications for the Edinburgh, the borders and Lothian areas. I hope that my hon. Friend will address that point, because it is fundamental to all civil servants in Edinburgh.

I shall try to respond to my right hon. Friend’s point. In his contribution and just then, he raised the point about the use of a “long-term” feeder centre, and I have asked about it. The advice that I have received is that feeder sites were envisaged to be in place only from 2004 to 2008, the period of transition, and that no guarantees were given for them beyond March 2008. However, I am happy both to write to him about that point, and to look into the use of the phrase “long-term”.

I also have a copy of the letter that was sent to my right hon. Friend on 7 June. It clearly says that the processing of social fund applications at Portobello is an “interim measure”, taking place

“whilst we complete the Benefit Delivery modernisation plans, which will see the final proposed destination of Social Fund for Edinburgh, Lothian and Borders move to Springburn in Glasgow by March 2008.”

As I said, my understanding, which is based on advice, is that that was always envisaged as part of the transition process.

We do not expect the closure of the Portobello office to have a detrimental impact on our customers. Face-to-face services are provided from our jobcentre in Leith. Customers contact the Portobello office by telephone only; no face-to-face service is provided there. Moving the work to the larger benefit delivery centre in Springburn will involve only a change in telephone number for our customers, and calls for crisis loans are free from a land-line.

Earlier this year, it became apparent that despite falling case loads in Scotland, our benefit delivery centres would have a shortfall in capacity, so we reconsidered the possibility of creating a delivery centre in Portobello. However, the same constraints and considerations that applied in 2004 still apply, so we decided to put the additional centre needed for Scotland in Aberdeen. That took into account the potential for redeployment, which was felt to be far less in Aberdeen than in Edinburgh.

We know that our staff in Portobello, in common with many other sites from which we are moving work, have concerns about the changes. Of course they do. Staff have been aware since 2004 that the site would not be a benefit delivery centre, and I hope that we have endeavoured to keep them as informed of developments as possible while centralisation has progressed. The union PCS has also been kept up to date regarding all plans and decisions for Portobello.

On 23 May, managers and staff were informed about plans to complete the modernisation of our services in Scotland, and we began the gradual migration of social fund work from Portobello to Springburn benefit delivery centre near Glasgow. It will be completed by March 2008. I understand my right hon. Friend’s concerns about recruiting extra staff to carry out work at Springburn when staff will be available at Portobello. However, there were good reasons for that decision. Migrating work between other benefit delivery centres in Scotland has enabled the redeployment of approximately 400 staff members from other parts of the Department. We need sites of that size to generate the economies of scale necessary to provide acceptable customer service levels on a reduced budget.

As my right hon. Friend will know, the Edinburgh labour market remains buoyant. I understand that the employment rate is higher than in the rest of the country and the unemployment rate is lower. It is the UK’s second and Europe’s sixth largest financial centre—Royal Bank of Scotland, HSBC and Standard Life all have their headquarters in Edinburgh. The financial services and construction sectors have experienced their highest levels of growth in the past financial year. We hope to offer opportunities for redeployment into other civil service jobs, but we also know that the skills and training of the centre’s staff are very portable into other work environments.

Despite uncertainty about the future, the permanent staff—Portobello has 84 permanent and 11 temporary staff—have continued to make a valuable contribution, and I do not want to take anything away from that. There is no question about their work, commitment and service delivery. The question is whether it is as efficient as it could be within the context of what we want to deliver for our customers and the constrained budgets that all Whitehall Departments face in delivering services.

I acknowledge that some public sector work is moving out of Edinburgh, but I challenge my right hon. Friend’s suggestion that the Portobello staff have little chance of finding alternative work. As well as the technical expertise needed for benefit processing, they have developed a number of transferable skills—IT, administrative proficiency and the ability to build constructive working relationships and deliver good customer service, often to some of our most vulnerable customers.

When the Minister talks about moving to alternative jobs in Edinburgh, does she mean jobs in the public sector?

Obviously, we will consider opportunities for redeployment in the public sector. Despite the fact that some public sector jobs are leaving Edinburgh, it is the Scottish capital. As well as Whitehall Departments and the Scottish Executive, it has a number of jobs into which public sector workers could redeploy that provide far more opportunities than in other parts of Scotland. That was part of our consideration. I have talked to senior managers in Jobcentre Plus about how important it is that we engage during the months ahead about future possibilities and support for staff as the changes take place.