Catering and Retail Services in the House of Commons - Administration Committee Contents


4  Managing the service

Subsidy and savings

32. Like many workplace catering operations, the House service is subsidised. Last year, 2009-10, the subsidy—the difference between the revenue raised from sales of food and other goods and the cost of purchasing the goods and staffing the service—amounted to £5.7 million.[20] The subsidy ratio—that is, the amount of subsidy as a proportion of the total cost of running the service—has been significantly reduced over the past 10 years.

33. The present subsidy does not include all the costs that a commercial catering operation would expect to cover. The departmental trading account does not bear the cost of capital works, maintenance, furnishings, utilities or accommodation. Those costs are largely met from the budget of the Parliamentary Estates Directorate. We shall later discuss whether all or parts of the service could or should be provided by private operators rather than an in-house service, but note in passing that both the amount of the subsidy and the fact that it does not include all costs that a contractor might be expected to bear could be a substantial bar to finding anyone interested in taking services on.

34. The last management review of the services provided by the House, conducted by Sir Kevin Tebbit, former Permanent Secretary at the Ministry of Defence, concluded that some level of subsidy was probably necessary and justified. "For three and half days per week, thirty four weeks per year when the House is sitting, there is a need to provide a full service, while at other times the customer base is greatly reduced. The problem of maintaining an infrastructure to cater for peak demand, but which is under-used for the rest of the year, inevitably adds to the overheads. The need to provide special services exclusive to Members, even though take-up may be limited, is a further factor".[21]

Staffing the service

35. The principal reason for the losses made by the service is the cost of staffing it. Price levels at present and gross profit percentages achieved in individual outlets—that is, the difference between the cost of purchasing goods and the price at which they are sold—are broadly in line with those in similar outlets in a variety of public and private locations. What is a long way out of line is the cost of staffing the service: where an in-house or commercial coffee shop might expect the staff cost to sales ratio to be between 20 per cent and 25 per cent, the staff costs of the Despatch Box in Portcullis House—the only profitable outlet on the Estate—amounted to 51 per cent of takings in 2009-10. The problem is far worse in most of the House's cafeterias and restaurants: in most, the cost of staffing is greater than the revenue raised from sales, and in the worst case, the cost of staffing the service is six times greater than revenue raised.

36. Oliver Peyton, Chairman of the private sector catering company Peyton and Byrne, told us that the industry average for labour costs as a percentage of takings was between 28 and 32 per cent: individual outlets within the Commons' service vary considerably, but the headline figures are that it took £8.278 million in sales in 2009-10 and spent £8,948 million on staff.[22] In other words, staff costs alone, before the cost of goods, supplies, cleaning, HR and finance have been added in, amounted to nearly 108 per cent of sales.[23] The Commons staff cost to sales ratio is exceptionally high, and would be viewed as a key area of focus when delivering any cost reduction or efficiency programme in any catering business. Only nine of the 25 individual earnings areas on the Estate achieve sales that are higher than their staff costs. The odd working hours of the Commons raise significant challenges in running it, but it cannot be sustainable to staff the service at three times the proportionate cost achieved in commercial operations.

37. Although this position is neither good nor sustainable, it is fair to point out that it represents a significant improvement on the past, and that the managers of the catering service have been gradually moving it in the right direction. The Director of the Catering and Retail Service told us that there has been over the past two decades a steady reduction in staffing levels, even as demand for meals and snacks was nearly doubling: "19 years ago when I started here, we had 340 staff producing about 4,000 meals a day just here in the Palace and 1 Parliament Street. We now provide over 8,000 meals a day. We also have Portcullis House and 7 Millbank, and there are 280 staff. So we have made quite sizeable increases in our productivity and at the same time reduced very considerably the number of staff".[24]

PAYING THE STAFF

38. There is a persistent and unpleasant myth, even among Members, that staff costs are so high because a substantial number of catering staff earn very high wages. We are happy to dismiss that idea by publishing the following table:
Table 2: Pay and grading in the Catering and Retail Service
No. of Posts GradeJob Titles Salary Range
1SCS1A Director of Catering & Retail Service £95,000-£100,000
1A1 Executive Chef£56,584-£74,270
1A2 Operations Manager £46,071-£61,255
2CGA1 Senior Sous Chef, Pastry Chef £37,607
8CGA2 Sous Chefs, Banqueting Weekend Duty Management £33,270
4B1 Food & Beverage Managers, Head Chef, Purchasing & Stores Manager £34,643-£42,401
6B2 Catering Managers, Reservations Manager, Hospitality Manager, Business Support Manager £29,786-£41,601
6CGB Junior Sous Chef, Chief Steward/Back of House Manager, Butcher, Banqueting/Principal Floor Manager, Headwaiter £28,207
11C Asst Catering Managers, Asst Retail & Catering Manager, Banqueting & Events Coordinators, PA to Director, Kitchen Coordinator £22,579-£29,330
19CGC Senior Chef de Partie, Cafeteria Supervisor, Head Linenkeeper, Head Storekeeper, Banqueting/Dining Room Supervisor £24,590
2D1 Administration Assistant, Purchasing Assistant £19,198-£24,839
42CGD1 Goods Receiver, Cellarkeeper, Storekeeper, Chef de Partie, Stillroom Supervisor, Souvenir Shop Supervisor, Senior Bar Attendant, Senior Room Service Assistant, Deputy Cafeteria Supervisor, Assistant Chief Steward, Catering & Retail Supervisor £21,697
62CGD2 Storekeeper, Demi Chef de Partie, Bar Attendant, Dining Room Waiter/ess, Assistant Linenkeeper, Barista, CaféBar Assistant, Souvenir Shop Attendant, Stewarding Supervisor, Evening Shift Leader (7MB) £19,598
100CGE Cafeteria General Assistant/Cashier, Kitchen Steward, Sotres Porter, Room Service Assistant, Linen Steward, Retail Assistant £17,554
21Commis Commis Chef£16,174-£17,228

Source: Catering and Retail Service

39. While the Director of Catering, who manages a staff of 286 and a budget of £14 million, earns up to £100,000 a year, the table clearly displays how thin the senior management structure is within her department. Only two of her staff, the Executive Chef and the Operations Manager are graded within the House's senior management structure. The senior managerial salaries in the service are in line with comparable posts externally.

40. More than 94 per cent of the department's staff—269 of the 286 staff listed—earn less than £30,000 a year, and about 185 of them earn less than £20,000. Within the House service, catering staff are among the lowest paid; we regret that some of the submissions we have received have suggested otherwise and glad to dispel any ignorance on that point.

41. That said, the House's catering staff are, on average, better paid than similar catering service workers in the private sector. All are paid above the defined London Living Wage of £7.85 an hour, which is not common in the private sector. In addition, some associated conditions are more beneficial than would be the case in most private sector organisations.

42. We would expect the House to set an example as an employer and have no desire (or, indeed, power) to influence the pay and conditions of some of the lowest-paid staff of the House. Free meals are common enough in catering; late-night taxis for staff who serve us and who remain in the building at least an hour longer than we do provide security and enable staff to go home after public transport ceases to run; and providing decent pensions for comparatively low-paid staff is a sign of good employment practice. We believe, however, that some staffing efficiencies, greater flexibility in contracts and improvements in customer service could raise productivity without any downward pressure on individual wage levels.

STAFFING EFFICIENTLY

43. If the target of reducing the subsidy by 50 per cent is to be achieved, staffing costs will have to be cut, and that means a reduction in headcount. Savings proposals have been made to us by the Catering and Retail Service, and we shall come to each in due course. A House-wide voluntary severance scheme has also been set up, and some staff reduction has been achieved as a result of that.

44. Reductions in staffing costs may be found in several other ways. First, a long-term combination of low turnover and insufficiently flexible contract arrangements appears to have raised difficulties with staffing some areas of the operation, particularly in the decade or more since Wednesday and Thursday evening sittings of the House became rare and the House limited its Friday sittings to only 13 a year. The Director of the Catering and Retail Service told us that a third of the workforce is today employed on four-day week contracts because of the concentration of most demand into the Monday to Thursday period.[25] That leaves approaching 200 staff still on five-day week contracts, largely designed for another era.

45. In particular, there appears in the past to have been a lack of flexibility about where certain staff would work, meaning that, for example, a comparatively empty dining room would have waiting or kitchen staff doing little or nothing as they waited for customers, while another busier room might be under pressure. All four of the witnesses we met who work in the private sector identified the ability to move staff around to fit periods of peak and low demand as crucial to the success of an operation. As Oliver Peyton put it: "in a venue like, let's say, Inn at the Park [...] during the winter the turnover plummets to a shocking level, and we would tend to move those people into our other venues. We have a fluidity of people so that, as it gets quieter, we're already starting to move them around. We would never allow ourselves to be in a situation where you have people being paid for keeping a space empty. It's just not the real world".[26]

46. Staff scheduling tools are available to assist with maximising staff productivity. Although the operation of the dining rooms means there is some unpredictability in how staff rotas are organised, technology enables the identification of patterns across time which could result in greater flexibility and responsiveness from staff.

47. Perhaps because conditions for staff are better than in the market sector, turnover has historically been low in the Catering and Retail Service. In response to our predecessor Committee's Report of 2005, the House of Commons Commission said that it was "proud" that turnover was low. None the less, it acknowledged that low turnover can raise problems: "In particular, it is understandable that staff who have been carrying out the same job for many years without exposure to new ways of doing things may find it difficult to adjust when changes are implemented".[27]

48. In the intervening six years, turnover has not remained low in all areas. The Executive Chef, Mark Hill, who took that post four years ago, told us that turnover had increased in the kitchens and that the chance had been taken to introduce new flexibility in working: in short, the chefs, unlike some waiting staff, are not tied to particular kitchens for long periods, or in some cases for their careers. Mr Hill has also sought to encourage ambitious chefs to gain experience across the range of services that the Commons provides, a variety of opportunity which he described to us as one reason he came here from the contract catering sector. Constant churn of staff raises its own difficulties, but Mr Hill told us he seeks to strike a balance between retaining staff and encouraging innovation and ambition. It is encouraging to hear that chefs trained by the Commons over the past decade have departed for some of London's best known high-class venues and that many have competed successfully at a high level in catering competitions. Those facts imply a high standard of training and the pursuit of excellence.[28]

49. There is likely to be more turnover in the near future as the savings programme takes effect, and decisions were taken on voluntary severance as our Report was being completed. The Director General, Facilities suggested that some long-term flexibility difficulties might be solved by this means; we would rather that they had been more actively managed in the past, and voluntary redundancy, however fortuitously timed, should not be seen as the ideal way to manage problems out of the system. The Director General, we are glad to note, also said that it would be unfair to blame the workforce for any long-term difficulties: "Management have responsibility for the efficiency of organisations".[29]

In house or outsourced

50. The Catering and Retail Service is provided entirely in house. Our predecessor Committee six years ago invited the House of Commons Commission to identify reasons why parts or all of the operation should not be contracted out in order to deliver a better quality of service and more value for money.[30] The Commission rejected the recommendation, arguing that the House could lose the knowledge and experience of its staff and that there would be no easy way to revert to an in-house operation if outsourcing proved unsatisfactory. In particular, it argued: "An incoming contractor would only be interested in taking on the business if there was deemed to be sufficient scope for profitability within the operation. […] the need to maintain profitability might in time lead to compromise on service levels. […] There is no such conflict when the service is provided in-house".[31]

51. Sir Kevin Tebbit, too, in his 2007 review of the House's management and services considered outsourcing unlikely to work for the House: "In practice […] the limitations imposed by the nature of the Parliamentary environment—with peaks and troughs of demand, restrictions on the client base and entitlements to dining rights in some outlets—would be constraining factors on a private sector operation, as much as they are on the present in-House management. It is most unlikely, therefore, that an outside contractor could provide the existing level without a similar subsidy, especially as there would be a need for a profit margin. Otherwise, any benefit to the contractor could be achieved only by compromising service and quality levels".[32]

52. Much has changed since then in both the parliamentary environment and the wider economy. Over the intervening period, contracted-out services have become more common than in-house provision in organisations broadly comparable to the Commons, although none runs for the full range of hours peculiar to the Commons. The National Assembly for Wales provides breakfast and lunch time cafeterias, a coffee shop, two Members' Tea Rooms and a restaurant, and a public cafeteria. Its operation is contracted out.[33] The Northern Ireland Assembly uses an external contractor to provide services including a restaurant for all staff, including Members, and separate Members' restaurant and bar.[34] The Scottish Parliament contracts out its catering service and has a staff restaurant, a coffee bar, a Members' restaurant and bar, and a public cafeteria. Members have priority booking for Members' facilities, but access to all facilities is open to all users of the Parliament building.[35]

53. Of Government departments that supplied us with information, five now contract out their services. Another has just closed its service, and the seventh never had one.[36] Most of those that contract out provide no subsidy to the external caterers, although the costs of rental, utilities and maintenance, which a commercial high street operator would expect to cover, are paid by departments rather than contractors.[37]

54. Although the Commission and Sir Kevin Tebbit argued that private sector operators might find it difficult to run the Commons' services at a profit, neither conducted any market testing to find out whether the private sector itself thought so. The Director General of Facilities told us that the House Management Board believed that the time had come actively to test the proposition as the House seeks to reduce its Administration Estimate: "redesign work will examine whether Catering and Retail Service functions, either alone or in conjunction with other hotel type services, such as reception staff, attendants, porters and our in-house cleaning, should be subject to a market testing exercise".[38]

55. Several witnesses from the private contract catering sector were cautiously optimistic that a Commons service could be run cost-effectively, albeit without their having been given access to any financial or staffing information. Oliver Peyton made the private case most strongly, focusing on quality of food and service, and on matching staffing to demand. He also made the case in principle: "What operators like the people you've been seeing bring to the table is their own sense of commerciality. I have yet to see a case where that isn't substantially better than what happens in house. We wouldn't exist if you were better […] People always put obstacles as to why you should or shouldn't do this. I think a commercial operator is going to come in; he's going to work with you to deliver the solutions you need, I'm sure to a higher quality and to a better service level than you currently have, because it's the nature of the beast. It's in our blood".[39]

56. Like the Commission six years ago, we doubt whether the House's catering operation as currently configured is likely to prove attractive to any commercial operator, no matter how valuable the House of Commons brand might be. We do not, however, any more than the Commission, know that this is so, because no significant market testing of the possibilities has been undertaken. While the peculiar nature of the parliamentary timetable and security demands mean that it is highly unlikely that staffing costs could be reduced to commercial levels, we consider that the current level of staffing cost and management cost to income is excessive and represents an unacceptably high cost to the taxpayer, especially at a time of spending constraint in all public services. We urge the Commission and the Board of Management to take positive steps in the near future to address this issue and recommend that progress be made by 31 December 2011 and a report made back to this Committee by 31 March 2012 on whether a process to outsource the service should commence.

Staff efficiencies

57. Two more points are worth making about where staff-related efficiencies ought to lie. First, HR and finance costs borne by the Catering and Retail Service are unusually high at close to 7 per cent of total annual sales in 2009-10.[40] This figure is far higher than the 2 per cent normally forecast in the commercial sector. HR and finance costs attached to the House's Catering and Retail Service appear to be three times the average expected in the commercial sector. We recommend that steps be taken by the Department of Facilities to find efficiencies in that area.

58. Secondly, the costs of cleaning are also out of line with commercial practice: cleaning costs were 6.6 per cent of total annual sales, which is considerably higher than the 2 per cent achieved in the external market.[41] The Director of the Catering and Retail Service told us that part of the reason for this is that all cleaning is done by the House's contract cleaning staff. She proposed that this cost be reduced by an estimated £110,000 from 2012-13 by redrawing staff contracts so that light cleaning duties are performed by her staff rather than contract cleaners: "Many of the light cleaning duties carried out by the contractor (such as dusting of furniture, carpet vacuuming, cleaning down of display cabinets and low-level cleaning in kitchen areas) are commonly carried out by catering staff in other organisations".[42] Due negotiation will be required to alter contracts, which explains why the department does not expect to introduce this saving until 2012. If it can be done quicker, it should be. We recommend that the Department of Facilities seek to save £110,000 a year by absorbing light cleaning duties into Catering and Retail staff duties.

Gross profit levels

59. Quite apart from staffing, the gross profit levels attained in individual outlets have a significant impact on the amount of subsidy required to run them. Gross profit is the difference between the price the House service pays for its goods and the price at which it sells them to its customers. With some significant exceptions, most outlets on the Estate achieved in 2009-10 gross profit levels below or within the lower range of what would be expected in comparable outlets elsewhere. The price rises subsequently introduced from August 2010 are likely to reduce the difference to a substantial degree.

60. We were surprised to note, however, substantial disparities in the gross profit levels obtained in different outlets, and in particular to note that cafeterias used principally by staff of Members and of the House take more in gross profit than those used primarily by Members and journalists. For example, before the price rises, gross profit at Bellamy's was 35 per cent and at the main cafeteria in Portcullis House 33 per cent. By contrast, the Members' Tea Room gross profit was 28 per cent, and that for the Moncrieffs cafeteria, mainly used by members of the Press Gallery only 21 per cent.[43] In other words, the gross profits obtained on prices charged to staff using Bellamy's or the Terrace cafeteria were about a fifth higher than those charged to Members in the Tea Room and about half again higher than those obtained in Moncrieffs. Since differential staffing costs play no part in the relationship between the price at which goods are purchased and sold, it is hard to see why such substantial differences should obtain, and of deep concern that it is our comparatively lowly paid staff who pay the highest margin. The new benchmarked prices may have ironed out some anomalies, but we recommend that steps be taken incrementally to even out disparities identified in gross profit levels in outlets that are similar in style of provision and purpose.

Prices

61. Last year, the House of Commons Commission decided on substantial price rises, bringing prices in the various outlets across the Estate into line with externally benchmarked comparators. The price increases are expected to reduce the subsidy by £1.267 million in a full year and by £500,000 by the end of March 2011.[44]

62. By December, increased revenue from sales amounted to £480,000 putting the service well ahead of target and on course to achieve the expected full-year reduction in future, albeit with the number of transactions recorded at the tills falling.[45] The sharp increase in prices has, however, caused considerable criticism among users of the service. Members are discontented with the new pricing structure in the Members' Dining Room and rises in prices in other Member-related facilities.[46] Many staff of Members and of the House believe that they have been penalised because the Commission, in the aftermath of the expenses scandal, sought to reassure the public that MPs were not receiving 'perks'.[47] External organisations, particularly charities, complain that banqueting prices have risen so far that they can no longer afford to host events here. Finally, and most worryingly, the statistics we have received suggest that, particularly in areas used mainly by the staff of Members and the House, people are no longer using the service as much as they did, with the number of covers recorded significantly down.[48]

63. One preliminary point needs to be made before we consider what the current price increases have entailed. Simply, there is some confusion about the related but not identical concepts of subsidy and cheapness. Many of the submissions we have had have suggested that the new prices provide profit: they do not: they merely reduce the overall level of loss. Before the price rises, some tariffs charged in the House were indeed cheaper than might be expected on the high street, particularly the prices charged in bars. The price rises reduce cheapness; but they do not in any way come close to putting the Catering and Retail Service into profit.

64. The new prices were agreed by the House of Commons Commission last June, not long after the general election, and before Member Committees, including our own, were set up and able to be consulted. This is to be regretted. The new prices were based on benchmarking in various comparable external organisations. The Director of the Catering and Retail Service told us that staff restaurants had been compared with those in government departments and the other UK parliaments and assemblies, that bar prices had been aligned with those in a "competitively priced high street pub chain", and Dining Room prices set approximately 25 per cent below those in "local, mid-market, high street restaurants". Banqueting prices took the highest increase, being brought "into line with prices charged by commercial venues".[49]

65. Among Members, the most controversial price change has been the introduction of a fixed price system in the Members' Dining Room for evening meals. Under IPSA rules, Members (uniquely among user groups) are entitled to claim up to £15 for an evening meal if the House sits later than 7.30 pm, which it routinely does on Monday and Tuesday and regularly does on Wednesday. The Commission's increases included the introduction of a £15 flat rate fee, no matter whether a Member ate one course or three. After we protested that this was unfair and ignored IPSA's phrase "up to £15", the Commission amended the system so that £10 is charged for a single course, a soft drink and coffee, and £15 for three courses, a soft drink and coffee. We have received more complaints from Members on this than on any other aspect of the pricing changes, and on two main grounds. First, it is perceived as unfair both to those who choose to eat little and to the taxpayer. Secondly, it gives the impression of providing an allowance for Members, rather than their claiming for what they actually spent. We recommend that the Members' Dining Room offer a mixture of fixed price and a la carte prices.

66. Members have also commented to us on the substantial increase in prices charged for beer, wines and spirits. In particular, the costs of wine have been raised, with several pointing out that, for example, two glasses of Chablis in the Pugin Room now cost more than £14.[50] Politics is no ordinary profession and is one in which essential networking and the exchange of information have ever been done across a lunch or dinner table. The new bar prices appear, so far as we can tell, to have largely been benchmarked fairly accurately against the comparators chosen.

THE IMPACT ON STAFF

67. Some staff of the House and of Members see the provision of subsidised food as, in effect, part of their terms and conditions. There is a clear perception among such staff that the price rises affect them disproportionately. As many, particularly those employed by Members, earn comparatively low wages, this seems likely to be so. The average salary for staff of Members is around £20,000, and the introduction of new IPSA rules means that many have taken an effective pay cut and that, for example, bonus payments are no longer allowed.[51] At 9 September 2010, almost half the House's staff (889, out of 1,789) were paid under £25,000.[52]

68. As noted, the prices in the cafeterias most used by staff have been benchmarked against those in government departments and the Scottish, Welsh and Northern Ireland Parliament and Assemblies. As comparators, these seem entirely reasonable, although we note that the House trade unions have questioned the accuracy of comparison.[53] The fact that the prices of some items have risen substantially as a result demonstrates that prices were, perhaps, previously too low, bringing considerable benefit to the staff and Members who paid them. Some effort has also been made to restrict increases in the prices of the more essential items—main meals and fruit, for example—while bigger increases have been placed on the less essential—chocolate bars and crisps, for example.

69. What does concern us is that staff appear in some cases no longer to be using facilities whose explicit purpose is to feed Members and those who support them. The following four bar charts represent the number of transactions made in the four cafeterias most used by staff in the three-month period from October to December in 2009 and in 2010.

Table 3: Terrace Cafeteria daily covers: October to December 2009 and 2010

Table 4: Debate cafeteria daily covers: October to December 2009 and 2010


Table 5: Bellamy's Cafeteria daily covers: October to December 2009 and 2010


Table 6: Portcullis Cafeteria, 7 Millbank daily covers: October to December 2009 and 2010


70. A simple glance at all four reveals the same picture—a drop in the number of transactions passing through the tills. This does not, of course, tell the whole story—revenues overall are up even if individual transactions are down, which was, after all, the point of the price increases. And the drop in transactions may well represent no reduction in 'proper' meals purchased: the Director of the Catering and Retail Service told us, it is largely a reduction in "counter lines"—that is, "teas, coffees […] Kit Kats, the bags of crisps, the things that are easily purchased in a retail shop and brought into the workplace".[54] The Director also suggested that even if the number of transactions is down, the number of people using the cafeterias is not, and average spend is, of course, up.[55]

71. None the less, there is persistent anecdotal evidence from Members, staff representatives and the House unions of more staff bringing in sandwiches or food to heat. The Parliamentary Director of Estates has told us that demand for items such as toasters and sandwich makers for use in offices had risen since the price increases were introduced. We have recommended that such items should not be provided because of the associated fire risk, but the fact that staff are asking for them lends substantial support to that anecdotal evidence.[56] We would find it a matter of deep regret if some members of staff felt they had been priced out of facilities whose very purpose is to service their needs. The price rises introduced in 2010 have happened, and some increase in tariff was clearly necessary if the overall subsidy were to be reduced. We recommend that the Catering and Retail Service monitor the impact of price increases on footfall in staff cafeterias and identify means of reclaiming some of the trade from staff that has clearly been lost as a result of prices increasing. We recommend that, until the new patterns of trading have become clear, the Commission consider no short-term further increases in those cafeterias above the rate of inflation.

Quality, value and convenience

Staff loyalty schemes

72. House trade unions and staff representatives have suggested that staff might be encouraged to make more use of the service by a simple staff discount or loyalty scheme. The service provided to aid Members and those who support them in their parliamentary work is open, on the same terms, to various groups who might not obviously fall within that definition—notably, members and staff of the other House, the Press Gallery and civil servants on the Estate to do business for the government departments that employ them. One of the House's chefs, Nick Munting, giving evidence to us in his capacity as a GMB officer, made the point: "I've never understood why we subsidise strangers' food. I do understand why we subsidise our food, but I don't really understand why we subsidise the cost of food for people from the outside who are just visiting".[57]

73. A staff discount or loyalty scheme might pay dividends in bringing back those whom price increases may have discouraged. Unite, the trade union representing more than 400 MPs' staff, suggests that a loyalty card scheme, offering modest discounts, would encourage staff to continue using the Estate's facilities rather than, for example, getting a sandwich lunch at Tesco on Bridge Street.[58] The House's Trade Union Side President, Ken Gall, concurs: " a discount for staff on presentation of a pass; a staff-only restaurant, perhaps; a tiered system of charges for low-paid staff".[59] Such schemes work well in the commercial sector, and have the added benefit of providing data on what it is that users of the service actually purchase. A Dining Loyalty programme could encourage Members' staff and others to use specific locations more frequently through offers focusing on, say, particular dates, special occasions and seasonally available ingredients.

74. There are costs, of course, to any such scheme, both in revenue lost on discounted items and in administering it. It cannot, however, be beyond the wit of modern technology to introduce a distinction between 'staff' and 'non-staff' on the parliamentary pass. We recommend that the Catering and Retail Service introduce a staff loyalty or discount scheme to benefit the lower-paid staff of Members and the House, with the specific intention of encouraging back customers who appear to have been lost as a result of price increases.

QUALITY

75. Opinion differs on the quality of the food offered on the Estate, although the balance among Members, especially among new Members, appears to be that quality is generally good. In the recent survey of Members' services, 76 per cent of those responding were highly satisfied or satisfied with the cafeteria services, but only 66 per cent with the dining room services. The 25 per cent and 34 per cent dissatisfaction rates were, however, higher than the figures achieved for most other services provided by the House, such as security, library or procedural services.[60]

76. On the positive side, Caroline Lucas MP has in particular praised an "extremely high standard of vegetarian cooking", and Jo Swinson MP praised House staff for an increasing and extremely valuable growth in knowledge of provision for people with food allergies, such as nut allergies.[61] On the other side, Laurence Robertson MP suggests that the quality of food provided in the Strangers' and Members' Dining Rooms is of high quality, but that staff sometimes face 'sub-standard' food in cafeterias.[62]

77. The Catering and Retail Service has suggested, as part of its savings programme, that it could reduce costs by about £127,000 annually by reducing quality specifications for some foods, particularly fresh foods. For example, the current emphasis on high animal welfare standards means most pork and bacon can be sourced only or principally in the UK, where recognised welfare standards exist. A reduction in the standard required could enable the service to import more such foods, including from other EU countries. The service itself "would be very reluctant to go down this savings route", and we agree.[63] We reject any proposal to reduce subsidy by lowering the quality standards required for foodstuffs purchased by the House of Commons, particularly in respect of animal welfare standards.

SERVICE

78. There is less satisfaction with the standard of service provided: while many Members and staff praise individual catering staff, there are too many complaints about slow or inattentive service, and it is alarming to discover from previous reports on the catering service that this appears to be a longstanding problem which the service's management should long ago have taken steps to address.[64]

79. Comprehensive customer service training is required to ensure consistency of attitude among staff, and a specialist external company could be employed to deliver it. Greater staff knowledge of practice in the commercial sector could also be achieved by organising more placements in the private sector to broaden customer service skills and knowledge. The department already undertakes some 'mystery shopping', when members of staff from other departments are asked to report on their experience of particular restaurants or cafeterias in return for a free meal, but a more extensive programme could identify areas in which customer service falls short of the standard that customers should expect. As a broad benchmark, incidentally, we believe that anyone using any part of the service should expect the standard of service they would find in the best high street restaurant, cafeteria or coffee bar.

80. We do not intend to cite particular incidents or members of staff, but each member of the Committee has at least one example of when that standard has not been achieved. One of our commercial sector witnesses, Duncan Ackery referred to the 'carrot cake moment', the incident in which a customer given a poor piece of carrot cake forgets all that was good about the service: the point is that service issues need to be dealt with as soon as they arise.[65] We fear that this is not always so in our service: there are too many complaints about service, particularly in the Members' Dining Room where delays can be considerable. This may, in part, in recent times, be to do with the introduction of a new electronic ordering system which appears to have delayed orders reaching the kitchen, but whatever the cause, the management of the service needs to respond more quickly and effectively to complaints about poor service, and to manage poor service out of the system. We recommend more comprehensive customer service training be provided and that members of staff be enabled to spend some time in the commercial sector to update and broaden customer service skills. We support enhancement of the existing 'mystery shopper' programme to enable the gathering of more customer data about the quality of service offered across the Estate.

INTERNAL MARKETING

81. The House's Executive Chef, Mark Hill, told us that custom in individual outlets rises on days when particular meals are on offer.[66] For example, custom in the Moncrieffs Self-Service cafeteria rises substantially on Fridays, when fish and chips are on the lunch menu. Mr Hill suggests that he and his team of chefs could do more to highlight what is on offer, and where, if they had intranet pages of their own which could be updated daily and quickly instead of operating through the centrally provided intranet service, which can be slow to respond. Operations in the commercial sector often use a dedicated section of the intranet or a secure web site. Daily special offers, product information, promotional days and general informative messaging could be communicated to customers on a regular basis and used to attract more people to the catering outlets. We agree with the Executive Chef that much could be done more actively to promote the service and what is on offer in individual cafeterias on different days via dedicated intranet pages under the Chef's own control. We recommend that these be provided to him.

82. Further substantial improvements can be made to marketing and promotion to what is, to some degree, a captive audience. We note, for example, a recent promotion, by poster, of a special two course for £9.95 lunch deal in the Adjournment, and believe that more such promotions would be valuable. We recommend that the Catering and Retail Service review product signage and labelling in each outlet to ensure that customers may make better informed decisions on the basis of price. Improved signage and labelling would also enable the department to tell its own 'good news stories' on the use of fresh seasonal ingredients, healthy cooking techniques and sustainable, organic or Fairtrade produce.

MADE-TO-ORDER SANDWICHES

83. It has been suggested to us that the provision of a made-to-order sandwich service could prove profitable. Certainly, there appears to be some dissatisfaction with the range and freshness of bought-in sandwiches provided in most of the Estate's cafeterias. Sandwiches are made to order in the staff restaurant at 7 Millbank, but experiments in providing similar services in Moncrieffs cafebar and the Strangers' Bar were discontinued when take-up was low and wastage high.[67] The Catering and Retail Service has suggested that the range of facilities available in Portcullis House could be adapted to include a fresh sandwich service, for example. Such services can reduce congestion in busy cafeterias and this type of operation is fairly commonplace in the commercial in-house catering world and the high street. It is, however, quite labour intensive, and labour costs are already at the root of the size of the subsidy.

84. The Atrium of Portcullis House has, partly because it provides via the Debate and Despatch Box the opportunity to hold informal meetings throughout the day, become over the 10 years since it opened, a meeting place for Members of the House and others. Pressure on space within the Atrium can be considerable at peak times—particularly so at lunchtime, but throughout the day, too, at the tables set aside for Member and senior staff business use outside the Adjournment restaurant. We note that the recent Members' survey of services recorded high satisfaction with the Members' Centre among those Members who use it, but we note, too, that it is used by only about 20 Members a day and is considerably more used by Members' staff than by Members themselves. We support the principle of such a service centre for Members, and particularly the idea that PICT should have a presence within Portcullis House so that IT problems can be given speedy attention. We recommend that a made-to-order sandwich service be introduced in Portcullis House, on a trial basis if need be to test demand. Such a service might be provided within an enlarged Debate cafeteria, with a separate queuing system, and some additional tables and seating both within and outside the Debate. This could be done by reducing the space presently occupied by the Members Centre and by restricting that centre to use by Members, as was always intended, and not as an overspill space for additional Members' staff. The sandwich service and a premium coffee bar could be placed in the additional space gained without any need to disrupt or reconfigure the existing Debate service.

VAT EXEMPTION

85. Certain cold take-away food items, such as pre-made sandwiches and boxed salads, are not subject to VAT if eaten away from the outlet in which they are purchased, and this is why, for example, most high street coffee chains offer different prices for such food eaten on or off the premises. The House does not take advantage of this, in spite of the fact that a significant proportion of sales must be sandwiches and other food items that fall into the VAT-exempt category if taken away. Resultant reductions in price for take-away items would make the House more competitive with local coffee shops and supermarkets, a point that could help encourage, in particular, lower-paid Members' staff back into using the service. We recommend that the Catering and Retail Service investigate with HMRC whether VAT exemptions should apply to relevant takeaway food items sold on the Estate, and pass on any saving to those who purchase takeaway items.


20   Ev 55 Back

21   House of Commons Commission, June 2007, Review of Management and Services of the House of Commons: Report by Sir Kevin Tebbit KCB CMG, HC 685. para 248. Back

22   Q 250 (Ev 42) Back

23   These figures are based on costs once central costs have been allocated to each individual venue, and they also include pension costs. If pension costs are excluded, staff costs amount to about 92 per cent of the revenue raised from sales. Back

24   Q 291 (Ev 49) Back

25   Ev 66 Back

26   Q 255 (Ev 42-43) Back

27   Administration Committee, Refreshment Department Services: Response to the Committee's Second Report of Session 2005-06, 5 June 2006, HC 1146, para 17. Back

28   Executive Chef, private session, 24 January 2011. Back

29   Director General, Facilities, private session, 17 January 2011. Back

30   Administration Committee, Refreshment Department Services, para 132. Back

31   Administration Committee, Refreshment Department Services: Response to the Committee's Second Report of Session 2005-06, para 80. Back

32   House of Commons Commission, June 2007, Review of Management and Services of the House of Commons: Report by Sir Kevin Tebbit KCB CMG, HC 685. para 249. Back

33   Ev w 28 [Note: references to 'Ev w xx' are references to written evidence published in the volume of additional written evidence published on the Committee's websiteBack

34   Ev w 29 Back

35   Ev w 29 Back

36   The Departments were: Ministry of Defence; Department for Education; Department of Health; Ministry of Justice; Scotland Office; Department for Transport; HM Treasury. See Ev w 30-33 Back

37   Ev w 30-33 Back

38   Ev 95 Back

39   Q 253 (Ev 42) Back

40   Analysis of Catering and Retail Service figures provided by Jon Hewett. Back

41   Analysis of Catering and Retail Service figures provided by Jon Hewett. Back

42   Ev 82 Back

43   Analysis of Catering and Retail Service figures provided by Jon Hewett. Back

44   Ev 83 Back

45   Ev 69 Back

46   See Ev w 20-27 Back

47   eg Ev 94-95 Back

48   See tables for the House's cafeterias on pp. 38-43. Back

49   Ev 55 Back

50   Ev w 22 Back

51   Independent Parliamentary Standards Authority, The MPs' Expenses Scheme, HC 501, March 2010. Back

52   HC Deb, 15 September 2010, Col. 1039W. Back

53   See Ev 94-95 and Q 14 (Ev 4) Back

54   Q 271 (Ev 45) Back

55   Q 112 (Ev 20) Back

56   See Administration Committee, notes of discussion: 7 March 2011. Back

57   Q 25 (Ev 6) Back

58   Ev 100-01 Back

59   Q 16 (Ev 4) Back

60   FDS International, Survey of Services 2010, House of Commons, February 2011, p 17. Back

61   Ev w 23 and Ev w 27 Back

62   Ev w 26 Back

63   Ev 78 Back

64   Administration Committee, Refreshment Department Services, para 68. Back

65   Q 183 (Ev 30) Back

66   Executive Chef, private session, 24 January 2011. Back

67   Ev 69 Back


 
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Prepared 10 May 2011