Jo Johnson – 2016 Statement on Business Department’s Future

Below is the text of the statement made by Jo Johnson, the Minister for Universities and Science, to the House of Commons on 26 May 2016.

Today the Department for Business, Innovation and Skills has announced its decision to create a combined BIS headquarters and policy function in London to deliver a simpler, smaller Department that is more flexible and responsive to stakeholders and businesses by 2020. This involves basing all policy roles in London by 2018 and closing the St Paul’s Place office in Sheffield.

Everyone affected will be able to stay in post in their current location until January 2018 and if they choose to take up a post in London there will be financial assistance for travel available for the first three years.

Anyone choosing to leave will benefit from the best exit terms currently available in the civil service. The support package on offer will include money for re-skilling, career coaching, and time off to look for other jobs.

The executive board and ministerial team take the future of staff affected by this decision, and the contribution they have made, very seriously. We are aware this decision will directly affect people’s lives, livelihoods and families and it has therefore not been taken lightly. Support for staff has been and remains our priority.

This unanimous decision has been reached by the BIS executive board after the Department conducted a consultation with staff and with the departmental trade unions which closed on 2 May. Inevitably it has been a period of uncertainty for staff but the consultation period has enabled the executive board to reflect on its proposal, to hear from staff, to take into account the equality analysis, and to consider the alternative business models which have been put forward.

Following the recent spending review, BIS has set itself the target of becoming a more flexible and efficient Department, as well as reducing its cost to the taxpayer. We have committed to deliver reductions in the Department’s operating expenditure which equate to around £350 million by 2020. Savings of this magnitude can only be delivered by fundamentally changing the Department’s overall business model in a way that works for a smaller workforce with more streamlined structures in a demanding service and policy environment.

BIS 2020 is the transformation programme to deliver that new business model—creating a Department that is simpler, smaller, and better for users by 2020. As a transformation programme it is ambitious. It means reducing our operating costs and associated headcount by 30% to 40%; more than halving our 45 public bodies; and rationalising customer support, grant giving and digital service delivery. It also involves reducing our locations from around 80 sites to seven business centres plus a regional presence across the country. These business centres will each focus on a key area of business activity bringing together expertise and helping us to build our capability.

One of these business centres will be a combined BIS headquarters and policy function in London. Crucial to this decision was bringing together BIS’ policy capability which is currently dispersed across 14 offices, and locating it near Ministers, Parliament, and other Government Departments in Whitehall.

Over the course of this Parliament our policy function will reduce from around 2,000 roles to around 1,500 roles, reflecting the size of the Department’s pay bill on our operating expenditure. As we get smaller we need a simpler structure that allows staff to interact easily and to respond rapidly and flexibly to Ministers, Parliament and other stakeholders. Being more flexible, agile and re-deployable enables us to respond to the challenging demands of modern Government. The steel crisis is a recent example of where we have had to urgently re-deploy large numbers of staff to address an urgent priority.

Operating split site and split team working as we become smaller would put an increasing strain on our organisational effectiveness which is why the executive board has concluded that a combined headquarters and policy function is the most effective model to continue to serve Ministers and stakeholders flexibly, effectively and sustainably.