HR Austerity Panel: Reaction to Comprehensive Spending Review

As the dust settles following the Chancellor’s long awaited announcement of the Comprehensive Spending Review (CSR), public sector HR professionals are coming to terms with some of the most significant changes to the employment landscape for years. Personnel Today’s HR Austerity Panel analyses the implications of the CSR. Daniel Thomas reports.

Graham White, HR director at Westminster City Council

I think I have seen the deepest cuts to public spending I will see in my lifetime, but I am not surprised. A sustainable public service fit for purpose in the 21st century is a credible and honourable target to set ourselves. Public sector HR is uniquely positioned to play a critical part in its achievement and I hope I have an opportunity to be part of this.

For the public sector it is a coming of age for HR. A time to finally prove our worth. Too often HR schemes and initiatives are launched with gusto and then die a death of a thousand emails. If there is a single task for HR in the public sector in the next three years it must be to ensure that the wheels of Whitehall and town hall bureaucracy are not allowed to absorb and neutralise the fundamental change needed in how councils resource themselves and how they engage their workforce.

For the private sector HR teams there are other exciting new opportunities. The former public sector workforce will be hungry for new challenges and eager to learn more skills and will be pitching for new jobs in new environments. The private sector needs to get out of its presumptions and arrogance and see there are wider opportunities if only they will fish for talent in a wider pond and accept that retraining is a worthy investment. And for both sectors the future will be a time of closer working, we need to get better acquainted with each other and spend time sharing the challenges and looking for closer working relationships that could easily develop into partnerships.

Dean Shoesmith, president of the Public Sector People Managers’ Association and joint HR director for Sutton and Merton councils

It is very much what we expected – the £83 billion reduction was clearly forecast in the emergency Budget. Many public sector organisations have begun transformation programmes already in the knowledge that reductions have to be made. We will be focusing on downsizing, transformation and new service delivery models. For the private sector, where they are a major supplier to the public sector, it is very likely there will have to be downsizing too.

The extra investment in apprenticeships is very welcome – investment that creates opportunities for education, training and employment is crucial to strategic workforce development. A skilled workforce, in private, public and third sectors will enable the UK to compete effectively in the global economy. Ideally, such workforce development should be for both existing employees, as well as creating new employment and education opportunities.

At present the private sector may pick up some but not all the displaced employees. Until the UK sees more robust and sustained economic growth there is risk that the private sector may not be able to absorb all displaced public sector workers.

Sian Thomas, chief executive of membership organisation Synuron

The announcement has given some clarity about the challenge ahead. As ever HR leaders in the public sector will rise to this and deliver savings whilst at the same time attempting to engage and maintain trust with their staff. I believe the extra investment in apprenticeships is good, while no one really understood Train to Gain (which is being scrapped) anyway.

However, the outlook for UK graduates is going to be hard. HR will now need to manage out all the poor performers as, with half a million fewer jobs and a need to create a million more across all sectors, the bar on performance has just risen sharply.

Richard Crouch, head of HR and organisational development at Somerset County Council

There will be some key frontline services which are seriously affected. Outsourcing and social enterprise models will be key. There will probably be a large impact on the third sector which is likely to pick up many of the council contracts. I worry (as do many of my private sector friends in the City) that a recovery in the jobs market won’t be there for some time with the consequence of unemployment soaring.

Indeed, there are many private sector companies that are suppliers to the public sector so the business knock on will be significant that may fuel job losses in the private sector. It will certainly change the face of local government – probably into an enabling function than a delivery function. Whether this is a good thing or not, time will tell.

Angela O’Connor, chief people officer, National Police Improvement Agency

“The idea that the private sector can pick up the people from the public sector is not a convincing one. Colleagues I work with in the private sector are also keeping a very tight reign on finances; there are geographical and skills issues to consider; and the views put forward so far have been simplistic and in my view unrealistic. We all know we need to make cuts and I am less concerned with which sector people are in than the general view from a range of bodies and organisations that families everywhere are going to suffer, the poor are going to be impacted on most and women will experience more pain then most. Yes we need to make cuts but lets not underestimate the personal impact that these cuts will have on people for many years to come.”

Roger Seifert, professor of industrial relations and HR management, Wolverhampton Business School

“It is a rather crude package with insufficient detail and cuts that appear to be based on saving money in the short-term rather than on a realistic analysis of the impact on the medium-term – that is some cuts will mean higher costs later on. Normally we would expect HR to be busier with redundancies to handle, disputes to contain, depressed and frightened colleagues to control, and managers to appease. But this time HR will be even busier because their jobs are on the line throughout the public sector. Many public sector organisations will save money through reductions in senior posts, reorganisations, stopping some activities, reducing other tasks, cheapening the workforce costs, and laying off staff. Most of this will have a direct impact on those working in the services and those using the services.

“A major strategic aim of the cuts is to create a low wage economy with weak labour market controls, and additional unemployment to ensure there is little scope for unions and others to push up wages. This is a long-term aim of the coalition government and represents a two-tier economy and a two-tier social world. Most people in work will become worse off and will not benefit from any upturn later in the decade, while a minority with high skills will do much better. Hence the cuts in higher education, the reduction in graduate jobs in the public sector, and the creation of low skilled low paid private sector jobs. Severe reductions in benefits underline the attempt to weaken the labour market position of low paid workers, and to make working on low wages more attractive than not working.”

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