Slash and burn here please

If you want meaningful reform of the public sector, it has to begin with contracts of employment and labour relations. That’s why we do need a slash and burn approach – but it has to be properly negotiated, says Richard Digard

Progress, of sorts, for all those who are prioritising the holy grail of public sector reform. We now know no one has a clue what right-sizing government actually means. Thanks to Heidi Soulsby in the States last week, however, we learn what it isn’t: slash and burn. Instead, we’re told we should view it as rebalancing priorities and putting resources where they’re needed.

Unhappily for those who can see how desperately reform is needed, this is largely gibberish. But it at least explains why no meaningful progress has been made since at least 2009, when the original Financial Transformation Programme launched. Put simply, since government can’t agree what it wants, it’s never going to achieve it.

Before setting out what it should be doing, we first need to big up the public sector. Across the piece there are some very diligent and committed people doing extraordinary stuff. We’ve seen the stars, like Dr Brink, and we’ve watched chief executive Paul Whitfield at the Covid briefings ageing visibly under the strain of holding things together. There is no rehearsal for pandemics.

Elsewhere, countless less-visible people keep the island ticking over, the hospital theatres sterile and open, the sewers free from fatbergs and clean water coming through the taps. This hidden army is one reason why responsible individuals can be deployed at Beau Sejour to ensure islanders are vaccinated in a timely and efficient manner.

In short, the public sector of itself isn’t the problem. Its history, management and contracts of employment are, along with public sector labour relations generally. Hence civil service union Prospect threatening legal action because unemployed or furloughed islanders are reluctant to give its members a pay rise.

Actually, I said that just to be provocative. The underlying reason is the union objecting to Policy & Resources apparently failing to follow process by not negotiating a pay rise, even if that was to be 0%.

Across the island, labour relations are pretty good, at least as measured by the absence of disputes. Those that we do see tend to come from the public sector, which doesn’t have a good track record in these areas.

I’ll try to avoid making this too much of a history lesson but the relevant legislation dates back to 1993 and is anyway based on the then need to stop greenhouse hands from withdrawing their labour and damaging the island’s economy. That’s why it can impose settlements, regardless of acceptance by either party.

While the States supports free collective bargaining, unions – and there are around 14 – feel it’s not applied in practice and that settlements are simply imposed. That’s what led to the disastrous confrontation with the airport firefighters and closure of the airport in May 2009.

We’ve had successive reviews into these areas – Professor Jon Clark’s Mechanisms For Determining Public Sector Pay In Guernsey in 2001 and Dr Graham Robinson’s report on the Role of the States of Guernsey as an Employer in 2008 being the main ones – and still not much has changed.

Fast forward to 2017 and consultants PwC found things were still a mess. ‘The pay grade structure across the States is inconsistent, with a large number of roles and varying pay across service areas. Significant discrepancies in standard working hours, overtime allowances and compensation structures exist amongst committees. The cost of living uplift (compared to the UK) is also inconsistent across service areas.’

In addition, neither departments nor central HR had much of a clue about performance managing staff or how to get rid of the duffers. ‘There is a perceived lack of clarity over the ability to remove staff through severance or redundancy processes,’ said PwC.

It then added this bombshell: ‘In order to drive financial efficiencies it is important that managers are able to identify posts that are no longer required without the current post-holder being viewed as a blocker to removing the role.’

In essence, the unions are disproportionately powerful and have contracts that date back to the time – now long since passed – when pay was poor and a gold-plated pension compensated for that. They are also unduly protective.

I’ve asked and had partial confirmation that those contracts prevent civil service pay from being reduced. Hence the public sector not being furloughed. I’m also told by senior staff that in the event of the island going belly up, civil servants have first claim on public assets like property to protect those awesome pensions. And no change can be made to them without staff agreement.

So right-sizing the public sector requires a partnership approach to industrial relations, contracts that reflect this plus taxpayers’ legitimate interests, greater flexibility and, above all, the ability of government to manage its staff properly.

To illustrate this, the then Health and Social Services Department wanted to avoid taking on an additional radiologist at a cost then of around £120,000 a year and so engaged a couple of qualified and experienced radiographers – who sat around unable to assume full duties because there was no agreement over what they should be paid.

The blame for that rested with the old Public Sector Remuneration Committee, the same folk who felt closing the airport would teach the firefighters a lesson.

Things may have improved, but the relevant industrial relations legislation hasn’t, nor have all the improvements recommended by the tribunal of inquiry into the firefighter debacle been implemented. Union influence is still absolute, pay rates and staffing levels inconsistent and wasteful and, in the round, the taxpayer gets a poor return on the £247,572,000 it spends each year in total on pay costs.

That’s because there’s no performance management, no performance-related pay and, because of inability, ignorance and ineffective HR support, plus restrictive contracts of employment, the unions still largely call the shots.

Deputy Soulsby says no slash and burn. Yet if you want true reform, meaningful outsourcing of functions better provided by the private sector and tapping into the considerable expertise and help available from the island’s voluntary sector, that’s exactly what’s needed.

Achieving it, however, requires a partnership of purpose approach to negotiations that so far appears beyond the ability of any States to execute.

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