Powerhouse hopes '˜fatally undermined by loss of 250 jobs'

The Department for Business, Innovation and Skills (BIS) confirmed yesterday the office would close as planned in 2018.

The announcement came as members of the Public and Commercial Services union took part in the second day of a 48-hour strike in protest at the closure.

BIS permanent secretary Martin Donnelly said staff will be able to remain in the current office until January 2018 and will then be given the option to relocate.

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Politicians have criticised the move, but business leaders in the city said that there was still much to be positive about in Sheffield.

Speaking in the Commons, Labour’s Sheffield Central MP Paul Blomfield said the decision “adds to the operational costs of the department, flies in the face of Government aims to move civil servants out of London and fatally undermines their claims for the so-called Northern Powerhouse”.

A restructuring programme aimed at saving £350m by 2020 will see a reduction in locations from 80 sites to seven regional business centres. One of these will be a combined BIS HQ and policy centre near Parliament and other Government departments.

BIS said more than 80 per cent of its staff will be based outside the capital, despite the relocation of 247 Sheffield jobs.

Former Liberal Democrat leader and Sheffield Hallam MP Nick Clegg said: “Moving jobs to London is madness. Terrible for the workers, terrible for Sheffield and terrible value for taxpayers.

“These proposals were never on the cards during the coalition and should never have seen the light of day.”

And Sheffield Council leader Coun Julie Dore, who said Business Secretary Sajid Javid refused to meet with her last week despite repeated requests, described the announcement as “extremely disappointing, but probably not surprising”. The PCS general secretary, Mark Serwotka, added: “As a Northern Powerhouse city, Ministers should be investing in jobs in Sheffield, not devolving them back to central London.”

The confirmation of the office closure comes as companies such as HSBC and Polestar shed jobs in the city, and there is uncertainty over the future of the steel industry. But projects such as the Meadowhall expansion mean there are positives to take, according to business bosses.

Sheffield Chamber of Commerce and Industry executive director Richard Wright said: “It is easy to get gloomy about jobs amid news from HSBC, BIS and DLA and nobody can pretend this is good news.

“I would, however, temper this with the announcement in the last week by Meadowhall, the list of projects in planning like the motorway services and expansions at the Advanced Manufacturing Park. They will all create jobs.

“The issue is to ensure we create more than we lose, that they are more skilled and better earning, and that we have people with the right skills to fill them.”