Select Committee on Agriculture Minutes of Evidence



Examination of witnesses (Questions 20 - 39)

WEDNESDAY 13 DECEMBER 2000

MR PETER SIDDALL, PROFESSOR MICHAEL WILSON and MR DAVID TEMPERLEY

  20. I am not sure that I drew the conclusion from your evidence, at that stage, that something as radical as this was one of the things you had in mind.
  (Mr Siddall) I think I, personally, tried very hard to make it clear to you, Chairman, and to the Committee, at that time, that we did have a significant deficit which would need action. I remember raising that with you.

  21. We got that far, certainly.
  (Mr Siddall) Forgive me, but I made it clear that we could not carry on like this and we had to make some—I remember explicitly saying that we could not rule out job losses. We knew the restructuring plan was on the go, and it had been on the go for several months by then.

Mr Todd

  22. I must say, I think I grasped what was likely to come. Not the specific—
  (Mr Siddall) We could not talk in specifics at that stage.

Mr Mitchell

  23. Okay, so there were inhibitions about full consultation before August. What consultation process has there been since the announcement?
  (Professor Wilson) Since the announcement on 11 September we have had meetings with the HDC, with the East Malling Trust, with the East Malling Research Association (EMRA), with the HRIA and a large number of groups and Site Advisory Committees who represent the industry both at Kirton and Efford. So we have been doing a great deal of discussion. As I say, whether or not it is "consultation" is, perhaps, a moot point, because by that stage the Government-agreed plan had already been put in train.

  24. We have got submissions from romantically named organisations, like English Village Salads and Yorkshire Salads—which are particularly invigorating—and one here from Humber Growers. "As Chairman of the NFU Protected Edibles Group—the group most affected by the closure of Stockbridge House, and as Chairman of Humber Growers Ltd, one of the biggest HDC levy payers, I would have thought that some more detailed information would have come forward by now. It is very difficult to comment upon whether or not the cost cuts are being achieved in the most efficient way." In other words, he is saying he does not have enough details of the restructuring plans.
  (Professor Wilson) This is a document you received recently?

  25. This is dated 28 November, from Humber Growers.
  (Mr Siddall) I think a lot of people are inclined to take that view. I am afraid the answer we give them is that we have the facts and it is our duty to manage the organisation.

  26. Will the industry have an opportunity of consulting on the plans?
  (Mr Siddall) No, not really, no. It is a done deal, is it not? We have gone through this with the best advice we can get. We have had the backing of MAFF, we have spoken to the industry in the way that Michael has described and we have had subsequent discussions with MAFF, and the plan is the plan. They are funding it, they think it is the right decision, and as the management and directors of this organisation we feel it is our duty to go ahead. There is not any doubt in anybody's mind, detractor or not, that we have to cut costs and close a site. The argument is which site, and that is where the subjectivity comes in.

Mr Borrow

  27. Could we move on to the staff situation? There are two issues in relation to staff. The second one is to do with the problems for the staff themselves, but looking at it from the industry point of view, I have got concerns over the proposal to reduce the staff by 145/146. Are you convinced or can you convince the Committee that that is not going to affect the operation of the organisation in delivering the service that the industry wants? In particular, are you convinced that the closure of Stockbridge House, even if you are offering relocation to some of the staff there, will not lead to the loss of crucial members of staff that could actually fundamentally undermine the on-going success of the organisation itself?
  (Professor Wilson) Perhaps I should answer that question. On the first point you raise, in fact, of the 68 compulsory redundancies identified by the Heads of all the Scientific Research and Technology Departments in HRI, only one research scientist that you would classify as a "development scientist" is on that list. Post losses have actually dug harder and deeper into what you might call the basic-strategic end, because that is where we have been taking the cuts predominantly from MAFF. On the issue of Stockbridge House, we identified eight staff there that we would have wished to have kept with the organisation. On 11 September I wrote each of them a long personal letter indicating that we would seek to develop their careers, that we would give them very generous packages and that we valued them highly. In the end, when I asked them to give me an answer by 31 October, all of them responded by saying—sometimes very briefly—that they would not be prepared to take up my offer to them, and that, therefore, they would be making themselves redundant and taking the package that we were offering. We were not enforcing the "mobility clause". So, basically, they got a very generous package and we lost them. We were very deeply upset by that. However, HRI has many other staff who are equally capable of filling those gaps, and if we still have gaps then we can recruit to fill the few key places to deliver the development-type work which will be lost with the people from Stockbridge. In one or two cases, I do believe the Stockbridge staff decisions were for personal reasons, and from what they told me in great detail I accept that. I think with some of the other issues going on around Stockbridge, and this new technology centre idea—stuff of which we had, obviously, no knowledge early on—that may have influenced some of them, I believe.
  (Mr Siddall) If I could just add to that, in general terms on the staffing and the capability of HRI to do its job properly and to support its future business development, there is no question that we have preserved the full capability and that the reorganisation and, essentially, the simplification of a multi-site organisation will make it possible for us to be much more productive and efficient. This is something that I think we are very clear about. We are much better organised and having three main sites in future will enable us to be much more concerted, efficient and fast in the way we operate. There is another level of staffing problem where I think we do have a problem, and that is at the management level. We are still quite weak there. We have lost one or two people in recent times, and we do need to strengthen the management team in particular areas, which I think are well-publicised. We are a bit under strength there, and that is of concern to me at the moment and to the Board.

  28. I understand there are some concerns from within the industry that the capability of the organisation will still be there after the reductions in staff have been made. To what extent have you been able, as a result, as you have gone through the specific posts and you have got responses from staff on whether or not they will transfer or move, to satisfy those concerns from the industry (particularly those in the north of England, who, I think, are particularly concerned about the loss of the facility) that the same sort of research will take place in the remaining facilities?
  (Professor Wilson) I can, perhaps, give two parts of an answer there. One is that on 1 December we met the HDC Council and a large number of senior staff, those key staff that are in HRI who are particularly involved in development-type work. We spent many hours with the HDC Council. We presented very thoroughly our succession planning—the movement of staff and the movement of projects—and I can quote from a joint press release from the HDC and HRI—which will come out in The Grower tomorrow, I am told—"The HDC felt comfortable with HRI assurances that the vast majority of the projects would be completed on time, provided the plans to recruit key staff are successful." We are in that process now. We already have over 95 per cent of the HDC projects covered. We have been through them in great detail and my scientists and research staff have basically looked at every individual and we have looked at the funding of every individual, we have looked at their skills, and the 145 posts (68 of which were compulsorily made redundant) were all thoroughly analysed for their impact on the capability capacity of the organisation.
  (Mr Siddall) In general, I think we have an issue about maintaining the confidence of the industry. I think this is a general point which has come up. It is probably appropriate to deal with that at this point. I think we are conscious, as a result of the extremely strong outcry that has arisen, that the industry is not very happy with us. We think that we are still doing the job, and the evidence that we have is that we are transferring technology and serving the industry in the same way as we have done hitherto, and that there has not been any falling off. However, the perception this year has grown very rapidly that that is not the case, and that we have gone all sort of high-science and we are not interested in the industry and in development any more. This, I think, is a problem we have to address and we are very committed now to rebuilding bridges with the industry at all levels, and we have made some clear commitments to HDC, in particular, about closer liaison at the high level of the Chairman and the Council and, at the lower level, of the sector panels. In particular, in relation to the population around Stockbridge House, there are obviously a lot of growers who are feeling that we have abandoned them. That is not the case. We have to make absolutely sure that the communication, that technology transfer, will continue without our having a physical presence on the ground in Yorkshire any more. That is a clear obligation which we accept. We do it in other parts of the country, we do not believe that the technology is regional specific anyway, but the communication must be to the growers where they are. That is something which we can be a lot better at in the future, and we are taking very active steps to do that.
  (Professor Wilson) In fact, I could embellish on that point because last May, at one of our pre-Board dinners, both Mr Sparkes and Mr Ward who attended, made the point that it would actually serve the industry better if HRI were to organise farm demonstration projects in localities to cover the whole of the UK. They also made the point that if the research and the development and technology transfer were good enough it would be immaterial where the site was; they would travel to any site for something which was going to add significant value to their business. They would go to California, if necessary. Most of them work in the UK and Spain anyway.

Mr Drew

  29. Can I just ask a question about the people who have chosen not to go on with you? Are they taking early retirement? Are they going elsewhere in the industry? Or are they just going to leave the industry? One presumes that this is quite a loss to the industry as a whole.
  (Professor Wilson) All of them that have communicated with me have simply indicated that they are not going to stay with HRI. Some of them may be going off to be consultants. I really have not done what you might call an "exit survey" of what their plans are. Some of them may wish to get involved in other organisations in that part of the country. As far as we are concerned, we are being generous in our interpretation of the redundancy packages—whether voluntary or compulsory, or people who have been offered posts and decided not to move. We still give them a package.

Mr Mitchell

  30. Let us turn to Stockbridge House, which, on the face of it, looks very much like a panic measure and a particular piece of vandalism towards industry. We have received very strong letters of concern and protest about what has been going on. Here is Humber Growers, again. " . . . Stockbridge House is the only site currently owned by HRI which has a `Good Laboratory Practice' certificate, essential to carry out [MAFF] work. Also, the staff who are employed on the SOLA programme have all indicated they are not willing to move to Wellesbourne . . . Stockbridge House is the one site owned by HRI which had the glasshouse space to carry out the `muddy-boots' side of HRI's work—without it the transfer of knowledge to the industry will be lost . . .", and HDC will not be able to deliver. Then I have the letter I cited earlier from Bernard Sparkes which says: " . . . a very credible performance from a well managed site with teams of scientists and development personnel working on more than 20 HDC projects, managed by people highly rated by the industry. These are the teams of people the industry cannot afford to lose." That makes your decision to close it look like sheer vandalism.
  (Professor Wilson) It was not vandalism. Can I address a number of those points specifically, because they are actually wrong, to put not too fine a point on it. I suspect they are part of an orchestrated or, at least, concerted campaign that we have been up against recently.

  31. Orchestrated by whom?
  (Professor Wilson) Orchestrated by people around Stockbridge House, which we can understand, but the facts have been wrong and I must correct them. Stockbridge House is not the only site that has GLP; Kirton in Lincolnshire and Efford both have GLP. On the point of SOLA, half of the SOLA trials have actually been done at Kirton over the last three years. If you look at the data, a large amount of SOLA trialling, the QA and the Assistant QA officers, the Archivists, the Assistant Archivists and the field trial people, are at Kirton and at Efford. We presented to HDC the plan for the continuation of SOLA. Our discussions are on-going regarding the key co-ordinator, the single person that is perceived as being important but, by no means, unique in that skill in the UK—or in HRI for that matter. Stockbridge House does have extensive glasshouses. In fact, it has about a third of the total glasshouse area of HRI. Another third resides at Wellesbourne and the other third at Efford. As the Chairman has said to you, we have surplus assets, and the option of the closure of Stockbridge House, the changing of arrangements at Kirton, and the other decisions on the number of post losses, represented one of half-a-dozen options that we looked at and carefully scrutinised. The reason we closed Stockbridge—and I accept that the teams there have been very successful and are highly regarded in the industry (that is why we sought to keep them)—was because it has no unique facilities. There is nothing unique about the labs or the glasshouses at Stockbridge that is not replicated elsewhere within HRI, and on all of our other sites there are unique facilities which we could ill-afford to lose, some very expensive unique facilities, in which MAFF and other sponsors have invested. What was your last point about Stockbridge?

  32. The muddy-boots side of it and the fact that technology transfer is best done from that kind of facility.
  (Professor Wilson) We believe technology transfer can be done from all facilities. In fact, the interesting statistic is that indeed 20 per cent of our HDC funding has operated through Stockbridge, but 34 per cent of it comes out of Wellesbourne. There is a misconception that Wellesbourne is a blue-skies, academic research site, which it is not. Most of our commodity specialists and the people who sit on and interact with Sector Panels in HDC actually reside at Wellesbourne. If you really want to look at industry interactions with the R&D base, if you go into the LINK programmes, HRI participates in 24 LINK programmes—we are the most successful LINK organisation in MAFF—and 18 of those 24 LINKs are managed and were put together by scientists at Wellesbourne, 4 of them at East Malling and none of them at Stockbridge.

  33. Are you satisfied you can carry on the SOLA work to appropriate levels while the staff will not transfer and you are going to have to set up programmes elsewhere?
  (Professor Wilson) We already have the programme elsewhere.

  34. Is it going to be adequately conducted in the new environment?
  (Professor Wilson) Yes.

  35. I cannot really see what contribution closing Stockbridge makes, because we are told—this, again, is Bernard Sparkes—that you told him "that Stockbridge almost `wiped its face'".
  (Professor Wilson) I certainly have no recollection of that.

  36. He says—and this is his information, not hearsay from you—that " . . . only 10.5 per cent of its income comes from MAFF, with 3.5 per cent from the European Union . . . 45 per cent from HDC and a further 41 per cent from commercial contracts." Now, HDC, the European Union and commercial contracts are all, presumably, transferable if Stockbridge House sets up as an independent technology centre. So, with only 10.5 per cent from MAFF, closing Stockbridge House is not going to make much of a contribution to your core problem of insufficient public sector funding.
  (Professor Wilson) I contend that it is. It will save us the running costs of Stockbridge House—the fixed asset loss. The decision to close Stockbridge was not made on specific financial grounds, although I am sure Mr Temperley could furnish you with some numbers which would, again, refute some of the claims that Stockbridge "washed its face" or even made a profit over the last several years. In any case, the mix of funding at Stockbridge is not the reason that Stockbridge was or was not chosen, it was the overall effect. It had one-third of the glass, which, by definition from the previous HortiTech strategy, was a surplus asset that we were trying to sweat, unprofitably. We do not need that asset. What we have been doing, basically, is cutting our asset "cloth" and our partially-funded staff "cloth" to match the budgets that we have now and anticipate from our sponsors for the next several years.

  37. If the Stockbridge Technology Centre is set up, and the prospects seem good, and it is an effort I would commend if it keeps this technology and this facility in the north of England, it has got to divert funds from you; it is going to divert HDC funds, it is going to divert European funds and it is going to divert commercial funds to carry on the work at Stockbridge.
  (Professor Wilson) What I would say there is, first of all, we are not obstructing the formation of the STC.

  38. Are you encouraging it?
  (Professor Wilson) We are not actively encouraging it either, because it will compete with us—as you rightly say. It is like your point about universities and others; I am happy to compete but I am certainly not going to assist a competitor organisation establish itself. I have already spoken with the Member of Parliament, Mr Grogan, on that point, and, yes, good luck to them, but it will remain the case that HRI has the largest group of expert horticultural research scientists, technologists and commodity specialists etc to furnish the widest spectrum of work.

  39. If you are closing it to, effectively, save on the 10.5 per cent that comes from official funding, you are cutting your nose off to spite your face, are you not, because you are going to face the threat of losing other funding, which will now go to Stockbridge and not to you?
  (Professor Wilson) Can I let an accountant explain it?
  (Mr Temperley) If that was the case I think you would be right, Mr Mitchell. Our intention was to transfer the private sector work as well as any public sector work. Our intention was not to leave it there. Clearly, if the Stockbridge Technology Centre sets up and is successful in attracting that work away from us, then it will have some damaging effects on our overall plans. It would be foolish to pretend otherwise. However, in our long-term business case we would still compete with them, and we would look to build that over time, but in the short term it would clearly cause us some difficulties. We anticipated a saving, if you like, contribution from the closure of Stockbridge of the order of £650,000 towards our £3 million, and that included transferring the vast majority of the income to other sites without transferring the expenditure. That is where the benefit comes from when you carry out this type of rationalisation programme. So, clearly, if they compete with us in the north it will have some impact on us.


 
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