Our Ref: PK/kh/NGrid
8 July 2009
The Rt Hon Gordon Brown
Prime Minister
10 Downing Street
London
SW1A 2AA
Dear Gordon
At our GMB Congress in June you will recall that you kindly met
with two of our Shop Stewards from the National Grid Site in
Newcastle. To summarise the position, National Grid has
around 189 employees in Newcastle that carry out "Shared Services"
functions relating to invoicing, payments, payroll and
HR.
In the latter half of 2008, the Trade Unions were made aware of
company plans to close Newcastle, with a view to offshoring the
work as part of a review of this Shared Services function.
Our understanding is that due to the publicity surrounding the
dispute in the engineering construction industry, National Grid
subsequently opted to delay implementing any plans, but these are
now back on the agenda.
Both Stephen Byers MP and Nick Brown MP have met the company
over the future of the Newcastle site. Stephen Byers attended
in his capacity as the local Member of Parliament, and Nick Brown
as Minister for the North. In a letter to Stephen Byers in
January 2009, Steve Holliday, the Chief Executive of National Grid,
suggested that the review of shared services, and the threat that
posed to employees in Newcastle was being driven by regulatory
pressures.
As a result of this, the joint Trade Unions met with
Ofgem. Ofgem made it clear to us that they are not bound by
any Act of Parliament to take into account socio-economic factors
as part of their regulatory funding reviews, did not do so on this
occasion, and had no responsibility for any plans to close
Newcastle and offshore the work. We understand that Ofgem
subsequently protested to Steve Holliday at National Grid about
this suggestion that regulatory pressures would be responsible for
any decisions about the future of the Newcastle operation.
Subsequently, we have been advised by Steve Smith, Managing
Director of Networks at Ofgem, that Steve Holliday has now revised
his position and that any decision about Newcastle is based upon
"obligations they have to shareholders and to customers".
(PTO)
You should be aware that as part of the Shared Services Review
the employees and joint Trade Unions have identified £3m in cost
savings for the company.
We are now aware that National Grid has gone to the market as
part of their review of Shared Services functions and two companies
have been shortlisted. Wipro and TCS. Our understanding
is that Wipro are currently banned by the World Bank for four years
since June 2007. News quotes at the time said "they violated the
fraud and corruption provisions of the procurement guidelines or
the consultant guidelines". With the decision on the future of
Newcastle imminent, our Shop Stewards would welcome any feedback as
to whether your office has had chance to follow up this issue with
National Grid.
A decision to off shore work and to National Grid, which
essentially performs monopoly activities in the UK and is set to
benefit from the investment in the UK energy infrastructure.
A decision to offshore work and sack 189 workers in Newcastle,
by a UK company which this year posted a profit of nearly £3bn - up
12% on last year - could obviously be inflammatory. Moreover,
we think that Ofgem has to be compelled to take into consideration
socio-economic factors, such as retaining skilled jobs in the UK,
when reaching funding decisions.
A decision on the future of Newcastle is imminent and we would
appreciate any feedback that you may have been able to obtain.
Thank you once again for taking the time to meet with our Shop
Stewards in June and listen to their concerns.
Yours sincerely
PAUL KENNY
General Secretary