Vertex Call Centre (Dingwall)
Trish Godman (Labour)
The final item of business today is a members' business debate on motion S2M-3473, in the name of Maureen Macmillan, on the outsourcing of rail call centre jobs from the Vertex call centre in Dingwall. The debate will be concluded without any question being put.
That the Parliament notes with concern the issuing of the 90-day notices to the 200-plus workforce at the Vertex Call Centre in Dingwall; notes that the loss of these jobs will have a major impact on this small Highland town; further notes that these jobs have been put in jeopardy by the decision of TheTrainline, a company which has Virgin Trains as its major shareholder, to move the contract outwith the European Union, in spite of Virgin Trains being in receipt of substantial amounts of UK taxpayers' money; supports the campaign of the Transport Salaried Staff's Association on behalf of the call centre workers who are a highly skilled and loyal workforce, and believes that the Scottish Executive should consider what influence it can exert to reverse TheTrainline's decision or assist Vertex in finding a new contract.
Maureen Macmillan (Labour)
I am glad to be able to speak tonight on behalf of the workforce at the Vertex call centre in Dingwall. Most members present in the chamber will know Dingwall well. However, for the record, I will say a few words about this ancient royal burgh, the county town of Ross and Cromarty.
As its name tells us, the burgh was founded by Viking settlers. It once boasted a royal castle as important as that of Edinburgh or Stirling. It is a traditional small town with many independent traders and excellent butchers, bakers, drapers, greengrocers and so on. It has good communications by road, rail and air. It has a population of between 4,000 and 5,000 people and it is situated a dozen or so miles from Inverness.
Closeness to Inverness presents a challenge to Dingwall and other small towns in the inner Moray firth area, which must strive to retain their unique identity. Local shops and businesses depend for their livelihood on people living and working in the town—I use the phrase "and working" advisedly. Evidence that the Environment and Rural Development Committee took on the viability of small towns such as Dingwall showed the need for thriving medium-sized businesses. People shop where they work. If Dingwall became merely a commuter town for Inverness—it is already some way towards becoming that—there is no doubt that local small businesses would struggle to
The call centre in Dingwall was built by Highlands and Islands Enterprise with public money and has been working on the Trainline contract since 1998—first with Cap Gemini, then with Vertex from 2001. There is capacity for 260 employees on a single shift and up to 500 on full shift work.
Vertex is an excellent employer that looks after its employees and pays them well. It is actively seeking new contracts for members of its workforce, whom it regards very highly indeed. The workforce is a cross-section of the community. Young mums come on shift when their children are at school; students at Inverness College work evenings; and those studying further away find vacation work at Vertex. People of all ages and backgrounds are employed there and the workforce is stable. Some have been there since the beginning and half of the staff have been there for more than two years, which is an excellent record in an industry that generally has quick staff turnover. Absence rates at Vertex are low and the staff are educated and well trained.
Why then did Vertex announce last February that the contract would end in spring 2006 and that the work would be outsourced to India? The answer is complicated. Trainline said that it needed to cut its costs substantially. Vertex could accommodate that only by sending the work to its centre in India. Why did Trainline have to cut its costs? It had to do so in response to a demand from the train operators to whom it provides a booking service. Most of Trainline's business is with Virgin Trains and it was principally Virgin Trains that asked Trainline to cut its costs; yet Virgin Trains owns 80 per cent of Trainline. Sir Richard Branson owns Virgin and his company Virgin Trains received £578 million in subsidies from the taxpayer in 2003-04. One has to question what is going on here. It may be perfectly legal, but it is certainly puzzling. Members should compare and contrast the situation with the actions of First ScotRail, which has recently sited its booking service in Fort William—there was no need for it to go elsewhere than Scotland.
There is an issue of social responsibility in respect of a company that is in receipt of huge amounts of taxpayers' money. Sir Richard Branson likes to be thought of as the people's entrepreneur, but that is not how the workforce at Vertex, Dingwall thinks of him. He has been invited by the Transport Salaried Staffs Association, the union that represents the workforce, to come and speak to the Vertex employees to explain face to face why they are
Last February, when the contract decision was announced, it seemed that there would be no real problem in winning another contract. Vertex, Highlands and Islands Enterprise, the workforce and the trade union were all optimistic. However, we are now in December and there has been no good news. I know that Vertex continues to pursue contracts assiduously and that it still feels that it will win one, but I want to know what efforts the Government and Government agencies are making. I want to see the rescue of the Vertex call centre placed at the top of the Enterprise, Transport and Lifelong Learning Department's agenda. The 200-plus job loss is more than a small town should be asked to cope with. We need that employment in Dingwall. I do not want to see the workforce dispersed. Many of those presently employed part time would not find such suitable alternative employment locally.
I ask the Executive to do everything that it can to persuade Trainline to reverse its decision, even at this late stage. If that is not possible, the Executive must pull out all the stops to help Vertex to find a new, long-term, sustainable contract. As I said, the Vertex workforce is loyal, reliable, well educated and trained. It deserves a future.
Rob Gibson (Scottish National Party)
I thank Maureen Macmillan for bringing this debate to the chamber. I believe that there is a strong case for the workforce in Dingwall to have a job after spring 2006 and that the Scottish Executive can help us to ensure that Dingwall and the surrounding area keeps those jobs.
Maureen Macmillan talked about a section of the population that is younger and not hugely qualified, although the people have some qualifications and might already have left the Highlands if the type of call centre job that Vertex offers was not available. The Vertex centre has allowed people to do work that will fit around a family. That is excellent when it is possible.
The call centre in Brora deals with health questions and Highland Council's call centre, which has opened at Alness Point, deals with questions about Highland Council's services. The latter has a public sector requirement and has a strong future. However, the commercial heart of the Vertex operation ought to be thriving. More people are using trains, and more people in different companies are using trains. It is up to us to argue that the kind of work that is done at the call centre should be done in Scotland.
Trying to protect call centre jobs in Scotland could be called economic patriotism, but it is about
I know that there has been development in Dingwall and that many people who work in the call centre have taken out mortgages in the hope of steady employment. That is how we start getting new families and homes into our area. Any threat to that caused by the uncertainties about Vertex must be quashed if at all possible.
Vertex also works in Nairn. The arguments that it makes about the high quality of the workforce there in dealing with accountancy are almost identical to the arguments that are made about Dingwall. It is entirely possible that a high degree of pressure could be put on Virgin to get it to rethink its decision.
Vertex says that it is chasing work, so I wonder why it did not chase the work from First ScotRail a few months ago. I am pleased that there is now a call centre in Fort William, but I wondered at the time whether Vertex might not have been chasing that work and whatever other work it could get from other firms that might want to provide train timetables.
In any case, the arguments are clear. Public money has been spent and we want value for that money and, above all, to retain the young and dynamic workforce in the Highlands. That is the central case for supporting the motion tonight, and I hope that the Government can respond positively.
John Farquhar Munro (Liberal Democrat)
I am delighted that we are debating Vertex in Parliament this evening, and I congratulate Maureen Macmillan on bringing the debate to the chamber.
Job losses in communities anywhere are not a welcome prospect, especially in the remote and rural areas of the country. It is an issue that we should all address with the utmost vigour, and we must try to apply as much united political pressure on a cross-party basis to secure and protect not only temporary employment but, more important, full-time, sustainable occupation without the constant fear of redundancy notices being regularly distributed to loyal employees, as we hear happens so much these days.
The situation that is before us concerns the 200-plus employees of Vertex at its Dingwall call centre. It is a well-established and respected outsourcing service provider with an extensive and influential international client base and has
However, we live in a strange world. We live in an age of balance-sheet control. Vertex's clients are no exception, and are constantly looking for ways to increase profit margins. As a sad consequence, major clients will place their business with the most competitive supplier. If that happens to be in Dingwall, or any of our rural constituencies, we all rejoice. Unfortunately, we more regularly find ourselves facing situations such as that at Vertex in Dingwall, where staff and employers have entered a 90-day consultation period on the possibility of redundancies, which I hope will not require to be implemented.
I am assured that members of Vertex management are endeavouring to attract and secure new clients for their call centre services, and that they are being supported by Highlands and Islands Enterprise, Highland Council and other support agencies to secure and expand the facilities at the Dingwall site. I am encouraged by the fact that, as Mr Gibson said, some months ago a similar situation developed at the Alness call centre a few miles north of Dingwall, but it has survived and attracted new clients. As a result, it has been able to retain all its staff for the foreseeable future. That is good news, especially at this time of year. I am confident, therefore, that if we lend our united, cross-party support to Vertex's management and staff, we can achieve the same success for the company, the workforce and the community of Dingwall.
Mary Scanlon (Conservative)
Like others, I thank Maureen Macmillan for raising the issue of call centre jobs in Scotland, particularly in the Highlands.
It is worth setting the debate in context. There are more than 300 call centres in Scotland, with a workforce of more than 60,000. Despite suggestions two years ago in The Scotsman and elsewhere that Scotland would lose 10,000 call centre jobs, the number of such jobs has continued to rise. As Maureen Macmillan said, many students at Inverness College, including ex-students of mine, work part time, full time and flexibly at companies such as Vertex. The Highlands compares favourably with the rest of Scotland in attracting call centre jobs, mainly because there are no transport costs, but also because of the clarity, warmth and reassuring nature of the lilting Highland voice.
It is important to state that the jobs are under threat due to a contract renegotiation with Vertex's
As a responsible employer, Vertex must follow the consultation process. Indeed, it has set up an employee representative forum to work in partnership alongside the trade union, the Transport Salaried Staffs Association.
Vertex currently employs about 1,000 people in Scotland. One year ago, it relocated jobs on behalf of Vodaphone from Merseyside to its call centres in Edinburgh and Forres, creating 135 and 255 jobs respectively. The company's commitment to Scotland is not in question.
I would like the minister to examine two issues. First, why does Trainline need to go to India to achieve greater operational flexibility and reduce costs? What can be done to make Scotland a more competitive place to which employers can bring jobs? Secondly—this is an important point that has not quite been touched on by other members—when Scottish Enterprise is approached about call centre jobs, does it have a protocol according to which it will instantly notify Vertex so that it can bid for the work and keep the 214 permanent employees in Dingwall? Such communications are crucial. I know that Vertex is doing everything possible to keep the jobs in Dingwall, but it needs the support of enterprise companies throughout Scotland.
As Maureen Macmillan said, many Vertex employees are long serving. Some of them have been there from the start, eight years ago. The staff are highly professional and committed and have a modern approach to business. They have helped to set a trend for call centre jobs to come to the Highlands, taking advantage of a can-do attitude and approach. That contrasts with the average turnover of call centre staff in India, which I understand—according to an article in The Scotsman—is around 65 to 70 per cent.
Trainline highlighted cost as a factor for taking the jobs to India, so I hope that the minister will recognise and address the burdens of higher business rates and water charges and the greater extent of regulation that are faced by businesses in Scotland. I hope that he will consider creating a more business-friendly environment, that he will help to reduce red tape and that he can help to maintain the jobs in Dingwall and attract further jobs to Scotland.
Bristow Muldoon (Labour)
I say "Well done" to Maureen Macmillan for bringing this issue for debate today. Her motion is very similar to one that I lodged back in February. I should declare an interest, in that I am a member of the Transport Salaried Staffs Association and have been since the days when I worked in the railway industry a number of years ago. We should fully acknowledge the key role that Maureen Macmillan and her husband, Michael, have been playing in the Highlands in raising issues about the work in Dingwall that is currently under threat.
I do not want to dwell on the impact on the local economy, because members who represent the Highlands will be able to do so far more ably than I can. The fundamental issue with the jobs that we are discussing this evening is that, effectively, they are supported by the public sector. They exist in order to support Britain's railway network, which is highly subsidised by the United Kingdom taxpayer. As such, the decision regarding the Dingwall call centre must be looked on differently from decisions concerning companies that operate fully in the private sector, without public support. As Maureen Macmillan pointed out, Virgin Trains receives about £578 million per annum of public support to provide rail services to the UK taxpayer. In my view, it is simply an accident of the way in which the franchise agreement was drawn up that the call centre work is not fully part of that franchise.
We should contrast the way in which Virgin proposes to carry out its work through the subsidiary Trainline with the way in which other rail operators are making decisions. Attention has already been drawn to the fact that First ScotRail has decided to set up a call centre in Scotland to support its activities, and one of my former employers, Great North Eastern Railway, continues to run a major call centre in the Newcastle area. If those major rail franchisees, which work under similar pressures to those that apply to Virgin Trains when it comes to their franchise arrangements with the UK Government—or with the Scottish Executive, in First ScotRail's case—can retain call centre work within the UK and thus retain the expertise that exists here, I can see absolutely no reason why Virgin should not be able to do the same.
Maureen Macmillan referred to Richard Branson and his image as the people's entrepreneur. If he wants to maintain his positive public image in the UK, he and his company should show greater loyalty to employees who have served that company well over many years.
Eleanor Scott (Green)
I thank Maureen Macmillan for lodging the motion, whose sentiments I agree with. However, I hope that I am not going to sound negative, because some of what I have to say is a bit negative.
I should declare a past interest in that my son worked for Vertex for a year when he left Dingwall Academy. The job suited him very well because he could work in the evening and did not have to get up in the morning. He has since moved on.
I acknowledge the gap that the closure of the Vertex call centre will create in a place the size of Dingwall, given the number of jobs affected. I agree with the view that it is, to say the least, irksome that a company in receipt of public money can close the call centre. I am not sure what redress we have in such a situation—perhaps the minister will make that clear.
I have concerns about call centres in general. Mary Scanlon said that there are 300 call centres in Scotland and that the number of jobs in call centres is increasing. I think that call centres were rather seized on, particularly in the north, as a good thing that could provide employment. However, there is a degree of overprovision. The fact that call centres can operate anywhere has both strengths and weaknesses. It means that they can operate easily in the north of Scotland, but it also means that they can up sticks and go to India, as we have seen, or anywhere. It could be a case of Thurso today, Madras tomorrow. We have to acknowledge that worrying fact. We should not invest too much in call centres, because they might be here today, gone tomorrow.
There are examples of enterprise companies going overboard in seizing on call centres as a good thing and a possible employment prospect in our areas. I know of one call centre that was built in Golspie four years ago. It has 50 seats in it but has never been occupied—it is just sitting there. I know about it because it is next door to the premises of a community recycling group, which is strapped for space and which has been casting covetous glances at the premises occupied by the call centre. It is not allowed to use the premises, because the building houses a call centre, even though it has never been occupied.
There is overcapacity in the number of premises for call centres. To pick up on something that Mary Scanlon said, if call centre jobs were to come to the area, we would want existing establishments to have first go at them. We do not want to build one new centre while another is losing jobs. There is an issue about capacity and overreliance on an unstable sector to provide our jobs in the north.
There is anecdotal evidence from India that call centre jobs are not benefiting Indians, because they are being filled by backpacking westerners. That relates to what Mary Scanlon said about turnover.
Call centres are probably here to stay, even though some of us do not particularly enjoy getting the call centre response from someone who is clearly not in the area in question, such as when we try to book a train ticket to wherever and the person in the call centre clearly does not know where that is. Call centres are here to stay, but that does not necessarily mean that they will stay here.
I hope that Vertex can be successful in either keeping its existing jobs, which would be ideal—I agree with Maureen Macmillan that there is a skills base that it would be crazy to lose—or finding some other client, which would be the second-best option.
I get the feeling that perhaps the call centre boom has peaked. I am not convinced that call centres will be the answer to our employment problems in the north. They looked attractive, because they could be operated anywhere, but that means that they are liable to go at the drop of a hat. We cannot build our economy on the basis of people answering the phone.
I wish the Vertex people well. I hope that they can get new work or keep the jobs that they have, but I am not optimistic about the future of the industry. I am sorry to be so negative.
Jim Mather (Scottish National Party)
I congratulate Maureen Macmillan on securing the debate. The significance of the contract is enormous in Dingwall. For all the reasons that she eloquently stated, I join her and John Farquhar Munro in their call for united, cross-party support, which is entirely appropriate.
The concept of social responsibility must be a reality in this Scotland of ours, rather than just rhetoric in corporate annual reports. Social responsibility should also be an important part of the future criteria for grant and franchise applications. However, it seems that we are being told that a major contract, which has been fulfilled reliably by a loyal, high-quality staff with low turnover, is not to be retained. We seem to have reached a position where we now have cause to pause and consider how we might do things better in the future. We need to consider how, in the longer term, we can make such jobs more robust and more rooted in place.
I am aware that HIE is working in the interim to find other call centre clients. It tells me that it has
In the meantime, there is a strong case for Government to consider a proper civil service relocation policy for Scotland. We should capitalise on what we have seen happen in Ireland, where the relocation policy has involved volunteers at sub-departmental level. Such a policy in Scotland could be enormously beneficial not just for the receiving communities but, in the wider context, because it would balance opportunity and economic activity across Scotland and create further scope for growth in current hot spots. Such a plan is operational in Ireland and works significantly well.
At the moment, there is a strong case for asking for a feedback loop from HIE and the Executive to encourage the unions, employers and staff to work together to create a stronger business model that looks beyond the more simplistic call centre services. We perhaps need to drill down to see whether our call centres can provide a more detailed service that is more oriented towards the selling process. Many customers form their opinion about a company when they first pick up the phone and make that phone call. I know that the experience that people have of contacting call centres across the Highlands, especially the one in Dingwall, is by and large positive. We should trumpet that fact.
The challenge in Dingwall could be an opportunity from which we all learn. Tonight, we have solid cross-party support; we are united in encouraging all concerned to go the extra mile. Our focus is very much on ensuring that Vertex closes a deal that will guarantee those jobs. If such a deal is not forthcoming from the company's own resources, we need to ensure that it leans on HIE, which is patently keen to go the extra mile and deliver for the Vertex staff. I thank Maureen Macmillan for raising the issue.
Allan Wilson (Labour)
I join colleagues in congratulating Maureen Macmillan on securing tonight's debate. Although the debate has touched on not just the Vertex call centre but call centre jobs more generally, and the local economy in Dingwall, I should stress at the outset that, as we are talking about people's lives, our
I start by noting the call and contact centre industry's importance to Scotland, which has been remarked on by several members. Over the past few years—contrary to some prophets of doom—the number of jobs in contact centres has continued to increase. The industry now accounts for 47,000 jobs in Scotland—I do not know where Mary Scanlon got her figure of 60,000. Across the board, employment in the call centre industry has increased by more than 4 per cent in the past four years. That has been helped by significant investments during this year by O2 and Dell, which announced the creation of, respectively, 1,500 and 850 contact centre jobs in Glasgow. Again, I suggest to Mary Scanlon that that is testimony to the favourable business environment that the Executive has created in Scotland.
As others have said, the contact centre industry is still relativity young and the market is competitive. Such an environment might produce casualties as well as success stories. Naturally, I am concerned about the 90-day notices that have been announced by Vertex and about the possible job losses for the staff in Dingwall. It is clear that it has been an unsettling time for all those who are affected, not least because it has been going on for so many months.
However, I know that the company has used that time to its advantage and that it has been working hard to obtain new contracts and secure the jobs. It has already managed to secure work for the 135 people who are affected in Edinburgh. Although I cannot say anything concrete at present, I understand that Vertex continues to seek replacement work for the Dingwall staff. The Scottish Executive's development agencies, Highlands and Islands Enterprise and Ross and Cromarty Enterprise, have given the company every assistance, including support with training packages. We hope that those efforts will bear fruit and that the employment in Dingwall will be sustained.
In the worst case scenario, if no contracts are forthcoming and the remaining Vertex staff have to be made redundant, public sector support mechanisms are available through local partnership action for continuing employment—or PACE—teams to help people back into work. Ross and Cromarty Enterprise and Jobcentre Plus are ready to work closely with Vertex and the staff on training and assistance in finding alternative employment. However, as I said, I hope that we will be able to announce soon that such assistance will not be needed.
I do not agree with the suggestion from Rob Gibson—and possibly from Jim Mather, although I
To safeguard jobs for the long-term benefit of Scotland, we have to compete on the basis of our strengths and where we can add value. It is perfectly legitimate for the Royal Bank of Scotland to determine, for sound commercial and other reasons, that it wants to concentrate its call centre work in Scotland and it is perfectly legitimate for GNER or other companies to do the same. For the record, Vertex is contracted to carry out work for Trainline, which is owned by the travel companies Virgin and National Express. National Express owns about 14 per cent of Trainline. Members mentioned the £578 million subsidy from the Strategic Rail Authority to Virgin Trains in 2003-04, but none of that money went into supporting Trainline. Trainline is a wholly independent commercial venture that has received no Government support, either financially or in kind.
The Scottish Executive's commitment to creating the right business environment to attract, retain and grow firms is fundamental to moving up the value chain. Scotland's strength in the call and contact centre industry lies in the quality of our staff. More than 80 per cent of contact centres say that the main reasons why they remain in Scotland are labour availability and our skilled workforce. However, we must acknowledge that, as products and markets develop over time and the focus shifts to lower-cost and lower-value services, that might lead to some call and contact centre jobs being relocated outwith Scotland. That is why it is important that we focus on the high-quality, technologically advanced component of the industry.
Vertex continues to play a key role in the centre for business process outsourcing, which is based at Alness in Easter Ross. The centre is a collaboration between the HIE network, the University of Strathclyde, Vertex and industry body the Call Centre Association. The centre is the UK's first research unit on call and contact centres. It is interesting that the industry body locates its headquarters here in Scotland, in Glasgow. The centre is designed to analyse industry trends and anticipate developments with a view to making long-term employment in the UK, and in the
In the past year, with the support of regional selective assistance, we have secured several contact and call centre operations for Scotland. As I said, Dell opened a centre in Glasgow that will create 850 jobs over three years. Huntswood CTC plans to create up to 355 jobs to provide outsourcing services to the financial services sector at its site in Bellshill. Other operations include 465 planned jobs at beCogent in—dare I say it—your constituency, Presiding Officer, in Erskine; 180 jobs at Excell Contact Centres in Paisley; and 250 jobs at MGt in Fife. The list goes on. That is how I believe fundamentally that the industry is developed. We are very much on the right lines.
Mary Scanlon (Conservative)
I will be a bit parochial. I realise that the list that the minister read out was not exhaustive, but all those facilities tended to be in the Scottish Enterprise area. I ask again whether Scottish Enterprise has a proper protocol to ensure that if it knows that a company wishes to establish a call centre in Scotland, that company knows that Vertex is looking for such a contract.
Allan Wilson (Labour)
What Mary Scanlon says is fair enough. I quoted some examples, but I could easily quote others from the Ross and Cromarty Enterprise area, such as Cap Gemini in Inverness. That shows that we have the ability to attract business, which is not limited to the central belt and extends into more rural areas.
The debate has been interesting. I acknowledge the worries of Vertex staff and the whole Dingwall community. However, the local economy remains strong and we have in place specific measures to ameliorate the effects. I hope and am confident that the efforts that Vertex is making will bear fruit and that jobs will be secured in the Dingwall operation. Through local agencies, including Highlands and Islands Enterprise and Ross and Cromarty Enterprise, we stand ready to assist in any way that we can.
Meeting closed at 17:43.