I am grateful for the opportunity to highlight a vital issue affecting my constituency, which is the loss of more than 300 high-quality, white-collar jobs at the Peterborough Land Registry, mooted for September 2011 under the Government’s accelerated transformation programme. Nationally, there are plans for 1,500 redundancies, and hon. Members may wish to intervene to highlight specific issues in their constituencies.
I raised the issue during the Christmas recess Adjournment debate, and the Deputy Leader of the House was as good as her word and passed on my concerns to the Minister. He wrote me a helpful letter dated 14 January this year, in which he confirmed:
“Firm decisions will not be taken until February.”
We look forward to the publication of the response from Her Majesty’s Land Registry in due course.
I have serious misgivings about the proposals by the Ministry of Justice and the chief executive of the Land Registry, the chief land registrar, to close five Land Registry offices in the so-called greater south-east. To add insult to injury, if my constituents are made compulsorily redundant, the timetable may preclude them from receiving severance payments that are as advantageous as those of people doing equal jobs in three other Land Registry offices—namely Stevenage, Croydon and Portsmouth. We await further details of discussions with the Cabinet Office on that specific issue.
In November last year, I had the opportunity to speak to the chief land registrar, Peter Collis, to express my dismay and disappointment at the proposals. I also had a round-table meeting with a couple of dozen members of Land Registry staff at the Touthill close office in Peterborough city centre, on 25 November. I pay tribute to all those who work at the Land Registry for their professionalism, stoicism and quiet determination, and the reasonable approach that they have taken in this worrying period of their working lives.
I congratulate my hon. Friend on securing the debate. I have an interest in the matter as I have an adjoining constituency to his in which some of those who face unemployment reside. Does he agree that those people are extremely talented individuals and well experienced in the field in which they work? It will be a loss to the Land Registry if they are not properly looked after, but are simply discarded. Their skills are invaluable in assessing the job that they do.
It is perverse that the Land Registry proposes to dispense with the services of people with knowledge, skills and experience gained over a number of years when it recruits new people who do not have that level of skill and expertise.
There is significant concern about the evidential basis used by the Land Registry in making the business case published by Ministers on 22 October 2009. The former chief land registrar, John Manthorpe, has prepared a detailed document responding to the accelerated transformation programme, putting a different slant on the information provided by the Land Registry. Mr. Manthorpe, who we should remember was a distinguished chief land registrar from 1985 to 1996, has described the plans for closure as, inter alia,
“quite disproportionate and unnecessarily expensive”,
based as they are on the historically low level of property and mortgage market activity.
I will focus my remarks on the implications for the Land Registry office in Peterborough, but I feel sure that other hon. Members, perhaps including my hon. Friend the Member for Tunbridge Wells (Greg Clark), will argue the case for their own Land Registry offices. Many people have provided detailed responses to the consultation.
I rise to make a brief intervention and to congratulate the hon. Gentleman on securing this important debate, which has implications for us all in terms of Land Registry closures in the south-east. I would like to underline his point about the prospective expense as it applies to Croydon. Would it not be ironic for the Land Registry to find itself making a huge financial loss when selling the building in Croydon that it invested in recently—Trafalgar House—as it will lose about £15 million? That would seem to be a poor performance by an organisation that is supposed to be an expert on property.
The hon. Gentleman, my erstwhile hon. Friend, makes an extremely astute point. I have yet to be convinced that the Land Registry has fully thought through the financial ramifications of the disposal of the various offices across its estate, and the cost to the taxpayer.
I congratulate my hon. Friend on securing this important debate. Does he share my view that across all public services we need to find a way to provide those services most cost-effectively? The issue is whether decisions that might be made this year could prove more expensive to undo in future years should demand increase. That is the essence of the matter—is the economic case that is being prepared robust enough or, if it is wrong, could it lead to further public expense?
My hon. Friend is absolutely right and makes an astute point. In my opinion, it is appropriate to look again at the Lyons review, which is now somewhat historical, and at how it impacts on the financial and resource allocation decisions of the Government in their dying days.
I want to focus on the issues of staffing premises, the implications of a misapplication of the Lyons review and the economic impact on the city of Peterborough. The proposals pay little heed to the long-term experience of the staff at Peterborough, who are to be forced to accept compulsory redundancy at considerable cost to the public purse. Under Mr. Manthorpe’s alternative plan, all 19 current offices would remain open, with a continuation of the natural wastage programme through retirements, resignations and transfers to other Government offices and Departments in my constituency—for example, Jobcentre Plus, the Environment Agency and Natural England—as well as the continuance of the highly successful voluntary severance scheme, and the sale and lease of surplus office capacity across the Land Registry estate nationally.
The Land Registry business case advocates the recruitment of 594 new, inexperienced staff across the 12 retained offices post-2011, and the removal of 1,500 experienced, dedicated and skilled staff through compulsory redundancy, and a cost to the Exchequer, as alluded to by my hon. Friend the Member for Tunbridge Wells, of £186 million. Those plans do not stand up to scrutiny and are wrong-headed, short-sighted and flawed for reasons that I will elucidate.
On premises, there is an acceptance that the building occupied by the Peterborough Land Registry is too big and expensive for the staff complement occupying it, and the Government must, of course, address issues of cost and surplus estate. However, there is the capacity to let the excess space to the Department for Environment, Food and Rural Affairs, for example. The lease expires in 2013 and will need to be paid whether or not the building is occupied post-2011. Early surrender of the lease would be at a premium.
It is understood that DEFRA is interested in taking a sub-lease of at least one of the vacant floors in Peterborough, and that negotiations have progressed to the extent that occupation is expected to take place this month. The projected rental income for a single floor of the office is about £162,500 per annum, and the cost for occupying a floor, including rates and other fixed costs, is around £315,300 per annum. That proposed rental income represents approximately 20 per cent. of the rent paid for the Peterborough office, or a 20 per cent. saving on annual office costs. However, if the decision to close Peterborough office is confirmed, DEFRA may reconsider its position and the benefit of that income will be lost.
Valuation Office Agency data show that in rental terms Peterborough is significantly less expensive than many other localities. Headline rental values for the type 1 accommodation in the Peterborough office are £125 per square metre, compared with £145 in Leicester, £150 in Nottingham, £240 in Croydon and more than £1,000 in central London. There is no reason why the Peterborough office could not move to alternative, smaller rental premises in the city on expiry of the lease in 2013. For instance, Trinity Court, just half a mile from the current building, is being let at the moment for less than £100 per square metre.
Peterborough city council and the East of England regional assembly published a study in August 2004 that maintained that Peterborough was an ideal location for civil servants relocating out of London and the south-east under the auspices of the Lyons review, not least because the city has excellent rail and road links north to south and across the country to the midlands and the north-west of England.
The case for maintaining an office in Peterborough is that it would be considerably cheaper than maintaining one in London, and the office in the Peterborough constituency already has the necessary IT, telephone and furniture requirements. In the view of the property consultancy King Sturge in its report for Sir Michael Lyons, and according to the Lyons review and the Office of Government Commerce guidelines, it makes sense for the head-office functions to be located in the existing Peterborough office. That would reduce the Land Registry’s underlying cost base. The Peterborough building is leased, there is no capital asset value to be unlocked and it would otherwise be a continuing drain on resources through redundancy payments.
We are talking about people’s jobs and, in particular, older workers who have shown dedication and loyalty over the years to this important specialist work. This issue is about human capital and human resources, and the accumulation of knowledge, skills and experience, especially legal resources. Bluntly, lawyers are extremely expensive for the Land Registry to recruit, train and retain.
Let me move to the Lyons review criteria. The Lyons review has been interpreted wrongly in the Land Registry’s business case, and I want to spend some time on that misapplication, as it is integral to my case for a review of the decision as it affects the Peterborough office. The mandatory OGC guidance issued on 5 January 2009 relating to the Treasury approval of accommodation proposals states that there will be a strong presumption that existing civil estate properties in all the Government office regions outside London and the south-east will be used to meet new accommodation demands from Departments. It can be argued that, to comply with the review, it is not necessary to close the Peterborough office.
It is wrong to allocate a so-called red marking to the office by suggesting that it is non-compliant with the Lyons agenda. The criteria have obviously been misapplied. By that, I mean that Peterborough has been allocated a position as part of the greater south-east, but it is not Oxford, Milton Keynes, Surrey, Hampshire or Kent. It is on the border with the east midlands and it is in the north-west corner of the eastern region. It is not in the greater south-east and there was a clear error about that in the decision taken and the case made for closure.
Bizarrely as regards the Lyons report, table 4 of annexe G of the Land Registry document, on assessment against retention criteria, assigns a green marking to the Portsmouth office, confirming that it is compliant with the Lyons agenda. That is despite the fact that Portsmouth, the last time I looked, was in the county of Hampshire in the south-east. If the criteria had been correctly applied, the Nottingham and the Leicester offices would have been deemed more suitable for closure than Peterborough. The case for closing Peterborough in preference to other offices has not been correctly made.
In response to the report, Her Majesty’s Treasury set out in its letter of 23 March 2005, as part of the Government’s efficiency programme, the requirements for Treasury approval for all substantial accommodation proposals in London and the south-east. The protocol applies to new property leases, as well as lease renewals and extensions. It refers to the presumption against locating public sector activities in the greater south-east, which is defined as the whole of London, the south-east and the east of England. However, the protocol states at paragraph 5 that that requirement for relocation does not mean that activities already based in the east of England are expected to relocate outside the region when new accommodation needs are being considered.
At paragraph 6, the protocol confirms that proposals for accommodation in the east of England region in respect of public sector activities already located in the region are exempt from external Treasury oversight and Chief Secretary to the Treasury approval.
I want to finish by examining the significant impact on my constituency of the potential closure of the Peterborough office. Of all the proposed office closures, the Peterborough one will cause the greatest pain to staff due to the limited prospects for comparable work in the city, with no capital gain to the organisation.
The advice sought by the accelerated transformation team has been on the basis of socio-economic profiling of the areas that currently have Land Registry offices and with reference to the Government’s regeneration framework, to which all Departments are signed up and which the OGC is keen to see applied in decisions on the location of Government agencies. Although it is apparent from the Department for Communities and Local Government advice that the deprivation in Peterborough is not the same as that in, for instance, Hull and Birkenhead, the local economy and job market should be carefully considered.
Peterborough is a city with significant areas of deprivation. One ward—Dogsthorpe—is among the most deprived wards in England, some parts of the city are within the 3 per cent. most deprived and a further seven wards are deemed to have high levels of deprivation. National indices of deprivation rank Peterborough 80th out of 354 local authority areas. The east of England may be seen on some indexes as comparatively affluent, but it is important to assess the characteristics of specific locations. The male unemployment rate in the Peterborough constituency is 10.4 per cent. We have seen significant job losses over the past two years involving Pearl Assurance, Indesit, the city council, the Freemans catalogue company, Ideal Shopping Direct and the Norwich and Peterborough building society. Wage and skill levels are below the east of England and the south-east regional averages.
Therefore, the business case for closure of the Peterborough office is contrary to and wholly inconsistent with the regeneration framework and Government guidance, and the socio-economic impact has not been sufficiently or correctly considered in the wider context. Peterborough and its wider sub-region have a very different economic profile from most of the south-east, which should be taken into account when assessing the socio-economic impact of the proposals.
The Land Registry has failed to make a coherent or logical case for the closure of the Peterborough office in September 2011, but there is an alternative, as enunciated by the Public and Commercial Services Union individual consultation involving members of staff at the office. The Land Registry has brought forward plans that are financially and organisationally at variance with the Government’s objectives and economically damaging to my constituency, and that involve the straightforward misapplication of the decision-making criteria in respect of the Lyons review. For those reasons and with due cognisance of the contribution of the staff now and in the future at the Land Registry in my constituency, I urge the Minister to think again, review the plans and level the playing field so that the Land Registry in Peterborough can continue its excellent work.
I start by congratulating the hon. Member for Peterborough (Mr. Jackson) on securing the debate. Since the Land Registry launched the consultation, I have met a number of hon. Members, including my hon. Friends the Members for Stevenage (Barbara Follett), for Portsmouth, North (Sarah McCarthy-Fry), for Plymouth, Devonport (Alison Seabeck) and for Plymouth, Sutton (Linda Gilroy). I have also received a number of representations from other hon. Members and had exchanges in the House with the hon. Member for Croydon, Central (Mr. Pelling). Later today—very shortly—I am to meet the hon. Member for Tunbridge Wells (Greg Clark).
I understand all the concerns, including those that the hon. Member for Peterborough has raised here today. This is a very difficult time for the Land Registry. I agree with his remarks about the quality of the Land Registry. The organisation is fundamental to our national way of life. We are a notably—notoriously—home-owning country and the Land Registry plays a fundamental role in that process of home ownership. Most of us have had experience of it at some point, and the overwhelming majority of people are satisfied with their experience of the Land Registry. In my experience as a Minister, it is an extremely well run, well managed and well staffed organisation. That is the case everywhere one goes. It is worth pointing out that, in the customer surveys conducted in 2009, 95 per cent. of customers rated the Land Registry’s overall performance as good, very good or excellent. Very few organisations can match that level of customer satisfaction.
I am grateful to the Minister for giving way and I shall be brief. Given that the property market is showing signs that it might pick up in the not-too-distant future, and assuming that that will happen, does not the Minister think that now may be the wrong time to get rid of people involved in the property business and in registering property transactions? We do not know when the market will pick up, but it can go only one way.
I thank the hon. Gentleman for his gesture of confidence in the Labour Government and their administration of the economy. I am not sure that he altogether intended that compliment, but I accept it.
I understand the point that the hon. Gentleman makes. It has been made by several hon. Members over the past few months. It is important to recognise that the transformation programme is not being driven by the present property market. As we all know, the downturn has been savage, but there are signs that the market is picking up. No one knows quite how far or how fast, but my expectation, like his, is that it will return to growth. However, that is not the only thing driving the transformation programme.
The Land Registry’s business is changing. It is an efficient organisation—I referred a moment ago to the level of customer satisfaction—but the organisation is also well managed. I pay tribute to Peter Collis, the recently departed chief land registrar, who was in charge of the registry for many years and during a difficult period of transformation. I am confident that the new chief land registrar, Marco Pierleoni, will be an excellent steward of this precious British institution.
I am sure that all hon. Members here know that the staff of the land registries in their constituencies are committed to their work. Many have served for a long time; for some it has been a family business, with generations of the same family working there. Their high levels of commitment to the business and of professionalism are widely recognised. In those circumstances, it is particularly difficult for staff to have to go through such a process. We recognise that, as do the Land Registry management, and it is important to put that on the record.
I am grateful to the Minister for giving way. I am grateful also for him agreeing to meet me later today. Given the almost family feeling that there has been in the Land Registry over the years, which the Minister acknowledges, is it not invidious that the redundancy arrangements for different offices should be different, when people have served with great distinction in the same organisation for a long time?
I would have spoken about that later, but I shall do so now as the hon. Gentleman’s remarks have precipitated it. As a Minister, I am responsible for the operations of the Land Registry, but it is a trading fund and is operationally independent. He will forgive me for not commenting on what are essentially operational matters.
I shall try to get away with making two points. Is that not a comment on the way in which British politics no longer works? The Minister is constantly saying that everything is at arm’s length, but it means that there is no accountability. If he is accountable, perhaps he should take account of the fact that the Croydon office is shown to have the lowest unit costs in staffing terms. Is not the reality that it is the property portfolio that is driving these decisions, rather than what might be regarded as marginal revenue issues such as the general efficiency of each office?
I should congratulate the hon. Gentleman on the way he spliced a set of questions into one rather elegant intervention.
In the time remaining to me, I shall deal with the question of operational independence. I am the Minister and I am accountable. I have taken a keen interest in the process over many months. I have met a large number of parliamentary colleagues and had several meetings with the trade unions involved and with individual members of the Land Registry. I consider myself accountable for the outcome, and I am happy to be held responsible for it.
So far, the arrangements have worked particularly well. We have seen how satisfied customers of the Land Registry are and that it is an efficient organisation. However, it has to change with a changing world. All organisations have to do that. Governments and politicians have to do so, and so does the private sector. That is the world that we live in—a world of rapid change—and good organisations respond effectively and rapidly to that change. That is what the Land Registry is doing.
I am sorry if this seems a bit of a tease, but I have to tell hon. Members that the Land Registry board has considered the consultation thoroughly and taken account of it. I can say from my own knowledge and experience that it has been open and transparent. It has gone into the consultation with a genuinely open mind. It has made its recommendations, which are being considered by Ministers and, as always, by the Treasury. The outcome of the process will be announced very shortly. I hope that hon. Members will pass that information on to their constituents.
I know that it has been a difficult time, but we are approaching a resolution. Ministers and the Land Registry itself are conscious of the need to bring the uncertainty to an end. We understand that it has been destabilising, but it is worth remembering why we are in this position.
The hon. Member for Peterborough referred to the downturn in the property market. It is worth setting out how severe it has been. Transaction levels, which are the key factor for the Land Registry, will have fallen from 16.1 million in 2007-08 to a projected 10 million in 2009-10. The Land Registry receives no central funding because it is a trading fund; it depends on the fees that it receives for services rendered. It made a loss of £130 million in 2008-09 compared with a surplus of about £70 million in 2007-08.
It is a severe problem for any organisation to have to change the nature of its business. The Land Registry has been well run for many years and it has had reserves, but it has to respond to the changing market. No one knows what will happen to the property market, and the trading fund has to be prudent in its approach. However, underlying all that is a fundamental change in the way in which it does business.
It is important to remember that the blueprint for the transformation programme was published nearly four years ago in 2006. It was clear then that the Land Registry would have to become a smaller organisation and deal with its customers differently. An increasing range of services have become available online and there have been improvements in efficiency, as we expect of all public sector organisations.
The Land Registry cannot have it both ways. It cannot say that we are using the blunt instrument of the Lyons review as a means to weed out the wheat from the chaff. However, on 14 January the Minister wrote to me, saying:
“Consistency with the Lyons Report was one of a range of criteria used in arriving at the proposals.”
Will he confirm that Ministers are disregarding the Lyons review—indeed, as we have established, they may be misapplying it—and considering other factors? If so, what are they?
If the hon. Gentleman can be patient for a few days more, I will happily take his representations on whether the review is a blunt instrument. I shall be happy to explain then the rationale for the decisions that have been taken. I ask him to suspend his judgment about how blunt an instrument it has been for a few more days; we can continue the discussion then.
I assure the hon. Gentleman that he will never irritate me. I am never irritated. However, if he will forgive me, I shall give not even a hint of the outcome of the process. All that I can say is that I will be happy to receive further representations on any points once the announcement has been made. Until then, I hope that all hon. Members will suspend their judgment—on blunt instruments, political partisanship and the rest of it. Everything will be revealed shortly.
This matter is fundamentally important. The fact that so many hon. Members are here after the House has risen—for the record, the House has adjourned—shows how important it is. I shall be happy to continue our dialogue once the announcement has been made. I am not saying that I can interfere with it, as the Land Registry is operationally independent. There is no doubt that we are talking about an organisation that is responding flexibly and efficiently to a changing world. The property market is changing dramatically and none of us knows where it will end up. It is important that the Land Registry is in a position to respond efficiently, flexibly and rapidly to change.
Sitting adjourned without Question put (Standing Order No. 10(11)).