Guernsey Press

Crisis? Take your pick…

LOOKING at the recent headlines, it’s less a case of ‘crisis, what crisis?’ and more one of ‘take your pick’: housing, inflation/cost of living, pension funding issues, demographics, or the fiscal deficit and the threat of GST… And now add to that the claimed need to bulldoze green fields to accommodate nurses at the PEH.

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In fact, the difficulties of housing key workers are so acute that the States is also contemplating commandeering some of the soon-to-be-built units at Leale’s Yard for its own staff, thereby leapfrogging the very locals desperately hoping to buy their first home who government has been letting down over the years.

Sorry if that’s a bit convoluted, but it’s a reflection of the mess this and previous States have got themselves into over failing to provide enough homes or resolve population/migration issues, have an adequate post-Brexit recruitment strategy in place, or react to long-anticipated demographic health care issues.

Look back to last October and the headline then was ‘Perfect Storm’ Leaves Business Short Of Staff.

This week it was Hundreds Of Buses Cancelled In Guernsey As Staff Shortages Hit Services.

In all this, government’s response has been to blame Brexit and insist the problem isn’t its inability to manage but all the fault of others, such as the UK. Hard luck local employers, it shrugs, we feel your pain.

Until, that is, Health’s Al Brouard let the cat out of the bag by saying the committee wants to sidestep all these difficulties by building on agricultural land at Le Vauqueidor. In other words, let’s use taxpayer money and give ourselves advantages private sector employers do not have. It’s the same elsewhere in government.

Call a States employee a key worker and prepare to bend the rules at islanders’ expense.

There’s much more that could be said on that, but the main driver of my ‘which crisis?’ theme this week is the abject failure of the States to run a tight ship. And the trigger was another headline: States Goes To Court To Block Pensions Tribunal.

This pending hearing is astonishing because government is in effect taking its own man to court for doing what it asked him to do as industrial disputes officer. Dig a bit deeper, however, and it’s more shocking.

The need to reform the public sector pension scheme has been recognised for years (other than by the beneficiaries) because of its ballooning cost and, chiefly, because the expense of funding any shortfall in a commitment to pay an index-linked pension based on final salary rests ultimately with the taxpayer. As indeed does the current deficit.

The then Policy Council set about reforming things in 2013 and – I’m skipping a lot here – the States approved new pension arrangements with effect from 1 March 2016. The critical point to remember, however, is that the Guernsey scheme is contractual, meaning any changes have to be negotiated and agreed.

In effect, changes are voluntary because they have to be accepted by each individual employee.

Yet elsewhere in the UK and the other islands, pension arrangements are statutory, which allows changes simply to be imposed by the employer as it sees fit, or as circumstances demand. Like now.

In a briefing paper to States deputies in March 2015 the Association of States Employees Organisations warned that the Policy Council forcing changes through, as it did, could commit the States to years of legal battles, potentially all the way up to the Privy Council.

What the punch-up with the former industrial disputes officer (his resignation wasn’t connected with the legal moves) tells you is that the battle over ‘imposed’ pension reforms is far from settled. You might recall that Unite the Union launched legal action of its own. Although that was called off in 2018, the underlying issues still remain. In essence, the States bought the union off with what it called ‘a more flexible pension option’ for members.

I won’t comment on the court proceedings themselves, but if it is ultimately held that the reforms have to be negotiated and agreed – not just imposed – the consequences for taxpayers and island finances are profound. In fact, just what’s at stake is indicated by those enjoined in the latest legal action.

Somewhat shadowy and referred to as The Group of 50, they include senior civil servants, court staff, at least one Crown appointee and law officers. The Bailiff, you’ll recall, has said that although he is a beneficiary of the pension scheme, he can rule on the narrow point of whether a tribunal is legally appropriate to deal with The Group of 50’s complaints.

In short, it’s a glittering cast of litigants and their progress is avidly watched by some of the best and most expensive minds employed by the States.

Whatever happens, it’s the unreformed contracts of employment that underpin many of the States’ deep-seated employment issues (remember the hash that was the airport firefighters’ dispute?) – and this has been recognised in a series of reports for more than 20 years. But not resolved, obviously. Performance-related pay, capability frameworks and procedures for dealing with productivity… all highlighted as necessary, all still to be introduced.

And now with inflation and the cost of living sky-rocketing, the expectation from public sector employees is that they will at least match RPI, while teachers are asking for above RPI. That’s currently (Dec 2021) 4.4% here but 7% in the latest figures for Britain.

Jack up Guernsey’s public sector pay costs by that amount and it’s a round figure of, say, £17.5m. a year added to the already existing predicted annual deficit of £85m. – without allowing for any additional pension costs.

I know it’s easy to blame the States for everything, but the one thing government has failed to manage properly is its most expensive and valuable asset – its own staff.