The recent dispute at the Department for Work and Pensions (DWP) saw the biggest civil service strike in 13 years, with more than 40,000 staff on strike over pay and a new performance management system. Mike Berry talks to Sir Richard Mottram, permanent secretary at the DWP
Why are staff unhappy with the pay deal that’s being offered?
I think they’re unhappy because it’s been misrepresented. Essentially, what we offered people is pay increases of, on average, something over 5 per cent. What we’ve offered is being continually misrepresented by the Public and Commercial Services union (PCS) as a much lower offer, so I think staff don’t appreciate the value of what’s on the table.
How do you counter PCS claims that DWP staff are on ‘poverty pay’?
We have made a pay offer that is particularly targeted at the lowest paid frontline staff – worth between 7 per cent and 8 per cent for these employees. Therefore, we agree with the unions that there is an issue about low pay. The PCS has then misrepresented our offer as being worth 2.6 per cent, when that offer only relates to people at the top of their pay scales.
Secondly, we’re realistic in saying that we recruit and retain people in the wider economy, so if we need people to work in contact centres, our aim as an employer has to be ‘what do we need to pay in order to recruit and retain people’?
Why are staff listening to the PCS more than their employer?
I think they are listening to us. If you look at the number of people who were working during the strike against the number of people who weren’t – it was around a third actually out on strike [approx. 43,000].
The numbers being quoted in the media were somewhere between 80,000 and 90,000 – again a misrepresentation.
Are you not concerned that nearly a third of your workforce walked out?
Obviously, I don’t want anybody to be on strike. The issues for us, as the management of the department, really surround two things. First, to get across to staff the value of the pay offer, and second, alleviate staff concern surrounding the new performance and development system. That again is an issue for us to communicate to our people.
Is this dispute about poor communication between management and employees?
The essence of this dispute is about one of our trade unions having completely unrealistic expectations about the pay market in this country. I think we’re caught up in a PCS campaign in two directions. One, it wishes to restore national pay bargaining across the civil service. Second, it argues that civil service pay is being artificially constrained and it wants to breach those limits.
What measures did the DWP have in place to minimise disruption?
We made arrangements as far as we could to keep offices open. Only 146 Jobcentre Plus offices out of more than 1,000 were closed. We took steps to ensure that people could get the payments they needed. Obviously, we greatly regret that strike action took place because it disrupted our service to our customers.
What does the new performance system entail?
We’re introducing a new system under which each individual’s performance will be assessed alongside everybody else.
Then, essentially, they will be placed into one of four categories – a pretty standard system. Staff are quite nervous about it because they haven’t experienced it before.
What we have said is that because staff are unsure on how it will work, for the next pay offer , we will use this system only in relation to non-consolidated benefits, not in relation to their pensionable pay.
What role can management play now?
I think it’s a leadership issue. Certainly in relation to the performance and development system, we need to put over more clearly what it’s about and why staff need not worry over the next few weeks. In the case of pay, it is just a question of continually getting across the same message – that this is not a below-inflation pay increase. That is an issue about communication – we need to get the facts over.
What happens next in resolving the dispute?
We have said to the PCS that we’re happy to go on talking to reach an agreed settlement, but the reality is that we’ve already stretched the envelope of available money. We are introducing the new performance and development system, so we have to have a discussion that is realistic. We hope there is a change in its stance.
What is your reaction to the recent Gershon report?
Since 2002, we have been committed to reducing the number of staff at the DWP. In the 2002 spending review, we agreed to improve all aspects of the service we provide, including jobcentre offices and IT support to our staff. In return, we agreed we would run down the number of staff as we applied these measures between now and 2006. We already have a set of plans that we explained to Sir Peter Gershon, which he regards as on the right lines. Beyond that, we will be looking at where we go next. If we invest more in our staff, we expect them to be more efficient. Obviously, there are challenges for us in treating staff fairly as we change the jobs they do and alter the locations we operate in. Whereas Gershon is presented as a bolt from the blue – it certainly isn’t for this department.
The DWP’s HR director, Kevin White, has said there would be a potential 18,000 job losses over the next three years. Is that the case?
Yes. These plans are not secret – staff have known about these since 2002, because it’s on our intranet site. We have had extension consultation with the unions about these changes. But if we’re going to make a change on that scale, we need to spend a lot of time explaining to staff what that actually means and how we’re going to do it.
We need to invest more in face-to-face communication with people. One of the lessons learned is that if you are going to achieve change on the scale the department is proposing, then you have to invest a lot in communication of every kind. One of the areas where I think we need to invest more is getting messages up and down the organisation.
Our last staff survey revealed that our managers need to up their game in leading their staff and explaining the challenges we face. We have invested a lot in leadership training for senior managers and that’s been worthwhile. But we have to put more effort into that.
Proper communication is a management issue supported by HR and we spend a lot of time talking about how we can get messages across in a consistent way.
Some of your frontline staff already claim they are already working excessive hours. How will the proposed changes impact on them?
What we’re planning to do is make staff changes in areas where, if we introduce more effective IT and reduce performance variations between different parts of the department doing the same sort of work, then there’s scope for significant efficiency improvements. That again is an issue of really communicating with our staff.
The reality is that if people want pay increases in the civil service, they have to make themselves more efficient, therefore we have to change. There is no alternative.
If our staff are nervous about change and comfortable with the way they are working now, our message is clear: if we’re going to be a successful, high-performing organisation, we are going to change.
How important are good people management practices?
They are absolutely crucial. In this department in the past there was insufficient investment in our people in giving them the tools they needed to do the job; motivation and morale was quite patchy. Certainly, over the last three years, we’re in a different world where we can create a different model for the future and the big challenge is to really get our people to appreciate the value of what they are doing and take pride in it.
2002 Permanent secretary for the Department for Work and Pension
1998 Permanent secretary for the Department for Transport, Local Government and the Regions
1995 Permanent secretary at the Ministry of Defence (MoD)
1992 Head of the Office of Public Service and Science
1989 Deputy secretary responsible for British defence policy
1968 Joins Civil Service, working in the MoD