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Pay and reward strategiesin local government
Mark Bramah, Assistant Chief Executive
Economic outlook andspending cuts
•U.K. economy shrank by 0.7% in the secondquarter and grew by 1% in the third quarter –but still deep in recession.
•Institute of Fiscal Studies say only 6% ofplanned cuts in public spending have beenachieved with 94% still to come.
•LGA estimate that local government headcounthas reduced by 215,000 with a reduction in paybill of £1.4bn
•Audit Commission found that local authorityfunding has reduced by £3.5bn since 2010/11
•Much more to come.........
•Is there any good news – inflation andunemployment falling ????
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Pay reform in the publicsector in the crisis
•2 year pay freeze with £250 for those earning less than£21k (full time pro rata) but not extended to localgovernment where incidence of low pay is high.
•Claims that public sector pay has outpaced privatesector pay is contradicted by the earnings data.
•Pay policy part of the drive to ‘level down’ the perceivedprivileged position of public sector employment.
•Attempts to scrap national pay bargaining and introduceregional pay as part of a drive to make wage settingmore “market facing”.
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Chancellors AutumnStatement
•Those working in the public services, whohave seen their basic pay frozen, will nowsee it rise by an average of 1%.
•Commitment to implement reviews onmarket facing pay reports but…commitment to retain national bargainingin NHS and police
•Local government and regional pay?
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Local authority short-termresponses to funding crisis
•Redundancies.
•Imposed pay freeze/cuts
•Reductions in terms and conditions.
•Unpaid leave.
•Redeployment/training.
•Commissioning/outsourcing.
•Service redesign/ transformation.
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Impact on the workforce
•Morale and motivation.
•Health and wellbeing.
•Performance management.
•Capacity and skills.
•Redeployment/retraining.
•Outsourcing jobs.
•Role of the trade unions/facility time.
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Consequences and issues
•Equality impact/equal pay.
•Living wage.
•Performance Related Pay/competence basedpay/contribution related pay.
•Impact on service delivery.
•Local economies.
•Youth unemployment and training.
•Workforce planning.
•Staff engagement.
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Most job losses have been full-time(England and Wales 2012)
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What is happening toservices - Refuse Collection
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‘Enabling’ or ‘Ensuring’
‘Enabling’ Council
‘Ensuring’ Council
Core principle
Facilitates a market of external serviceproviders, delivering specifiedoutcomes.
Takes responsibility for ‘stewardship ofplace’, ensuring the economic, socialand environmental wellbeing of the localarea.
Operationalisationof core principle
Acts as a ‘strategic commissioner’,facilitating the delivery of servicesrather than directly providing them.
Recognises the strategic advantages ofin-house services and publicemployment.
Divests public services to privateproviders and the community andvoluntary sector.
Retains core capacity to deliver publicservices within the public sector.
Privileges contractual rather thancollaborative relationships withalternative providers.
Works with alternative service providerson a collaborative basis.
Grounds service decisions in ‘marketdemocracy’.
Grounds service decisions in localpolitics.
Pay and rewards – The Greenbook terms and conditions 2005
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Pay and rewards strategies – anintegrated approach
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Organisation strategy
Organisational Culture and peoplerequirements
People management strategy
Reward strategy
Reward policies
Source: LGA Resource Guide for local government
Elements of a strategy
•Reward philosophy and priorities.
•Pay design.
•Pay structures.
•Pay rates.
•Other pay elements.
•Other benefits
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Questions to ask
•Have you got a workforce plan in place?
•Do you have a robust performance management system?
•Hutton review on fair pay - How do you deal with top payand low pay in the authority?
•Do you analyse the market in terms of pay rates?
•Have you got a robust job evaluation mechanism in place?
•Do you carry out regular equality impact checks on paystructures and systems?
•What is your approach to retaining key staff?
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Comparative approaches –Manchester City Council
•Focus on transforming the workforce through efficiencyand the development of a workforce with flexible andgeneric skills.
•Joint working with the trade unions – The ManchesterAgreement.
•Service integration and multi-skilling.
•Support for in-house services.
•Manchester skills pledge.
•Manchester living wage
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Comparative approaches 2– West Lindsey DistrictCouncil
•More efficiency and productivity
•More co-production self help and relationships oftrust with communities, partners and localbusinesses
•Pluralistic leadership of purpose
•Bringing out the best in our people positivelynurturing their potential
•Great commercialism, income and trading
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Living Wage businesscase
•New rates £8.55 in London & £7.45elaewhere.
•Easier recruitment and retention, reducingrecruitment costs
•Higher quality staff
•Better attendance
•Better productivity, motivation and loyalty.
•Better quality of service
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The iron law of unintendedconsequences ??? –Equal Pay
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• 170 former Birmingham citycouncil employees –including women whoworked as cooks, cleanersand care assistants won alandmark ruling on Equalpay in the Supreme Court.
• Costs could be up to £10mand opens up potentially afurther 1000 claims.
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Contact details
Mark Bramah, Assistant Chief Executive
Email: mbramah@apse.org.uk
Association for Public Service Excellence
2nd floor Washbrook House, Lancastrian Office Centre, TalbotRoad, Old Trafford, Manchester M32 0FP.
telephone: 0161 772 1810
fax: 0161 772 1811
web:www.apse.org.uk