Public Sector: Working From Home

Question

11:07:00

Asked by

To ask His Majesty’s Government what plans they have to assess the impact of working from home on the productivity of the public sector.

Noble Lords will, like me, want to thank the public sector for its continued dedication and for what it does day in, day out. As my noble friend Lord Livermore informed your Lordships’ House in a similar OQ last year, the Government inherited a situation in which public sector productivity remains at 6.4% below pre-pandemic levels. This is clearly unacceptable. Our focus is on fundamental reform of our public services to drive greater efficiency and productivity. Further details will be set out in next week’s Spring Statement and the forthcoming spending review.

I thank the Minister for her response but I am rather perplexed. If economic growth is the Government’s top priority, why are they failing to conduct a full and proper assessment of the impact of working from home across the public sector—not least because the 7% fall in public sector productivity since the pandemic has coincided with a surge in remote working? There are key questions to answer, whether it is by sector or job function, for both management and employees, especially the young. It is not a one-size-fits-all issue, as the private sector is rapidly discovering. Why do the Government remain so resistant to learning?

I thank the noble Lord for his question. I am sorry but I do not agree with the sentiment behind it. In the Budget last year, the Chancellor announced a £100 million public sector reform and innovation fund, which has established a “trust and learn” approach to how we can deliver public service reform. We should be very clear that, according to the CIPD, the overwhelming majority of private sector organisations also now operate hybrid working at 60%, which is the same level as in the public sector and the Civil Service.

Clearly, if we are going to raise public service productivity, we must tackle training and skills. I deeply regret that the coalition Government sold off the National School of Government. Over the last 15 years, much of the training for our public services has been outsourced, often to management consultancies. What are the Government doing to bring training back in-house and to ensure that there is upskilling for the whole of the public sector, done on a fully professional basis?

My Lords, this Government are absolutely committed to the re-prioritisation of our workforce in delivering front-line services, which will require ongoing upskilling and training. On bringing it in-house, I look forward to ongoing conversations with the Minister sitting to my right, my noble friend Lady Smith of Malvern, about how we will collectively work across government to achieve it.

My Lords, is not the answer to the question asked by the noble Lord, Lord Londesborough, of why the Government are not tackling this problem the same as for why their policy on schools has been changed and their whole approach to employment policy is being changed? It is because this Government are run by the trade unions.

My Lords, I think that many general secretaries of trade unions would wish that to be the case. As a former trade union officer, I am very proud that this Government are embedded in and wedded to Labour and trade union values. We are working with our trade unions to deliver a plan for change regarding flexible working and our new normal. Noble Lords will appreciate that we are now five years on from the pandemic, when we had 80% of the workforce working from home. We now have a new normal. We look to what people’s expectations are and how we can deliver on those and on the delivery of our core mission of economic growth, working with all partners, trade unions and employers, to deliver it.

My Lords, flexible working can give great benefits to both employees and employers, in the public sector in particular, but will my noble friend consider the importance of making sure that there are times when people do attend work in person where they can, not least to build teamwork and camaraderie, particularly for younger workers who at the beginning of their careers need to benefit from personal, up-close experience with their more senior colleagues?

The noble Lord raises an important point. I think most of us in your Lordships’ House benefited from being in workplaces so that we could be mentored and learn from people who are more experienced—I definitely do every day in your Lordships’ House. In terms of making sure that people are working in the office, the easiest example for me to give is the Civil Service. Civil servants are now required, as the previous Government established, to work 60% of their time in office environments to ensure that institutional knowledge is passed on from new starters to those more experienced but also for those more experienced to learn from new approaches to the world in which we live.

We heard what the Minister said about working with the unions. Last month the FDA Civil Service union published its findings that almost two-thirds of the staff it surveyed felt that having to work in the office three days a week decreased their productivity. Will the Minister confirm whether the FDA’s findings tally with the Government’s own official analysis of the impact of the three-day in-office rule?

My right honourable friend in the other place Pat McFadden has been clear that we want to ensure that people are working in the office. We genuinely believe that there is social capital developed from having office-based approaches, and we are committed to retaining 60% of staff in the office during their contracts. We should also reflect on the fact that one of the opportunities that this has given the state is that we have been able to consolidate the estate, one example of which is 1 Victoria Street, which was recently sold, leading to annual savings of £30 million. This gives us an opportunity in terms of hybrid working but also to ensure that we are getting value for money for the public purse.

Does the noble Baroness agree that her impact in the Division Lobby would be much decreased if she was online? Does she also agree that in important meetings the impact of everyone being in the same room is much better than when part of the meeting is online? Does she further agree that we should apply that standard to Select Committee meetings in this House?

My Lords, I am not brave enough to answer the final point. As for my performance in the Division Lobby, I think most noble Lords have now experienced that. I can either apologise or be grateful for it. In terms of online working and how we use technology, personally, I benefit from sitting in the same room during meetings; I definitely absorb more. But noble Lords will be aware that I also do a great deal of work with the Northern Ireland Office and all our meetings have to be hybrid because of where people are. That is the case for most of us who are operating in government. Our officials are spread, so to make sure that we hear voices from our nations and regions, it is important that we operate a variety of different technologies.

My Lords, returning to the earlier question about skills and training, will my noble friend talk to her noble friend on the Front Bench and to Pat McFadden and Georgia Gould in the Commons about re-establishing a new form of civil service college, which could be done with a confederation of universities at a fraction of the price that was going to be charged by EY until this Government stopped it back in July?

My noble friend knows how inordinately fond of him I am, and I am aware that it is always a bad idea to disagree with him. On that basis, I will have all those conversations.

Does the Minister agree that there is a big difference between those civil servants who are working as researchers or analysts and those who are public facing; for example, in HMRC, the Passport Office and the DVLA? She will be aware that HMRC has underperformed in terms of answering telephones and dealing with the public. Can she tell the House how it is getting on at the moment?

I thank the noble Lord for his question. He is right to raise it. In 2023-24 HMRC answered only 66.4% of phone calls when customers wanted to speak to an adviser. I can update the House that, according to the most recent figures we have, in quarter 3 of last year handling was 85%, so we are making significant advances. One of the things that has been most effective is that we are now giving the majority of people an answer on their first call and 80% of customer correspondence is now being issued within 15 days.

My Lords, the Select Committee on Home-Based Working, of which I am a member, is receiving evidence from private sector employers that they are looking at innovative ways to measure productivity, but more importantly, to see what happens in the kind of telephone call the Minister has just referred to, because accurate information is not always given. What plans do the Government have to measure productivity in a more sophisticated way for public sector workers working from home?

The noble Baroness raises an important point. The Government are currently reflecting on how we should do it. The House of Lords Select Committee on Home-Based Working has a call for evidence which closes on 25 April, and we look forward to seeing its report in November to reflect on its recommendations.