David Fagan and Jawaid Rehman 19 March 2015

Further streamlining ahead for local government workforce

Whatever the outcome of the forthcoming election, one thing remains almost certain - austerity measures and spending cuts for local government will continue.

Local authorities have been burdened with reducing budgets for some time, with seemingly no end in sight following George Osborne’s comments that austerity measures would have to continue until 2020. Labour has also committed to adhere to government spending plans in the near future.

With staff employment costs representing the lion’s share of most budgets, staff numbers will remain a target for reductions. There is likely to be a continued emphasis on recruitment freezes, reduced hours contracts, reduced spend on agency workers and managing staff absences. Many local authorities have sought volunteers to reduce staff pay bill and may have to make redundancies.

Whilst clearly unsettling for staff, the need to balance the books may present an opportunity for local authorities to implement more dynamic approaches.

Northamptonshire CC, for example, announced plans to become a 'next-generation council' focussed on 'right-sourcing' and commissioning services and monitoring outcomes. This would result in a 96% reduction in its directly employed staffing and contribute to the council’s need to save £148m over five years.

This would involve major changes, not just in the numbers of staff employed but their key skills. But will such a radical change in how Councils comply with their statutory obligations be feasible / politically acceptable elsewhere? It seems likely many other authorities will continue recent trends towards more outsourcing of service delivery, while placing emphasis on shared services and co-operative working. This may be combined with a move away from the restrictive Green Book terms and conditions to create a 'leaner', more flexible and (hopefully) more cost-effective workforce.

Most local government employees have Green Book terms incorporated into their contracts. Whilst this allows authorities flexibility regarding terms and conditions, other changes that could bring about significant cost savings, including sickness and annual pay awards aren’t so straight forward. Moving away from the Green Book would not only mean more control over the pay bill, but would also allow a more tailored approach to pay and benefits where progression depends on performance (which is more akin to the private sector.)

From a local government workforce planning perspective, the operating environment and business drivers must be considered before the technical aspects. This includes reviewing local community’s needs, services the council wishes to provide itself as well as in response to those needs commission from others or provide in partnership. This approach can identify early on the benefits that working in partnership with other public sector bodies can bring.

Shared services and co-operative working across public sector bodies is now becoming well established, helping achieve significant savings through economies of scale, avoiding duplication and increasing purchasing power. It can also lead to a real ‘service user’ led approach. As pressure builds to make further cost savings, it’s likely that local authority staff will work closely with partners in other public sector bodies.

The future of the workforce in local government looks like an increasingly streamlined one, but perhaps one which delivers a more commercial and user-led service, and a more merit based reward system.

David Fagan and Jawaid Rehman are both partners at national law firm Weightmans

This feature first appeared in The MJ. Click here to subscribe to your weekly copy.

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