MPs have criticised a decision by the Ministry of Justice (MoJ) to outsource its back-office services to Shared Services Connected Limited (SSCL), a joint venture between the Cabinet Office and Steria.
During a debate in the House of Commons yesterday, Paul Flynn, Labour MP for Newport West, described the decision by the MoJ to abandon its own shared services programme in favour of SSCL as “an act of madness”.
He claimed that the department’s shared services centre in Newport has saved £120 million since it was set up in 2006.
However Flynn criticised the shared services programme launched in 2011, at the core of which was a plan for Steria to develop a single Enterprise Resource Planning (ERP) system for the department.
He said: “What has it achieved? It has achieved a loss of £56 million. What has it produced? Nothing of any practical value: that is the simple truth.”
Bill Esterson, MP for Sefton Central, claimed that the write-off means “that Steria’s track record is open to question” and asked whether an alternative in-house bid had been fairly supported or assessed by the department.
Flynn said: “It seems an act of madness to take successful jobs from an initiative developed in Newport and send them overseas, and to spread the profits to a foreign company.”
The debate was also attended by Newport East MP Jessica Morden and Nick Smith, MP for Blaenau Gwent.
Justice minister Simon Hughes sought to reassure the MPs by saying that most of the MoJ’s 1,000 staff involved in shared services will transfer to one of two independent shared service centres.
Hughes rejected claims that the agreement will lead to civil service jobs being offshored.
He said: “The deal is that any such proposal to offshore would require the consent of the Ministry of Justice, and the current Secretary of State has made it clear that while he is in office, he would not give that consent.”
Hughes claimed that if the contract with SSCL is entered into, the existing MoJ employees’ terms will be protected by TUPE arrangements. However Hughes admitted that this arrangement will only stand until October 2015.
He added: “The current arrangement is that the Ministry of Justice has secured at least 12 months’ job protection, starting from October 2014, when the transfer to SSCL is due to take place.
“If the transfer does go ahead this autumn, the jobs will be secure as well as all the transferred rights for 12 months after that. As part of the agreed protections, we expect all MOJ sites to remain open for at least the first year after transfer to SSCL.”
The Public and Commercial Services (PCS) Union said that plans to outsource the MoJ’s back office to the Cabinet Office/Steria joint venture will result in the closure of three offices and 500 job losses.
Its members at the department went on strike last Monday in protest over the scheme.