FDA union's Dave Penman: Plans to tear up the deal on civil service redundancy terms will undermine trust between politicians and public servants

Over the last decade the civil service has managed significant reductions in headcount. Why place all of this in jeopardy?

By Dave Penman

15 Feb 2016

When the government announces that it’s cutting some aspect of public servants’ pay and conditions, you expect the usual moral outrage from both public servants and their unions. It’s difficult as a union when the employer wants to cut or change something. Sometimes, while we don’t agree with it, we can see the rationale behind it.

If an employer is facing a financial crisis, most unions would recognise this in their approach to negotiations. It’s in no-one’s interest for a company to fold and a union’s members to be out of work. Every day, up and down the country, you’d be surprised at how much pragmatic, constructive engagement there is between unions and employers: keeping companies afloat and boosting productivity.

In the public sector this has a different context, but that productive engagement is no less possible. Every pay rise or condition of service has a cost to the taxpayer. The government decides how much it wants to spend on public services and part of that cost is the salary and related benefits of public servants.

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This government is already guilty of claiming pay restraint is a way of protecting jobs. It’s a false dichotomy. Any number of decisions by government cost money (sometimes waste money), so simply singling out the supression of pay rises as a way of saving jobs is just a cheap shot from politicians.

And so we come to the latest announcement: further cuts to redundancy terms. There’s a backstory here, which makes this all the more distasteful. 

I take you back now to the early months of the coalition government. Labour had tried to renegotiate the redundancy terms while the party was still in power, but had been challenged in the courts by PCS. It was the first order of business for the new (Conservative) minister for the Cabinet Office, Francis Maude. It took nearly six months to negotiate and again, was not agreed by all the unions, but a tangible agreement was struck and reform implemented.  Maude lauded the deal as a success, describing it as “lasting”. He said it would “provide a fair balance between the interests of taxpayers and the interests of civil servants and protect those approaching retirement and the lowest paid” (Hansard 14 December 2010, if you want to check).

At that point, the previous system had been around for 25 years and was riddled with inconsistencies, age-related terms and provisions that were difficult to defend. The new deal saved an estimated 40% on the costs of redundancy (notoriously difficult to estimate as it depends on who is made redundant in the future). It was what I’d consider to be a typical piece of negotiation. We were able to protect certain elements that were our priority and the minister was able to deliver substantial savings. The deal also, for the first time, offered better terms for voluntary – rather than compulsory – redundancy, encouraging staff to volunteer earlier in the process and preventing the destructive consequences of mass compulsory redundancies. Now we see this agreement being torn up in front of us just five years later. 

Redundancy terms serve two main purposes. Firstly, they pay compensation for the loss of a job, often providing a bridge to finding alternative employment. They also help employers manage staff reductions. As any HR manager will tell you, encouraging those that want to take a package for whatever personal reason, and to do so by agreement, is always preferable to forcing individuals out of the door.

Over the last decade the civil service has managed significant reductions in headcount. I’ve been involved in negotiations that have helped to manage that process as painlessly as possible. It has been one of the single biggest successes for people management in the civil service and even forced departments to start co-operating on redeploying staff (who knew that was possible?). It led to the “protocols” for avoiding redundancy, one of our most significant and lasting achievements.

Why place all of this in jeopardy? What exactly is broken and needs to be fixed? Public finance is certainly in no worse state now than it was in 2010. The Cabinet Office proposals turn the carrot of more generous terms for volunteers into a stick. Without any evidence to support it, their proposal will see the best terms only offered at the earliest point, before individuals are likely to even know whether they are at risk of redundancy. If you don’t volunteer at that time, you lose the right to a voluntary exit package and less favourable terms apply. And all of this at the time when departments are announcing their plans for further workforce reduction.

To talk of shifting sands, both for those trying to manage the service and staff who should be able to trust ministers to honour a deal, doesn’t really do this debacle justice. It’s hard to see the result being anything other than further erosion of the trust between those delivering public services and the ministers they serve.


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