A survey of 150 public sector employers published by international law firm Eversheds has revealed that 90 per cent of respondents, predominantly from the Local Government and Health sectors, feel that reductions in staffing present the single greatest challenge in the coming year. Over the same timeframe, 56 per cent of respondents are also planning changes to employment terms and conditions and 66 per cent to their employment practices.
The responses from the study are extremely revealing, both in terms of what employers have been up to, what they predict for the next 12 months and what they do not say.
Other key findings from the survey revealed that amongst those responding:
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• 56 per cent of employers are currently operating a recruitment freeze
• 45 per cent of employers are proposing a recruitment freeze
• 43 per cent of employers envisage some form of partnership arrangement
• 21 per cent of survey respondents anticipate a rise in outsourcing
Mark Hammerton, partner at Eversheds comments:
“The survey responses reveal considerable diversity in terms of how changes will be effected. Whilst redundancies make the headlines, and for obvious reasons, employment contracts and policies are clearly being scrutinised across the board. In particular, pay freezes, and even pay reductions, as well as the withdrawal of staff benefits or bonuses were anticipated by respondents.
“Recruitment is also severely restricted, if not precluded, for many (56 per cent of respondents revealing a current recruitment freeze and 45 per cent proposing such a freeze). Just under half of respondents are targeting more robust performance or absence management processes.
“HR professionals will clearly need to stay close to forthcoming proposals, ensuring, for example, that redundancy exercises or contractual changes are handled appropriately, if they are to avoid adding to the burgeoning number of tribunal complaints revealed in recent Employment Tribunal statistics.”
The survey also supported the view that many public sector employers believe trimming staff is unlikely, on its own, to produce the degree of cost-saving needed or reasonable maintenance of service delivery.
Increasingly, it seems, public sector employers are having to look beyond more ‘traditional’ measures to innovative approaches and wholesale service transformation. Forward thinking organisations will be, and are, asking fundamental questions about which services will be required, to what degree and by whom they should be provided.
Mark Hammerton continues:“More radically, there is much talk of cross public sector working through the “Total Place” concept. The sharing of services between public bodies has been a slowly building trend in recent years but is something the public sector is having to pursue more and more. 43 per cent of our survey respondents envisage some form of partnership arrangement. There is obvious merit and cost-saving in such a move for many. There are also some relatively easy wins for organisations to work together more efficiently and effectively, for example, by combining administrative and service delivery teams. We are certainly seeing an increasing trend towards this, something which will inevitably continue to rise.
“Even so, it can bring with it unique problems for those embarking on such an arrangement for the first time. One problem is what legal structure will be adopted; from very informal arrangements, pooled staffing, secondments and pooled budgets, to the creation of a merged or shared service company?”
It also appears that outsourcing to the private sector is not currently seen as the widely-heralded panacea to many of the issues faced in the public sector. 21 per cent of survey respondents anticipate a rise in outsourcing; a sizeable proportion, but not as great as might have been expected.
Mark Hammerton concludes:
“The results might possibly demonstrate a natural sector scepticism of the private sector’s ability to deliver genuine transformation in service and cost. A somewhat radical model is being trialled by Suffolk Council, which has announced it is to be a “Commissioning Council” through which services are administered but not provided directly. Many will watch this space with keen interest. Could this prove to be the ultimate in clever, forward thinking or a step too far which might prove of devastating impact to the quality and extent of public services?”
