Councils search for ways to cut costs without compulsory redundancies

The council is confident that it will be able to achieve this target through a combination of natural wastage and voluntary redundancy, although the union Unison has been quick to raise the prospect of compulsory layoffs.

Derrick Louis, cabinet member for central services at Essex County Council, whose remit includes HR, says the move is part of a wider programme designed to deliver £300m worth of savings by cutting unnecessary bureaucracy and streamlining internal services, which would have been implemented regardless of the downturn.

“We’re taking out processes which don’t deliver value or high quality services and bureaucracy which adds costs, and implementing a leaner and flatter organisation,” he says. “It’s not a knee-jerk reaction, but has been carefully planned as part of a series of initiatives.” He won’t put a precise figure on how much the council hopes to save but says it is “millions, rather than tens of millions”.

General election

Essex is by no means the only council forced to introduce such measures, and there’s little doubt that other councils that have yet to do so will come under increasing pressure in the months ahead, regardless of the outcome of the imminent general election.

Buckinghamshire County Council is already on a similar path, having announced last year that it would be shedding 400 posts, with a similar focus on back-office roles.

“The cuts in public funding are going to be so severe that you’ll have to look across the whole organisation, but the obvious places to look are in some of the overhead costs, management layers and business and admin support posts,” says Gillian Hibberd, corporate director (people, policy and communications) at Buckinghamshire, and president of the Public Sector People Managers’ Association.

“We’ve got absolutely no choice but to look at completely transforming our organisations if we want to continue to provide the same level of service that we do at the moment”, she says.

Compulsion not required

Hibberd believes it is possible to achieve such reductions without compulsory redundancies, but adds that this depends on the lead time. She says: “Our changes were 400 over three years and so far we’re achieving about 50% through natural wastage.”

“Of the other 50%, half have beenthrough voluntary redundancies, so it narrows it  down all the time to a much smaller element of compulsory redundancies.” Essex, meanwhile, hopes to achieve the full 275 posts by this autumn.

Protect middle managers

Mark Warner, head of people management at West Sussex County Council, says his organisation shed 250 posts in 2009 and 200 the year before. But he doesn’t necessarily agree that middle management positions should be the first to go.

“You need to look at your services and how you’re going to deliver them and then understand what that means in terms of your staff and management,” he says. “There will always be a correlation between staff reductions and managerial reductions.”

Gavin Wright, director of HR at Hampshire County Council, is even less convinced that this is the right approach. “Middle managers are in a very strong position because they’re often the conduit between the senior part of the organisation and the operational workforce,” he says.

“They are sometimes the critical level that can make change happen. We’re not looking to go into a significant headcount reduction, but if we were we’d be looking at what services could be provided elsewhere, or indeed whether they are provided at all.”

Uncertainty

The uncertainty about public sector cuts will cause issues for those working in HR in the public sector, such as managing job insecurity and maintaining employee engagement, says Lisa Stone, principle consultant at employment consultancy Right Management.

“Organisations will need to keep clear communication channels with staff to manage the uncertainty among employees,” she says. “Managers should have open and honest discussions with their people about what opportunities are possible for career progression. Options such as secondment, level moves and role enrichment can be alternative platforms made available to keep top talent engaged and challenged.”

There are also other ways for HR to shape the debate, suggests Wright. “We’ve got to have a stronger conversation about reducing the pay bill rather than just cutting headcount,” he says.

“There are a lot of things that contribute to that, such as absence management and some of the benefits you pay staff such as business mileage, and we should be looking at some of those before we get into significant headcount reductions.” HR also needs to improve its employer branding and talent management strategies, he says, if it is to continue to attract and retain staff in the years ahead.

Private sector lessons

Those working in HR in the public arena can learn from the experience of their private sector counterparts, says Rebecca Beardwell, director at public sector recruiter Morgan Law.

“Practices such as the four-day week and increasing unpaid leave should be considered as a means of cutting costs and potentially lessening the requirement for redundancies,” Beardwell says.

HR itself is not likely to escape the impending public sector cull, says Warner. “Along with every other department, we need to ensure that we are managing our own department in an efficient way,” he says. “There needs to be some correlation between the size of an HR department and the size of the organisation it’s serving.”

Back at Essex County Council, Louis concedes that the current drive for greater efficiencies is a recognition that such discipline has not always been in evidence.

“Over time organisations evolve and put jobs in to tackle specific issues which may be really relevant and important at the time,” he says. “We’re taking the opportunity now to take a look at what we do and how we do it so we can deliver really high quality services that represent excellent value for money.”

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