Pay and reward strategies in local government Mark Bramah, Assistant Chief Executive

Economic outlook and spending cuts U.K. economy shrank by 0.7% in the second quarter and grew by 1% in the third quarter – but still deep in recession. Institute of Fiscal Studies say only 6% of planned cuts in public spending have been achieved with 94% still to come. LGA estimate that local government headcount has reduced by 215,000 with a reduction in pay bill of £1.4bn Audit Commission found that local authority funding has reduced by £3.5bn since 2010/11 Much more to come Is there any good news – inflation and unemployment falling ????

Pay reform in the public sector in the crisis 2 year pay freeze with £250 for those earning less than £21k (full time pro rata) but not extended to local government where incidence of low pay is high. Claims that public sector pay has outpaced private sector pay is contradicted by the earnings data. Pay policy part of the drive to ‘level down’ the perceived privileged position of public sector employment. Attempts to scrap national pay bargaining and introduce regional pay as part of a drive to make wage setting more “market facing”.

Chancellors Autumn Statement Those working in the public services, who have seen their basic pay frozen, will now see it rise by an average of 1%. Commitment to implement reviews on market facing pay reports but… commitment to retain national bargaining in NHS and police Local government and regional pay?

Local authority short-term responses to funding crisis Redundancies. Imposed pay freeze/cuts Reductions in terms and conditions. Unpaid leave. Redeployment/training. Commissioning/outsourcing. Service redesign/ transformation.

Impact on the workforce Morale and motivation. Health and wellbeing. Performance management. Capacity and skills. Redeployment/retraining. Outsourcing jobs. Role of the trade unions/facility time.

Consequences and issues Equality impact/equal pay. Living wage. Performance Related Pay/competence based pay/contribution related pay. Impact on service delivery. Local economies. Youth unemployment and training. Workforce planning. Staff engagement.

Most job losses have been full-time (England and Wales 2012)

What is happening to services - Refuse Collection

‘Enabling’ or ‘Ensuring’ ‘Enabling’ Council‘Ensuring’ Council Core principle Facilitates a market of external service providers, delivering specified outcomes. Takes responsibility for ‘stewardship of place’, ensuring the economic, social and environmental wellbeing of the local area. Operationalisation of core principle Acts as a ‘strategic commissioner’, facilitating the delivery of services rather than directly providing them. Recognises the strategic advantages of in-house services and public employment. Divests public services to private providers and the community and voluntary sector. Retains core capacity to deliver public services within the public sector. Privileges contractual rather than collaborative relationships with alternative providers. Works with alternative service providers on a collaborative basis. Grounds service decisions in ‘market democracy’. Grounds service decisions in local politics.

Pay and rewards – The Green book terms and conditions

Pay and rewards strategies – an integrated approach Organisation strategy Organisational Culture and people requirements People management strategyReward strategyReward policies Source: LGA Resource Guide for local government

Elements of a strategy Reward philosophy and priorities. Pay design. Pay structures. Pay rates. Other pay elements. Other benefits

Questions to ask Have you got a workforce plan in place? Do you have a robust performance management system? Hutton review on fair pay - How do you deal with top pay and low pay in the authority? Do you analyse the market in terms of pay rates? Have you got a robust job evaluation mechanism in place? Do you carry out regular equality impact checks on pay structures and systems? What is your approach to retaining key staff?

Comparative approaches – Manchester City Council Focus on transforming the workforce through efficiency and the development of a workforce with flexible and generic skills. Joint working with the trade unions – The Manchester Agreement. Service integration and multi-skilling. Support for in-house services. Manchester skills pledge. Manchester living wage

Comparative approaches 2 – West Lindsey District Council More efficiency and productivity More co-production self help and relationships of trust with communities, partners and local businesses Pluralistic leadership of purpose Bringing out the best in our people positively nurturing their potential Great commercialism, income and trading

Living Wage business case New rates £8.55 in London & £7.45 elaewhere. Easier recruitment and retention, reducing recruitment costs Higher quality staff Better attendance Better productivity, motivation and loyalty. Better quality of service

The iron law of unintended consequences ??? – Equal Pay former Birmingham city council employees – including women who worked as cooks, cleaners and care assistants won a landmark ruling on Equal pay in the Supreme Court. Costs could be up to £10m and opens up potentially a further 1000 claims.

Contact details Mark Bramah, Assistant Chief Executive Association for Public Service Excellence 2nd floor Washbrook House, Lancastrian Office Centre, Talbot Road, Old Trafford, Manchester M32 0FP. telephone: fax: web: