Last year, the government’s influential ‘waste watchdog’, Sir Peter Gershon, identified annual public sector efficiency savings amounting to £15bn a year. Some 80,000 civil service jobs could go, he argued, without impacting on essential frontline services.
Labour has increased this estimate to £22bn a year, and the Tories believe they can cut £35bn of wasteful public spending each year by 2011 – and £4bn in the first year alone.
So how do public sector HR departments respond to this general money-saving entente? By spending about 1m a day on interim HR managers, it seems (see £1m a day). Not only are they using more interims, but they are using them for longer.
Given that a key focus of Gershon’s report centred on the amount the public sector spends per employee on HR (which he understood to be two or three times more than the private sector), this is bound to draw Treasury attention sooner or later, with all the unpleasant consequences that can bring.
What are public sector HR managers admitting by their over-reliance on expensive interims? Is it that their departments are understaffed, which goes against everyone else’s analysis? Or is it that they lack the skills to implement the people policies, deliver the change management programmes, and cut through the red tape that is filling their in-trays?
Ironically, it appears to be the latter. Pressure on HR departments from the Treasury, and Gershon’s own Office of Government Commerce, to achieve headline-grabbing cost savings are adding to their burdens.
People managers need to be at the very centre of efficiency reviews, especially when they involve the level of redundancies Gershon advocated.
To leave HR understaffed and/or underskilled at this crucial time will inevitably lead to a desperate need for outside help, enormous interim bills and the type of major false economy that Gershon was seeking to eradicate in the first place.