London firm paid £200K for Sheffield ‘Northern Powerhouse’ office closure plan

The Government has announced the closure of the Dept of Business, Innovation and Skills based at 2 St Pauls Square in Sheffield

The Government has announced the closure of the Dept of Business, Innovation and Skills based at 2 St Pauls Square in Sheffield

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The Government’s ‘Northern Powerhouse’ department planning to shed almost 300 jobs in Sheffield and move them to London spent £200,000 on consultants to deliver a report on making cutbacks.

The Department for Business, Innovation and Skills - which has responsibility for helping deliver the Northern Powerhouse concept - announced this week it is shut its Sheffield offices in a ‘cost-saving’ move.

A total of 290 people currently work at the city centre site, with 247 due to remain from April after pre-planned redundancies are made.

The entire office will close by January 2018, with the work done in Sheffield being transferred to London.

It has now been revealed a report that influenced the closure decision which was created by London-based management consultants McKinsey cost the taxpayer £199,000. Government accounts from last August reveal the money was paid to the firm for ‘financial advice’.

The report, which has not been published by the Government, set out the vision for how the department would look by 2020.

Last autumn, an internal consultation document based on the report was leaked and included proposals such as ‘cutting operating costs by 30 to 40 per cent’ and reducing the department’s 80 nationwide sites to around seven or eight ‘centres of excellence’.

The department has confirmed McKinsey’s work for it included looking at ‘operating costs’ but said no McKinsey employees worked directly on its spending review.

Sheffield Heeley MP Louise Haigh said: “I and my fellow South Yorkshire MPs will be demanding to see the business case for the move – which must have been shared with the BIS board before being finalised.

“We will also be demanding to know what the remit for the cost-cutting specialists, McKinsey and Company was and whether it was – as appears – a decision taken in London for the benefit of London at the expense of Sheffielders’ jobs.”

In Parliament yesterday, Labour MP Neil Coyle asked business minister Anna Soubry when the full business case will be published after £200,000 was spent developing it ‘to shut down jobs’.

Ms Soubry said she would ‘make inquiries’.

She added: “I’m afraid difficult decisions have to be made. We take the view this is the best way to spend public money more efficiently and more effectively.”