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Vertex Call Centre (Dingwall)
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
Deputy Presiding Officer (Trish Godman):
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.
Motion debated,
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 The Trainline's decision or assist Vertex in finding a new contract.
Maureen Macmillan (Highlands and Islands) (Lab):
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.
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.
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.
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
(Highlands and Islands) (SNP):
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.
Trying to protect call centre jobs in Scotland could be called economic
patriotism, but it is about time that we told companies that if they receive
public money, they should provide jobs here if at all possible. With the
enterprise network's backing for the building of the premises, there has
been a huge and varied public commitment.
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.
Jim Mather
(Highlands and Islands) (SNP):
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.
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 Deputy Minister
for Enterprise and Lifelong Learning (Allan Wilson):
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 sympathies and concerns go to all the employees whose jobs are
threatened by the current proposal.
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 am not sure whether he subscribes to the same view — that
Scotland should seek to ring fence work for itself or for the United
Kingdom. That is short-sighted and, inevitably, it amounts to protectionism.
Rob Gibson can dress it up as economic patriotism if he likes, but it is
protectionism by any other name. It is counterproductive because it would
inevitably lead to more job losses and it would deter companies from
investing in Scotland. We know that we cannot compete — and nor should we —
against lower-wage economies on lower-value goods and services. That is not
a sustainable position and it is not one that we want to get into.
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 Highlands
and Islands in particular, as secure as possible. When that focus on
developments is put together with the roll-out of broadband to every
community in Scotland — which we promised, which will be delivered by the
end of 2005 and into which we have put public sector investment of £16.5
million—call centre jobs offer a real and powerful opportunity to deliver
sustainable rural employment.
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 be Cogent 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:
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:
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.
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