Social dialogue and the public
services in the aftermath of the
economic crisis: strengthening
partnership in an era of austerity
in the United Kingdom
National report
Stephen Bach and Alexandra Stroleny,
King’s College, London,
September 2012
European Commission project
Coordinated by Professor Stephen Bach, King’s College, London
‘Industrial Relations and Social Dialogue’
VP/2011/001
Table of Contents
Summary .................................................................................................................................... 1
Introduction ............................................................................................................................... 2
1. Public Services and public sector social dialogue ................................................................. 2
Overview of public services and employment ......................................................................... 2
Institutions and main features of social dialogue in the public sector ................................... 3
2. National austerity: Influences and measures ....................................................................... 4
Influences ................................................................................................................................ 4
Measures ................................................................................................................................. 5
Pensions ............................................................................................................................... 7
Employment reductions ....................................................................................................... 8
Consequences for social dialogue ........................................................................................ 9
Responses of social partners ............................................................................................. 10
3. a Sectoral Trends: Local Government ................................................................................. 12
Wage freeze ....................................................................................................................... 13
Employment Reductions and workforce composition ....................................................... 14
3. b A Tale of Two Cities: Coastal and MidTown .................................................................... 15
Coastal: Rational for case selection ..................................................................................... 15
Background ........................................................................................................................ 15
Proposals............................................................................................................................ 16
Strike action ....................................................................................................................... 17
Current developments ....................................................................................................... 17
MidTown: Rational for choice of case ................................................................................. 18
The agreement................................................................................................................... 18
Background ........................................................................................................................ 19
Communication and Involvement ...................................................................................... 20
Comparison of the two municipalities .................................................................................. 20
4. Conclusion ............................................................................................................................ 23
Summary ............................................................................................................................... 24
References ............................................................................................................................... 27
Appendices............................................................................................................................... 32
List of Tables
Table 1: UK Public Sector Employment from 1991 – 2011
Table 2: Labour Disputes in the UK 2008 - 2012
Table 3: Comparison of two local government authorities
Table 4: Change in central government funding 2010/11 – 2011/12
Summary
The economic crisis has been the trigger for major changes in public sector employment
relations in the United Kingdom (UK) with major implications for social dialogue.
This report outlines the structure of the public sector and patterns of social dialogue,
considers austerity measures and the way in which they have been implemented, before
examining the responses of two local authorities to budgetary reductions. This analysis
builds on a series of underlying research questions:
1. What changes have there been in terms of job levels, terms and conditions of
employment and patterns of work organisation?
2. How have these changes been implemented and to what extent has social dialogue
contributed to the change process at national, sectoral and local level?
3. How have institutions of social dialogue influenced industrial relations processes/
outcomes in the public services?
Given the economic downturn, the government bail-out of financial institutions, and the
consequent pressures on public sector finances the Conservative-led Coalition government,
elected in 2010, has introduced austerity measures which constitute particularly rapid
expenditure cuts. This report considers the quantitative and qualitative nature of these
measures as well as the main underlying drivers, while also recognising longer term
influences on reforms of public sector employment relations (i.e. demographic changes with
an aging population putting increased pressure on public expenditure and requiring different
patterns of service provision) and the specific legal peculiarities in the UK context.
It discusses significant reforms and highlights the impact of severely reduced budgets in the
civil service, health and local government in relation to these measures which are targeted
at pay awards, pension provisions and staffing reductions. It also considers the effect on
employment relations resulting from the government’s commitment to shrinking the state
and increasing the role of the private sector via outsourcing and the Big Society.
Local government has been hit particularly hard in many EU countries, including the in the
UK. Drawing on national interviews and fieldwork conducted in two local authorities, it is
apparent that there are not only variations between sectors but also within sectors in terms
of the extent of budgetary reductions and their response to austerity. In some cases the
delegation of responsibility for cuts has reinforced social dialogue, albeit in a context of
concession bargaining, whilst other local authorities have been geared towards more
unilateral cuts in terms and conditions.
While social dialogue at the national level is very limited, in a context of wage freezes, at
local level, as the case studies illustrate there is scope for staff involvement and consultation
that enables local productivity deals and can ameliorate to some extent the negative effects
of austerity. Overall, although there has been some negotiation and consultation at sectoral
level, the current context has limited the scope for agreement and created difficult industrial
relations and challenges for government, employers and trade unions. Whilst much of the
institutional architecture has remained intact so far, there is ongoing debate and proposals
1
for pay reform. These proposals may strengthen national frameworks of pay determination
by increasing flexibility, but trade unions suspect that they are intended to erode national
pay determination, restrict trade union involvement by strengthening managerial
prerogatives and reinforce moves towards stronger and more individualised forms of
performance management.
Introduction
The United Kingdom (UK) has often been identified as in the vanguard of public sector
reform and for many decades has enthusiastically embraced policies of marketisation,
managerialism and measurement in reshaping public service employment relations. This
legacy has been very significant in framing the Conservative-led Coalition’s response to the
economic and financial crisis. The disproportionate reliance of the UK economy on revenue
from financial services, the decision to bail out the ailing finance sector, and the need to
stimulate the economy after 2008 contributed to a sharp increase in the deficit. The
coalition government in office since 2010 has focused on fiscal consolidation by shrinking the
state, cutting public expenditure and reducing public sector employment (Bach, 2012;
Grimshaw 2012). In qualitative terms the coalition has revisited and recalibrated familiar
Conservative Party themes, promoting a larger role for private sector provision and
challenging national pay determination and the role of public sector trade unions. In
quantitative terms the commitment to reducing the structural deficit has led to an emphasis
on sharp reductions in public expenditure and this has been translated into public sector
employment cuts and a pay policy based on an initial two year wage freeze. This has left
limited scope for workforce engagement and dialogue with public sector trade unions. This
report outlines the structure of the public sector and patterns of social dialogue, considers
austerity measures and the way in which they have been implemented, before examining
the responses of two local authorities to budgetary reductions.
1. Public Services and public sector social dialogue
Overview of public services and employment
According to the UK national accounts the public sector is divided between central
government, local government and public corporations. This three-fold classification of
different parts of the public sector is based on their legal and administrative responsibilities
and the extent of financial independence. First, 2.7 million staff are employed by central
government. It includes all government departments, executive agencies and nondepartmental public bodies who are controlled and financed by central government. This
sector includes HM Forces and the National Health Service and academy schools because
they are not controlled or financed by local government. Second, 2.6 million staff are
employed by local government covering a specific geographical location. Local government
includes social services, police, fire, schools (i.e. those controlled by the local education
authority) and other staff employed in environmental and civic services. Finally, 485,000
staff are employed in public corporations that are companies or quasi-corporations
controlled by government, but with substantial freedom to conduct their activities along
commercial lines, such as the Royal Mail and London Underground Ltd. The headcount in
this category swelled in the aftermath of the crisis (by @200,000) because many banks were
reclassified as public corporations following government financial intervention (Table 1).
2
Institutions and main features of social dialogue in the public sector
The term social dialogue is rarely used in a UK context and instead public sector analysis has
focused on the distinctive, but changing, features of employee involvement and
participation in the public services over recent decades. In particular attention has
Table 1: UK Public Sector Employment from 1991 – 2011a
Central Gov
(incl. NHS)
[A]
2007
2008
2009
Date
2010
2011
2012 Q1
2012 Q2
% change
1991-97
1997-2010
2010-2012 Q2
Local
Gov
[B]
Total
General Gov
[A+B]
Total Public
Corporations
Total Public
Sector
Of which:
Civil
Service
2,716
2,713
2,815
2,823
2,762
2,763
2,589
2,971
2,951
2,940
2,935
2,789
2,660
2,593
5,687
5,665
5,754
5,758
5,550
5,423
5,182
355
359
561
539
508
485
481
6,042
6,024
6,315
6,298
6,058
5,908
5,663
539
523
527
522
488
464
459
0.21
20.8
-8.3
-11
6.2
-11.7
-6.2
12.9
-10
-40
54.4
-10.8
-9.5
15.7
-10.1
-13
1.2
-12.1
Source: ONS; Publication: PSE, available at http://www.ons.gov.uk/ons/rel/pse/public-sector-employment/q22012/tsd-pse-time-series.html
a UK, headcount, not seasonally adjusted; thousands
concentrated on the changing dynamics of collective bargaining, especially in terms of
bargaining level and coverage. National pay determination has adapted, but remains
resilient, with limited appetite for radical devolution amongst employers, government or
trade unions. The scale of fiscal consolidation, however, is reigniting concerted attempts by
government to challenge national pay determination. The coverage of collective bargaining
has also altered with the growth of the system of independent pay review, but this change
cannot be equated with a shift towards unilateral government decision making, despite the
government having the authority to reject review body recommendations. In practice
employers and trade unions submit evidence and commission their own research and the
process can be characterised as a form of arms-length bargaining. Finally, employers have
placed more emphasis on direct communication and involvement of their workforce and
shown a greater willingness to impose changes in terms and conditions than in the past,
although this still represents a minority trend.
Collective bargaining and the right to strike has been a long-standing feature of the model
employer tradition in which voluntary collective bargaining and trade union membership
were the norm (Beaumont, 1992). Public sector employment relations was characterised by
national negotiating machinery accompanied by local consultative arrangements. In addition
to industry collective bargaining structures, at employer level, joint consultative committees
(JCC) were established on a voluntary basis, comprising employer and employee
3
representatives. JCCs tended to focus on non-pay matters such as agreeing local disciplinary
and other procedures and acted as a forum for employers to communicate their plans and
consult with local trade union representatives. JCCs were present in around 40 per cent of
public sector workplaces in the early 1980s (those with 25+ employees) and declined to a
third in 2004 (Bach, Givan and Forth, 2009). Over the last two decades employers have
placed much greater emphasis on the direct involvement of their workforce, for example, via
annual staff attitude surveys (see Cabinet office, 2012a).
This traditional approach was challenged by the Thatcher government (1979-1997) who
engaged in extensive privatisation and eroded public sector trade union influence. More
emphasis was placed on single employer bargaining rather than industry bargaining,
implemented most fully in the civil service. The Labour government (1997-2010) favoured
more local flexibility within national systems of pay determination but at the same time
encouraged social partnership to assist modernisation. Major reforms of pay determination
occurred in the NHS as part of its Agenda for Change reforms and in local government there
were moves towards single status. The main consequences of these changes were: pay
systems were equality proofed reducing the risk of equal value claims; the scope for flexible
working was increased by harmonising terms and conditions; and pay was substantially
improved for many groups, especially the lowest paid. At the same time, the system of pay
review was extended, determining pay for 2.5 million workers that by the end of the Labour
government’s term in office included nurses, doctors, teachers, senior civil servants, the
armed forces, prison staff and the police.
In summary, the UK model of public service employment relations is characterised by
industry specific national agreements, in large bargaining units, with high levels of workforce
coverage. There is extensive trade union involvement that establishes the scope for local
union involvement in interpreting national agreements and other matters clear. Many
aspects of work organisation, including the size and composition of the workforce and
systems of employee involvement are largely left to employer discretion. There are relatively
few legal obligations in terms of employee voice (with important exceptions such as in
redundancy situations), providing scope for local variation and differing levels of workforce
involvement. This local flexibility is reinforced by central government policy which focuses
on targets for expenditure reduction rather than centrally prescribed staffing levels.
2. National austerity: Influences and measures
Influences
In 2010 the parliamentary election did not produce a clear outcome, but after a short period
of cross-party negotiations, the Labour government was replaced by a Conservative-led
coalition government committed to fiscal consolidation. The immediate trigger and main
justification for phased reductions in public expenditure has been the coalition’s
commitment to a fiscal mandate that aimed to achieve expenditure balance by 2015-16. The
2010 Comprehensive Spending review included a target to reduce the deficit from 8.4 per
cent of GDP in 2009 to 0.4 per cent by 2015 with three quarters of deficit reduction linked to
public spending cuts; tax increases have not played an important role (Treasury, 2010). The
government has acknowledged that one of the deepest recessions of any major economy,
4
reflected in very weak economic growth, has curtailed deficit reduction. The government
responded by extending its timeline to achieve its fiscal mandate and by unveiling additional
budgetary savings in Autumn 2012 (Treasury, 2012).
As its approach to fiscal consolidation indicates, the political ideology and underlying
economic assumptions of the coalition government constitute important drivers of austerity.
The starting point is criticism of the previous Labour government’s expansion of ‘big
government’, using prescriptive performance targets to undermine professional autonomy
and user involvement (Blond, 2010). This required a new approach ‘social responsibility not
state control; the Big Society not big government’ (Conservative Party, 2010: 35). There are
also, however, continuities with Labour government policy because it was the previous
government that emphasised the importance of more diverse service provision and
outsourcing. Much more emphasis is being placed on private sector delivery with an
enhanced role for voluntary organisations and ‘mutuals’ under the banner of ‘The Big
Society’ (Bach, 2012). There are also longer-term influences on reforms of public sector
employment relations, notably demographic changes with an ageing population putting
increased pressure on public expenditure, reflected in increased health and social care
expenditure (Johnson, 2012; Muir, 2012) In addition, technological change is having an
impact on the delivery of public services with more services being provided exclusively
online. This has led to the closure of civil service workplaces and benefits offices and the
expansion of public sector call centres.
Different sectors have been impacted differently by budgetary reductions. Local government
has been especially hard hit, required to reduce spending by 27 per cent in real terms
between 2010-11 and 2014-15, with a greater impact on poorer authorities (Taylor-Gooby,
2011). Central government, which includes the civil service, has been subject to budgetary
reductions of around 8 per cent, but there are big variations between departments with
defence for example confronting budgetary reductions in excess of 20 per cent. By contrast
health, which experienced unprecedented increases in funding prior to 2010 remains a
government priority and is relatively protected in real terms. Overall, local government
confronts the most severe process of adjustment, with central government also required to
make significant cuts in expenditure and the NHS continues to be relatively protected but in
a sector that historically has confronted growing demand.
Measures
The scale of public expenditure reductions planned encouraged the coalition government to
restrict the general government paybill that comprised £182 billion in 2009, about 30 per
cent of all government expenditure (Institute for Fiscal Studies [IFS], 2011). Measures have
been targeted at pay awards, pension provision and staffing reductions. Austerity measures
have been dominated by quantitative cuts in staffing and wages. At the same time the
coalition has also used its emphasis on deficit reduction to reinforce qualitative, structural,
reforms of public sector organization, notably the NHS. The Open Public Services White
Paper envisages more provider diversity with many more services in local and central
government being put out to tender in areas such as planning, environment, housing,
children’s services, immigration and court administration (Cabinet Office, 2011b). There
have also been challenges to national pay determination and existing systems of trade union
involvement. The main instrument of austerity implementation has been via financial
control, which in the highly centralised UK system of government, is tightly controlled by the
5
Treasury. In contrast to many other countries there are no prescribed targets for staff
replacement ratios; instead local employers are required to achieve a balanced budget and
have some discretion about how they reduce expenditure.
In addition, the coalition government has commenced a process of deinstitutionalisation,
whereby many of the institutions built up during Labour’s period of government which
supported workforce modernisation and development are being abolished or merged
accompanied by substantial job losses (Bach and Kessler, 2012). An important component of
this process of deinstitutionalisation has been a questioning of the utility of national pay
determination and government support for more flexibility via ‘market-facing’ pay. The
objective is to make public sector wages more sensitive to local labour market conditions,
intended to lower public sector wages in lower-cost areas, using sympathetic think-tanks to
make the case for these changes (e.g. Homes and Oakley, 2012). This stems from the
coalition government’s assertion that: ‘the overall value of the public sector reward
package, including pension provision, has been generous in recent years’ (Treasury, 2010:
37). The coalition government has encouraged employers to change substantive terms and
conditions (e.g. sick pay/annual leave provisions) and procedural agreements (e.g. trade
union facilities time).
The coalition set out its initial plans for public expenditure in an emergency budget in June
2010 that announced a two year wage freeze that it anticipated would save £3.3 billion by
2014-15 (HM Government, 2010: 17). It also included plans to reform public sector pensions
and adopted the Consumer Price Index (CPI) measure of inflation rather than the Retail Price
Index (RPI) – a lower measure of inflation – in indexing benefits and public sector pensions.
The public sector workforce is experiencing a four year period of wage restraint – two years
of a pay freeze, followed by two years when pay awards are limited to an average 1 per cent.
A two-year pay freeze on pay awards covers 2011-12 and 2012-2013 across all areas of the
public sector with some protection for staff earning £21,000 or less (but not in local
government). This exemption covers 1.7m or 28 per cent of all public sector workers (IFS,
2012: 111). In addition, because public sector workers in health, local government and some
parts of the civil service are covered by progression arrangements - annual pay increments average public sector pay is still growing in nominal (but not real) terms. The Office of
Budget Responsibility (OBR) has estimated that public sector pay will grow by 2 per cent in
2011-2012 and by 0.8 per cent on 2012-2013, well below price inflation and pay awards in
the private sector. Public sector employers, however, confronted with severe budget
reductions over a sustained period of time have examines ways to exert more forceful
downward pressure on the paybill by freezing wages and increments, scrutinising other
components of pay, occasionally cutting nominal wages, considering further externalization
of services, and examining the composition of the workforce.
In the civil service, the government is the direct employer and the Treasury and the Cabinet
Office, are able to exert direct control over the paybill despite the delegation of pay
determination to individual departments and agencies in the early1990s. The two year payfreeze was first implemented in parts of the civil service in 2010-11, before the NHS and
local government, for those groups that were not under a pay deal. Consequently many civil
servants will be in the first group to exit the pay freeze and come under the successor 1 per
cent wage policy. The main emphasis in the civil service is to reduce headcount (see below)
6
in part because the combination of a wage freeze and the limited use of incremental
progression provides limited scope to control further the civil service paybill.
By contrast, NHS employers have expressed dissatisfaction as to how far the national pay
system Agenda for Change is ‘fit for purpose’ in an era of austerity. Employers have started
to question and seek reforms to those parts of the paybill that are not subject to the
government pay freeze, such as incremental progression and sick pay. To date, there has
been less emphasis on headcount reduction than in the civil service or local government.
This reflects the more protected financial settlement for the NHS and the requirement on
NHS employers to achieve their waiting time and other service targets that are highly
dependent on adequate staffing levels. There is also more scope within the NHS to alter the
composition of the workforce, for example, making more use of nursing assistants rather
than registered nurses and more generally altering the grade mix of the workforce.
Pensions
The coalition government viewed reforms to pension provision as an important component
of its ambition to ‘deprivilege’ public sector pay and conditions. It has continually portrayed
public sector pensions as overly generous and this has gained some traction with the public.
This stems in part from the abdication of private sector employers in taking responsibility for
providing pensions. Only 34 per cent of private sector workers are members of a workplaceprovided pension compared to 84 per cent in the public sector and private sector employers
are replacing defined benefit pension schemes with defined contribution schemes (IFS,
2012: 106-7). Nonetheless although public sector pensions are more generous than the
private sector, they remain very low. In 2009-10 the median public sector pension was
around £5,600 and the government’s pensions inquiry ‘firmly rejected the claim that current
public sector pensions are “gold plated”’ (Hutton, 2011: 26).
The government accepted the recommendation of Lord Hutton’s Independent Public Service
Pensions Commission (Hutton, 2011) and built on these changes. The main government
changes include:
• pensions are being indexed and uprated in line with the Consumer Price Index (CPI)
measure of inflation rather than the Retail Price Index (RPI) – a lower measure of inflation;
• the normal pension age, the age at which a full pension can be received, is to be aligned
with the state pension age which is moving in steps from 65 to 67 to 68 by 2044/5 and these
changes have an even more dramatic impact on women whose current retirement age is 60;
• workers’ contributions are being increased and are tiered for different income levels with
the highest earners facing the largest percentage increases;
• Defined benefit schemes will remain in the public sector, but will switch from final salary
based schemes to career average based schemes with public sector workers’ accrued rights
(but not their future rights) protected from any changes.
An additional complication of pension reform is that there are separate pension schemes for
the civil service, teachers, local government and the NHS: they are not only financed in
different ways but also existing employer and employee contribution (and accrual) rates
differ markedly. These pension reforms created widespread anger amongst public sector
workers at a time of pay restraint, provoking industrial action by doctors in June 2012 for the
first time since 1975. However, ambivalent public attitudes and differences between the
schemes created scope for the government to open up divisions between trade unions
whose members are affected in very different ways by the reforms. This has been reflected
7
in the range of outcomes in trade union membership ballots; from rejection through to
endorsement of negotiated deals. Trade unions generated considerable mobilisation against
pension reform during 2011, but ultimately a lengthy and complex process of negotiation
has generated broad agreement in the civil service, NHS and local government and the
agenda has shifted to other components of austerity.
Employment reductions
There is no separate public sector employment statute in the UK and in the context of a
lightly regulated labour market, employers have few constraints if they opt to reduce their
workforce. Employment protection has been reduced further, for example, the coalition
increased the qualifying period for protection from unfair dismissal from one to two years
and the government has plans to amend other employment protections such as TUPE
(Treasury, 2012). Employment reductions are not novel because the Gershon Report
recommended the removal of around 70,000 civil service posts after 2004 and privatisation
and outsourcing have also contributed to fluctuations in employment. Nonetheless the scale
of reductions in a short time period is unprecedented. The Office of Budget Responsibility
(OBR) initially predicted in June 2010 that public sector employment would decline by
490,000 jobs by 2014-15 but this forecast has been increased several times and the latest
forecast suggests that 730,000 jobs, around 13 per cent of general government
employment, will be removed by 2016-17 (OBR, 2012). The civil service and local
government have been most impacted by employment reductions.
In the case of the civil service, in 2010 the coalition government implemented a recruitment
freeze on permanent civil servants, fixed-term appointments and temporary staff, except in
exceptional circumstances, and implemented a moratorium on employing consultants. Most
important was the coalition government’s decision to abolish or merge 262 central
government organisations including the Audit Commission, the General Teaching Council
and Regional Development Agencies. The intention was to save £2.6 billion but this figure
has been disputed (National Audit Office, 2012). There was no consultation by government
on the abolition of departments and agencies but trade unions have some involvement in
the process of staff reductions. In 2008, following the rather unsatisfactory process of job
cuts under Gershon, ‘protocols’ were established to provide a framework for staff
reductions. This process enables a systematic review of each civil service redundancy and
attempts to redeploy civil servants into other roles. The future and effectiveness of the
protocol process is uncertain because they were not designed to deal with large-scale, civilservice wide, redundancies. There is not only limited time and capacity to review every job
loss, but the scope for redeployment is very limited in the current context. A related
development was the implementation of a revised civil service compensation scheme at the
end of 2011. It reduced redundancy terms and altered the scheme to provide higher
compensation for those opting for voluntary rather than compulsory redundancy. These
changes were accepted by four trade unions, but opposed by PCS, the largest civil service
trade union that launched unsuccessful legal action (PCS, 2012a). The changes were deemed
‘reasonably necessary’ to achieve the legitimate aim of reducing the deficit (The Guardian,
2011).
Employment reductions have been much less pronounced in the NHS although individual
NHS trusts have been engaged in a continuous process of mergers and restructuring,
8
reflecting ongoing NHS reforms. Responses from over 34,000 NHS trade union members
surveyed during summer 2012 indicated that in their workplace the most common
responses to financial challenges were respectively restructuring services, recruitment
freezes and reductions in posts cited by around 60 per cent of respondents. A major concern
of many professional trade unions and their members is the increase in ‘downbanding’,
reductions in the grades of posts following service reconfiguration often accompanied by
reductions in posts. One of the most marked trends in recent years, but which pre dated
austerity measures has been the growth of unregulated health care assistants and assistant
practitioners which has directed attention at the importance of adequate training and
induction to ensure effective patient care and safe staffing levels (RCN, 2012).
Consequences for social dialogue
In the civil service, national dialogue between the government and trade unions continues
within the national trade union council (NTUC) (formerly the Council of Civil Service trade
unions - dissolved in 2010) but in common with other parts of the public sector there was no
consultation with employers or trade unions prior to the announcement of the wage freeze.
There has been very limited consultation with the social partners over the austerity
measures adopted but there has been consultation and negotiation at sectoral level that has
ultimately led to agreement on issues such as pension reform. At national level the coalition
government has had much less engagement with public sector trade unions than its
predecessor, but it has maintained formal institutional linkages between the trade unions
and government. The Public Services Forum is a tripartite forum chaired by a Minister from
the Cabinet Office. It brings together trade unions, employers and government and includes
other major players such as large private sector outsourcing companies and the voluntary
sector. It is not a negotiating body, but the government presents its plans on public services
reform and seeks feedback on its policies. The Public Service’s Forum, however, has not
issued any joint statement on the crisis or how to deal constructively with the deficit. There
has also not been the same regularity of meetings as occurred under the previous Labour
government. Although in general formal institutional structures have remained in place,
trade unions have much less influence over the formulation and implementation of policy
and have mobilised on issues such as pension reform to amend government plans.
Sectoral level social dialogue on a bilateral basis has been more important than national
level in reaching agreement on pay and pensions. In the civil service the Council of Civil
Service Trade Unions was replaced by the National Trade Union Committee that brings
together the main trade unions that represent staff in central government to discuss policy
with the Cabinet Office and Treasury. Since the shift to delegated bargaining, however,
much of the focus is on negotiation and consultation at individual department and agency
level. The NHS has a strong tradition of social partnership working, championed by New
Labour, with many partnership agreements amongst NHS trusts. In addition to the NHS Staff
Council that negotiates and interprets the Agenda for Change pay system, the NHS Social
Partnership Forum (SPF) considers the workforce implications of national policy. This forum,
overseen by the Minister of Health, has continued under the Coalition government and was
refreshed in February 2012. The SPF had a mixed record under Labour (Bach and Kessler,
2012: 141), but it has had an important role in working through the HR implications of NHS
reorganisation and ensuring staff are treated appropriately, although it does not conclude
formal agreements. As in the past, uncertainty remains about how far its deliberations are
9
embedded within the wider NHS in a period when employers are committed to altering
Agenda for Change, preferably by negotiation but if required some employers have signalled
an intention to proceed on a unilateral basis.
Responses of social partners
Employers have expressed considerable ambivalence towards austerity, but have viewed it
as an opportunity (even if only a partly welcome one) to remodel service provision and
revisit aspects of employment relations that they consider need to change. Employers,
recognise that the scale of the cuts requires a step change in how they manage their staff
and that incremental change is insufficient. At the same time, despite the scale of fiscal
consolidation, employers frequently refer back to antecedents such as the implementation
of mandatory competitive tendering in the 1980s that instigated radical changes in pay and
working conditions. The implication being that the scale of the challenge is unprecedented,
but major changes in terms and conditions have been implemented in the past. Amongst
employer preoccupations, moves towards a more performance orientated culture, focused
on criteria such as individual attendance and contribution, with less emphasis on senioritybased progression is a high priority across the public sector.
Crucially, however, employers do not necessarily have the right industrial relations and HR
capabilities within their organisations to manage change effectively and HR managers
themselves are vulnerable to outsourcing and downsizing. The need for quick results has
tempted some employers to return to the macho management of the 1980s and impose
change with little workforce consultation, but the majority of employers recognise the need
to communicate and engage with staff concerns about changes in pay and working
conditions and would be wary of unilateral imposition of change.
The need for rapid expenditure cuts has been widely contested and the consequences
viewed as self-defeating because of the detrimental effects on economic growth of deep
expenditure cuts. Motions at the Trade Union Congress (TUC, 2012: 5) rejected: ‘this
government’s programme of austerity, which has caused a double-dip recession and a
stagnant economy leading to the deterioration of living standards…concerns about UK
growth have been expressed by the Bank of England, as well as the IMF and OECD’.
Public expenditure cuts have limited the scope for agreement and created a difficult
industrial relations climate. Although some of the institutional architecture of social dialogue
remains in place trade unions express strong frustration at their inability to influence a
government that is viewed as intransigent and unreceptive to union arguments. Some
aspects of government policy are viewed as especially detrimental to effective employment
relations and indicate a disdain for union involvement. In summer 2012, the government
launched a consultation on trade union facility time that will place strict limits on paid
facility time, curbing union capacity within the civil service and other parts of the public
sector (Cabinet Office, 2012b).
There have been a number of local disputes that have usually concerned the imposition of
worse terms and conditions or job losses. In Barnet in North London, one day strikes during
2011 were held to protest against service wide contracting out and job losses; plans that
were subsequently curtailed, but are still under active consideration. At national level, the
TUC has organised days of action to highlight opposition to austerity measures and to put
pressure on employers to improve their offer, especially in respect of pension reform. The
most high-profile action took place on November 30th 2011 when a series of one day strikes
10
culminated in co-ordinated action amongst thirty trade unions with the participation of up
to two million public sector workers and encouraged some concessions from government in
relation to pensions (Hall, 2012; Musafer 2012).
As Table 2 indicates there was a spike in public service industrial action during 2011, but it
has not continued into 2012 and the data does not seem to indicate a sustained upwards
shift in terms of mobilization. Moreover, in comparison to some EU countries strike action in
the UK has been relatively limited and much more protest is evident in countries such as
Greece, Italy, Spain and Portugal.
Source: Office for National Statistics, available at: http://www.ons.gov.uk/ons/publications/re-referencetables.html?newquery=*&newoffset=50&pageSize=25&edition=tcm%3A77-230793
Public service trade unions have faced major challenges in organising industrial action. First,
there are the longstanding legal obstacles with unions only provided with legal immunities if
the dispute is a trade dispute with their members’ employer. Consequently a general strike
would be deemed a political strike and therefore unlawful. Attempts to co-ordinate
mobilisation against the government requires an individual mandate from each union
membership and then co-ordinated action between unions on the same day – a complex
political and logistical challenge that has only been achieved on rare occasions. Second,
public service trade unions acknowledge that their members’ are very fearful of taking
industrial action because in a climate of staffing reductions, declining union membership (as
jobs are lost) and squeezed living standards there is a reticence about taking industrial
action that will result in a loss of income and which may have a limited impact on the
employer. These sentiments have often been reflected in relatively low turnouts for
industrial action and small majorities for action. There has been discussion amongst trade
unions about ‘smart strikes’ denoting methods that maintain public support and hit
government revenue (such as the withdrawal of local authority parking ticket inspectors)
and limit the loss of wages. These tactics, however, seemed to have largely faded from view.
Third, there is a reluctant acceptance amongst many public service trade unionists that fiscal
consolidation is necessary and that there may be limited sympathy amongst the public and
hard pressed private workers. For these reasons the TUC has tried to widen support and
branded protests as of relevance to the whole workforce. The November 30th 2011
11
demonstration was for ‘pension Justice’ and in October 2012 a further protest against
austerity was for ‘a future that works’. There is certainly much interest amongst trade
unionists in campaigns that link up with service users to contest cuts and campaigns that
build wider alliances with a variety of campaigning groups.
In this difficult context, legal challenges have become an important trade union strategy to
contest government and employer actions. PCS launched a legal challenge to contest the
new civil service compensation scheme, which was imposed in December 2011. Although
not successful, an alliance of trade unions and the Civil Service Pensioners' Alliance appealed
against the decision to use CPI instead of the RPI to calculate pension rises (Prospect, 2012).
In health, Unison was successful in its employment tribunal case against Central Manchester
University Hospitals NHS Foundation Trust. In education, the NASUWT has taken the first
steps towards judicial review over the Teachers’ Pension Scheme (Murray, 2012) and the
NUT has considered legal challenges over Education Secretary Michael Gove’s free schools
policy. Trade unions have also started to build coalitions with service users such as ‘Keep our
NHS Public’ and a visible sign of these initiatives are the proliferation of anti-cuts websites,
with varying degrees of union involvement and financing such as ‘False Economy’
http://falseeconomy.org.uk/about. Public service trade unions have also been active in
developing materials that contest the argument for austerity and put forward alternative
plans for public sector reform (PCS, 2012b; Prospect, 2012).To date, however, these
strategies have had a limited impact on government policy.
3. a Sectoral Trends: Local Government
Local government comprises the largest component of public sector employment, employing
just under half the public sector workforce. Local authorities have the capacity to raise taxes,
and are governed by councillors subject to local election. In contrast to the NHS and the civil
service, this provides scope for policies, such as austerity measures, to be periodically
scrutinised and challenged in local elections. Successive governments have been wary of
local government and continuous managerial reforms have resulted in local government
becoming increasingly dependent on central government finance and subject to intensive
central government scrutiny, despite government rhetoric of ‘localism’. Local government’s
monopoly role in service provision has been eroded by outsourcing and the establishment of
new providers (such as academy schools) outside of local authority control. Nonetheless it
has responsibility for a wide range of local services including schools, social services,
environmental and leisure services and libraries (see appendix 1) although not all local
authorities provide all these services. Unitary authorities are all-purpose authorities that
provide most services and are located mainly in London and metropolitan areas. By contrast
in some areas a two-tier local government structure exists divided between county and
district councils. Social services are provided by unitary authorities and county councils but
not district councils. This is significant because social services are a costly and highly
politically sensitive service, so its absence may make it less challenging to manage budgetary
reductions. In addition significant funding variations exist between geographical area, type
of authority and individual service with local authorities serving the most deprived areas
experiencing the largest cuts (Audit Commission, 2011a; IFS, 2012).
Local government employs just under half the public sector workforce with school teachers
comprising the largest component of the workforce, but their pay and conditions are subject
12
to separate pay arrangements from the remaining 1.6 million local authority workers. Local
authorities are independent employers but they are covered by national pay bargaining –
the national joint council (NJC) for local government services although this has been in
abeyance for several years because of the wage freeze. Employer and trade union
negotiating bodies comprise the Local Government Association and the main local
government trade unions – Unison, GMB and Unite.
In addition about 10 per cent of councils (around 30) in the South East of England have
opted out of national pay bargaining and determine their annual pay increase locally. This
occurred in the late 1980s and early 1990s in response to recruitment and retention
difficulties, although in practice they often follow the NJC awards. Local authorities have the
greatest degree of employer autonomy in the public sector and individual councils have
discretion over how they match their pay scales to the national negotiated pay spine agreed
as part of the move towards ‘single status’ (see Perkins and White, 2010). Grading structures
and the positioning of jobs within the grading structure is decided locally. In addition to pay,
the NJC agreement (the ‘Green Book’) includes a range of core national conditions (Part 2)
such as sick pay, a standard 37 hour week and annual leave whilst part 3 sets out car
allowances, premium payments, overtime that can be varied locally. Trade unions are
unwilling to negotiate on core conditions at local level because they are regarded as
minimum core national conditions and could undermine the national agreement.
Wage freeze
Local government has been hit hard by budgetary reductions but the responsibility lies with
each authority in terms of how they respond. Local government is not within the remit of
the government’s public sector pay and therefore has greater scope to depart from
government pay policy, if financial circumstances permit. This autonomy, however, is in
practice highly constrained, given local government’s dependence on central government
funding and the requirement on each authority to balance its budget. There has been some
difference in response from the sector, but this has actually resulted in a lengthier period of
pay restraint than other sub-sectors. Local government employers had already decided not
to make a pay offer in 2010, even before the coalition government decided to impose a two
year pay freeze. In 2011 the local government employers made no pay offer and this was
extended into an unprecedented third year. In February 2012 the employers declined to
make an offer stating that: ‘There is genuine sympathy for the position of the lower-paid
but councils told us that the economic situation is such that any pay award could only be
met through further job losses and cuts to services’ (cited in IDS, 2012b).
This angered the trade unions who requested arbitration which was refused, but employers
did signal that in 2013 they would seek to make a pay award but this would be in exchange
for changes in national terms and conditions. The employers’ organisation is in a difficult
position. It is dominated by Conservative councils, of differing ideological hues, with some
harbouring private reservations about the severity of cuts being initiated by a Conservative
led coalition. At the same time there is an institutional interest in maintaining its relevance
as an employers’ organisation and to maintain the national agreement, but this is difficult
when national bargaining has been in abeyance for three years. Trade unions, like in the
NHS, also recognize the need to alter the Green book to safeguard the national agreement,
even though considerable flexibility exists at local level already. A dilemma for trade unions
13
is that in the absence of any national pay increase and falling living standards, unsurprisingly
there is some membership pressure to negotiate at local level which could jeopardise the
national agreement.
At local level, there have been some straightforward changes that the majority of local
authorities have introduced, such as reducing mileage rates for car users, but there are
significant variations in the approach adopted by local authorities, linked to the degree of
financial stress councils are facing, their political complexion and variations in managerial
strategies. Undoubtedly local authorities have confronted some of the most difficult
financial challenges in the public sector and this has been reflected in their willingness in
some cases to impose new terms and conditions on staff if agreement cannot be reached.
A survey of 224 councils conducted by the Local Government Association (LGA) in December
2010 and then repeated in September 2011 identified a high level of local activity designed
to generate short term savings (LGA, 2012: 10-11). Over half of local authorities had reduced
car allowances whilst around a quarter were changing their sick pay schemes. This is
especially significant because sick pay is contained in Part 2 of the Green Book that
comprises national core conditions, suggesting a willingness by some local authorities to
challenge the national agreement despite trade union opposition. Other changes being
implemented included reductions in annual leave, premium pay rates, overtime, unsocial
hours payments and 17 per cent were considering the removal of increments (11 per cent
had already removed them). Around 27 per cent stated that changes were being considered
by trade unions, 37 per cent had not shared their plans with the unions, 23 per cent had
reached agreement with them (although this was often linked to single status rather than
budget cuts) and 4 per cent had imposed change or planned to do so.
Underlying a degree of staff acquiescence in accepting worse terms and conditions has been
the threat of dismissal and re-engagement. Section 188 of the Trade Union and Labour
Relations (Consolidation) Act 1992 allows employers to lawfully dismiss workers and reengage them on different terms and conditions, provided a period of consultation has
occurred. This is an approach that many local authorities have declined to follow because of
the inevitable detrimental effects on employment relations, but a number of high-profile
cases exist (Shropshire County Council, Birmingham City Council and Southampton City
Council are the most frequently mentioned) with employers suggesting that it was a last
resort after negotiations with trade unions failed to reach agreement.
Because lower paid workers did not receive a national £250 supplement as in other sectors,
(although some local authorities did pay it), the real value of earnings has fallen by 13 per
cent between April 2009 and February 2012 due to higher-than-expected inflation rates
(Kenway, Parekh and Aldridge, 2012).
Employment Reductions and workforce composition
Given the scale of the budgetary reductions, local authorities have targeted headcount.
Table 1 indicates that since 1997, for a decade during a period of Labour government,
employment increased before subsequently declining. The most significant reductions in
local government employment occurred after 2010 as outlined in Appendix 2 which provides
14
a detailed breakdown of trends by gender, employment status and region. The overall
change in the headcount between 2010-2012 is around 13 per cent.
A variety of other responses are being used to restructure the workforce and reduce
workforce costs. First, a common first step has been to implement a vacancy freeze and to
tighten up on the use of temporary and agency staffing. Second, local authorities are
engaging in a variety of partnerships with collaboration in sharing services. Many local
authorities are using shared services models to share HR, legal and other services. The
partial merger of the three London Boroughs of Hammersmith and Fulham, Kensington and
Chelsea and Westminster has attracted a great deal of attention and has led to a marked
reduction in managerial posts. Some local authorities have gone further and considered
wholesale outsourcing of services, such as Barnet and Suffolk, but the level of risk involved
and the potential loss of managerial control has led to reconsideration and some scaling
back in the scale of ambition. Nonetheless outsourcing has increased and there is a degree
of path-dependency in some services – it’s very difficult for local authorities to bring back
inhouse services such as refuse collection if they have removed their in-house capacity (staff,
depots, refuse trucks etc), but recourse to outsourcing is not a wholly uniform pattern. Some
local authorities see more scope for savings by engaging with their workforce, generating
internal efficiencies and have brought some services back in-house whilst re-engineering the
way services are delivered (APSE, 2011). Third, some councils, such as Sunderland, have
developed sophisticated redeployment models to minimise job losses whilst ensuring that
the council employs staff with the right skills (Audit Commission & LGA, 2011). Finally, given
the scale of cuts councils are retrenching and focusing on statutory services, leading to the
downgrading or withdrawing of services, such as youth services. In other cases, such as
libraries, attempts are being made to run them on a voluntary basis without recourse to paid
staff, but it remains to be seen if this is a viable long-term solution (Bach, 2012).
3. b A Tale of Two Cities: Coastal and MidTown
Coastal: Rational for case selection
Coastal City Council was one of the first local authorities to implement pay cuts promoted as
a way to reduce the number of job losses. The inability of the employer to gain agreement
for this strategy led to widespread industrial action and the imposition of wage cuts. The
Coastal dispute attracted national media coverage and had wider implications beyond
Coastal. It was a test case firstly, in terms of the effectiveness of an assertive employer
strategy that included unilateral changes to terms and conditions and limited engagement
with the workforce. Secondly, it was a very important dispute for the public sector trade
unions in terms of their capacity to amend employer plans and to discourage other local
authorities from pursuing a similar strategy.
Background
Although Coastal is located in the South of England, usually associated with lower union
membership, it is an industrial city and the city council has often been Labour controlled.
The Conservative Party had gained control of the council in 2008 and had outsourced back
office functions such as HR. The industrial relations climate had deteriorated as the trade
unions suggested that there was less consultation and limited workforce involvement under
15
the Conservative leadership. This uncertain industrial relations climate was made more
difficult by the fact that HR was under-resourced and was managed by a non-HR manager. A
new CEO joined the council in November 2010.The two main trade unions in the council
were Unite and Unison with respectively 800 and 600 members.
Proposals
Following the announcement of coalition cuts in Autumn 2010 the Conservative led
administration were facing funding reductions of around £4.6million of reduced revenue
grants for 2011/12 as part of a continuing budgetary tightening up to 2015. The overall
cumulative funding gap added up to a total of around £57 million over the four years to
2014/15 (Audit Commission, 2009/2010). The overall council budget in 2011 was almost
£200 million. The Conservative leadership proposed that 400 less redundancies would be
necessary if the workforce accepted permanent pay cuts to be implemented from 31st
March 2011. The final employer offer was tabled in January 2011 and had been adjusted
several times since autumn 2011. It included the removal of increments and included pay
cuts of between 2 and 5.5 per cent, depending on annual income levels. Specifically, those
Coastal employees earning above £17,500 were faced with a 2 per cent cut, those earning
£22,000- £35,000 with a 4.5 per cent cut rising to a 5.5 per cent cut for those earning over
£65,000 (Gall, 2011). The council offered to pay a £250 increase to those earning less than
£17,500 and also included additional annual leave to compensate more senior managers for
larger cuts in pay. Other allowances were also reduced, including mileage rates, or removed
such as market supplements. The council emphasised that planned changes in pay and
conditions, would generate annual savings of around £6.6 million of the approximately £25
million budget hole needed over successive years (Smith, 2011).
A distinctive feature of the dispute was that the discussions between the council and the
workforce were led by the elected political leadership rather than the chief executive, the
top manager (officer in the jargon) of the council. This may have contributed to the difficulty
of resolving the dispute because there were very polarised political differences between the
Conservative councillors and the trade union representatives, which would have been less
visible if the negotiations had been led by politically neutral officers. Although discussions
were held with Unite and Unison, the sticking point for the trade unions remained not only
the loss of income in a period when wages had been stagnant for several years, but also
uncertainty if jobs could be guaranteed even if wage reductions were accepted. The trade
unions also proposed alternative savings options (e.g. on museum expenditure), contested
privatisation (e.g. of leisure services) and opposed reductions in staffing levels in libraries
and Sure Start Centres and threats to facilities time for union representatives.
The trade unions started to prepare their strategy that had three dimensions that
comprised: industrial action, legal challenges and a political campaign to mobilise voters in
spring local elections to end Conservative control of the council. In February 2011, Unison
and Unite members in Coastal voted to oppose the wage cuts, voting 1,552 to 307 on a 60
per cent turn out. The council noted that while the union ballot indicated a rejection of the
proposals, the union vote only constituted a quarter of the council’s workforce – hence the
representativeness of the ballots was questioned. It also influenced trade union strategy
because there was an awareness of the fragility of the support for industrial action.
16
Strike action
In May 2011 council workers from a range of services – libraries, refuse collectors, street
cleaners and parking enforcement – started to take rolling industrial action to put pressure
on the council to abandon their plans to amend their terms and conditions of employment.
Around 4,300 (of around 6,600 staff) workers took significant action. Traditionally refuse
collectors are the most organised component of the local government workforce and refuse
started to pile up in the streets of Coastal. Other selective industrial action was taken by
parking attendants and toll-bridge attendants (Coastal has a council owned toll bridge) that
hit council revenue but which did not inconvenience or antagonise residents. Other
industrial action short of a strike included social workers refusing to use their own cars,
incurring large taxi charges for the council. The industrial action was supported by union
strike funds, ensuring strikers were not financially disadvantaged by industrial action.
The industrial action was regarded by many commentators as a wider statement against
austerity and accompanying government’s policies as a whole. Leaders of both Unite and
Unison came to Coastal to support the strikes. Unite and Unison continued to argue that
there had been no meaningful negotiations or dialogue taking place, instead the approach of
the political leader of the council was characterised as bullying in pursuit of an ideological
agenda to shrink the state.
During this period the trade unions learnt that the council planned to impose change if
agreement could not be reached. While there are different approaches to changing terms
and conditions, contractual change can be legally imposed using section 188 notices to
pressurise staff to accept revised terms and conditions through a process of dismissal and
re-engagement. However, a clear business case is needed, employees have to be consulted
for the statutory 90 day period and the employer must be able to demonstrate that it has
acted fairly and reasonably, if tribunal claims are to be limited (HR Network, 2011). Although
Unite and Unison could not challenge the decision to dismiss and re-engage they started a
legal challenge about the process undertaken by the authority. They argued that the council
had failed to provide the statutory consultation period and that each worker was entitled to
compensation that could amount to millions of pounds given the size of the workforce. This
was designed to put further pressure on the council leadership.
These measures, however, did not halt the imposition of pay cuts. In July 2011 the then
Conservative-led council imposed changes by dismissing and re-engaging their staff, using
section 188 of the Trade Union and Labour Relations (Consolidated) Act 1992, whereby the
‘reduced’ terms and conditions were being applied locally in order to meet the budget cuts
and avoid further job losses, although by that time around 285 jobs had already been cut.
Consequently, there was a period of heightened tension, accompanied by protest marches,
strikes and industrial action. The trade unions also turned their attention to the removal of
Conservative control in the council and had discussions with the Labour leadership about
reversing the pay cuts if they took control of the council.
Current developments
Since May 2012 Coastal has been a Labour-controlled council, and the dispute and the fact
that the unions have campaigned for Labour in the run-up to the local election may partly
have contributed to the election result. Ongoing negotiations between the unions and the
new Coastal council leadership have taken place and council employees will see their pay
17
restored by 2014. In the meantime, unions have put their ongoing industrial action as well as
their legal action against the council on hold and will ballot their members on the proposed
deal in September/October 2012 (Smith, 2012). More specifically, the proposals set out that
those staff earning between £17,501 and £35,000 will have their pay restored by April 2014;
those earning between £17,501 - £22,000 by November; and those earning between
£35,001 and £65,000 from April 2014, while no job losses shall occur as a result of this deal.
The deal will cost the council around £2.3 million to £3m. Yet, there are some indications
that some job losses and redundancies will occur. Those staff affected will be placed in a
redeployment scheme, under which they will continue to be paid for another 8 months,
while it is hoped that in the meantime alternative work within the council will be found
(which would spare the council for the need to issue redundancy payments. However, the
final outcome remains to be seen.
However, the former Conservative council leader argued that the approach taken by the
new Labour administration does not differ much and anticipates extensive job losses, taking
account of the savings required overall - £65 million. Nevertheless, the trade unions
welcome the progress that has been made thus far as positive in terms of the ongoing
negotiations and consultations (BBC, 2012; Coastal City Council, 2012).
MidTown: Rational for choice of case
After the general election and the announcements in the Comprehensive Spending Review
by the Coalition government in 2010 and the freezing of pay for three years at a national
level, the MidTown City Council commenced a process of negotiations with the relevant
trade unions, Unite and Unison, and eventually reached an agreement, the two-year
partnership payment deal, which was introduced in 2011.
This case illustrates that there are different approaches evident in the way the crisis and
budgetary pressures are being managed between local authorities as well as different
degrees to which social dialogue is taking place. In some local authorities, social dialogue at
the employer/ organisational level has increased and led to some mitigation of the effects of
the crisis through negotiations and a form of partnership working between the council,
unions and the workforce. Despite the significant trade-offs on the part of the union side,
social dialogue is likely to have avoided more negative impacts, which is in line with
conclusions by Guyet, Tarren and Triomphe (2012) who argue that “throughout the crisis,
those workers whose wages were not negotiated (…) have fallen faster than those of
workers covered by an agreement” (p. 59). The agreement has also contributed to the
radical reduction in costs - the council claims to have made around £4m of efficiency savings
a year, in the 3-year period between 2008 and 2011 (MidTown City Council Corporate Plan
2012-2017: 218). Furthermore, this case could be argued to be an example of ‘concession
bargaining’ which implies that it is rather the severity of the crisis than a strategic change in
the position of trade unions, which contributes to striking certain deals in this current era
(Guyet et al. 2012: 63). In addition, while there has been no industrial action, a protest was
held in 2010 against salary increases for senior managers (Li, 2010).
The agreement
The agreement effectively implies a cut in pay by suspending incremental pay progression.
Other changes to conditions have also been affected by the deal, which fall under part 2 of
18
the Green Book such as car allowances, pay of casual car user allowances etc. What is more,
additional areas were covered into the agreement in terms of what changes would be
implemented once the 2-year deal expired – e.g. if no new deal would be agreed,
performance-related increments with progression would be implemented. In return, the
council agreed it would: minimise redundancies as much as possible; the cuts would be
phased over 4 years and ‘natural wastage’ used. In addition, more would be spent on
training and retraining people to avoid compulsory redundancies (since then the council
reduced its workforce size by about 10% with a few compulsory redundancies).
Furthermore, it offered a potential one-off payment of £250 - £500 based upon certain
conditions relating to the attendance record and annual staff appraisal. Moreover, this
‘bonus’ would be dependent upon the council achieving its annual saving targets.
Background
While having been a minority administration between 2008 to 2010 Labour gained control of
the council since 2010. The official start of the 4-year transformation programme however is
said to have been in April 2008 (MidTown City Council, 2010). In the case of MidTown
changes have already been pursued prior to the large scale cuts and austerity announced in
the 2010 spending review which has had a significant, long-term effect in ensuring its longterm financial solvency.
In terms of the Comprehensive Performance Assessment (CPA) scores, MidTown City Council
was performing below average authority in the early 2000s– for example the results for CPA
for district councils for 2003/04 showed that MidTown was rated as “weak” (Audit
Commission, 2005) which stands in contrast to more recent comments in the Annual Audit
Letter by the Audit Commission, which states that “This is good performance given the
economic backdrop and financial pressures” (2011b, p.9).
Since around 2008, in the period prior to the Emergency Budget 2010, relations with the
trade unions gradually improved and negotiations have been held effective. In 2009 after
months of negotiations, union officials and council managers agreed to introduce a new
MidTown living wage. This implied a council-wide pay review which included the reevaluation of jobs, the introduction of a new and simplified pay and grade structure, with
some positions being up-, and some positions down-graded. In addition to that, a new
minimum rate for MidTown City Council employees was increased to £7 an hour and
subsequently uprated to £8.01 an hour in 2011.
For the Council the financial implications were small - most staff in local government are
paid above this level, but it was important symbolically in contributing to improved relations
between the council and the unions. Unison has been campaigning at a national level for the
‘Living Wage’, and thus this step signals to unions and the workforce that the council is
prepared to discuss issues of concern to the trade unions and the workforce. As Guyet et al.
(2012) suggests, the extent to which social dialogue is apparent in the crisis also largely
depends on whether the social partners have had input into policies and strategies prior to
the crisis as well. If so, it can be argued that in these circumstances social dialogue is much
more likely to be an embedded feature within the process of strategy development and
therefore more likely to continue despite severe budgetary pressures.
19
Communication and Involvement
Communication not only with unions but also with the workforce directly have been
important factors in being able to negotiate an agreement as well as in contributing to
improved relations and the management of change. An important aspect has been the
introduction of a consultation and communication strategy which included improved staff
appraisals, quarterly road shows for employees, the formation of a management practice
group with top 100 managers meeting monthly, and generally more visible leadership. The
fact that the council has improved its communication with employees is in line with
comments from IIP assessors and the accreditation of IIP in May 2011 (MidTown City
Council, 2012-2016), which emphasises “strong internal communications, through
CouncilMatters, corporate briefings, Wider Leadership team meetings, Management
Practice Group, and one-to-ones (...) an organisational ethos of honesty and openness
which enables people to voice opinion, challenge practices and develop effective methods
(…)” (p. 35-36).
Two important projects, which both involved a threat of externalisation, highlight the fact
that unions as well as the workforce are involved in decision making. In the first case, which
involved leisure services, the unions have been involved in the transfer of management to
Fusion Lifestyle [a not-for-profit cooperative]. The partnership with Fusion achieved annual
savings of £750k, an increase in the number of service users and performance
improvements. In addition, employee engagement has also improved (MidTown City
Council, 2011-2015: 914/4). In the second case, the refuse and recycling service beat off
private competitors with the service still being provided in-house, and there have also been
significant annual savings (MidTown City Council, 2011-2015). ‘City Works’ frontline
employees have been involved and participated in the process in relation to staffing patterns
on refuse trucks, the size of the trucks etc.
Promoting innovative solutions through social dialogue
In April 2011 MidTown City Council has set up a ‘Corporate Innovation and Efficiency board’
which is made up of Union representatives, senior officers as well as so-called “innovation
champions”. It meets monthly to discuss novel proposals and suggestions for increasing
efficiency and performance, and thereby strengthens social dialogue. It has an annual
budget of £50k to invest in new projects that shall eventually contribute towards further
future efficiencies. So far 60 innovative ideas have been considered.
Comparison of the two municipalities
Table 3: Comparison of two local government authorities
Coastal City Council
Background (Type of
Unitary Council; South-England;
Council; Location;
Conservative: 2008- 2012, Labour:
Political Control)
since 3 May 2012
Population
236,900 (2011 Census)
Workforce Size
(Headcount)*
Social Dialogue
MidTown City Council
District Council; South-England;
2004-2010: no overall control
Labour 2010 - present
151,900 (2011 Census)
6,550 (4,940 FTE) as of 2012 Q2
1,206 (1,140 FTE) as of 2012 Q2
Limited
Extensive
20
Union exclusion
High
Low
Employment Reduction
Many
Few
Pay Reductions
Yes, unilaterally imposed
Yes, by agreement
Changes to terms &
conditions
Industrial action
Yes, unilaterally imposed
Yes, by agreement
Yes
No
* For more information see appendix 3.2
Coastal and MidTown councils differ despite both being titled ‘city councils’ because
MidTown is a district council whilst Coastal is a unitary authority. MidTown as a district
council, does not provide services such as education or social services which are financially
challenging services to manage. Coastal is a much larger employer because it provides
services such as social services that MidTown does not provide, but Coastal is not considered
a large unitary in comparison to large cities such as Birmingham, Manchester and Newcastle
with employment in excess of 13,000 ( table below).
Authority Name
Manchester
Birmingham
Type
Met District
Met District
Newcastle upon
Tyne
MidTown
Coastal
Met District
Shire District
English
Unitary
Region
North West
West
Midlands
North East
Headcount
19,574
50,310
FTE
14,556
37,212
13,214
10,737
South East
South East
1,206
6,550
1,140
4,940
There are important variations between single tier and county councils versus district
councils in terms of changes in funding (Audit Commission, 2011a). Despite these
differences, there are some similarities, for example, both councils are in the south of
England, which means that in terms of union density, they are likely to have a more similar
profile compared to local authorities in the North of England.
21
Table 4:
Change in central government funding 2010/11 – 2011/12
in %
County Councils
- 8.1
Unitary Authorities
-12.3
London Borough Councils
-12.2
Metropolitan District Councils -13.4
Single Tier & County Councils -11.6
District Councils
-15.7
All Councils
-11.8
Source: Audit Commission (2011a)
One possible explanation for the apparent variations in the use of dialogue might be argued
to be the political control of the authorities, although this should not be overstated given
the severity of cuts required. However, as these two cases show, MidTown Council has been
Labour-controlled in recent years and has engaged with the workforce and endorsed a living
wage. In contrast, unions argue that no real dialogue has taken place at the Conservative
Coastal council, therefore no agreements has been reached, decisions were made
unilaterally and worse terms and conditions imposed which has led unions to take sustained
industrial action. On the other hand, in Coastal despite a change of political leadership,
doubts exist about the promises made.
Another important aspect appears to be the extent to which social dialogue has been
pursued by the social partners prior to the crisis i.e. prior to 2010’s Emergency Budget.
Again, at MidTown council there have been various examples of negotiations taking place
around since 2007/2008 with clear outcomes such as the MidTown Living Wage, which has
contributed towards improved relations and to a greater embedding of social dialogue than
at Coastal. At MidTown, efficiencies were also already sought through the ‘transformation
programme’ and thereby a platform for further efficiencies established. It might be argued
that due to this MidTown was in a better financial position.
Another important element seems to be the extent to which unions are prepared to make
pragmatic decisions and participate in concession bargaining. In various interviews
conducted it became clear that unions generally are not willing to discuss any deals which
involve conditions of part 2 of the local government collective agreement. Conversely, in the
case of MidTown, these changes have also been affected. Hence, trade unions accepted a
trade-off to mitigate even worse outcomes.
The distinctive issue in the UK though is the legal framework. Change can be legally imposed,
for example through mass dismissal and re-engagement of employees using section 188, as
long as it is reasonably necessary to achieve a legitimate aim which in this context is the
economic difficulty and aim to reduce (national) deficit. As such, agreements, even if
concluded are not legally binding (Ewing, 2011). At the same time, legal difficulties with
regards to industrial action are so great, that it can be difficult for unions to mobilise.
22
4. Conclusion
Public services have been subject to a continuous process of reform for more than three
decades. Nonetheless, the advent of an era of austerity is forcing changes in employment
relations that draw on earlier phases of Conservative reform but which are now being
pursued with more vigour by the current government. The Autumn 2010 spending review
outlined the scale of the fiscal challenge and highlighted a 19 per cent cut in departmental
budgets over four years, excluding health and overseas aid (Treasury, 2010).
What is unique about the current approach adopted in the UK is the speed and depth of the
austerity measures – which involves exceptionally large spending cuts. If delivered the
government’s plan amounts to the tightest sustained period for public services spending
since 1945. Over the period April 2010 – March 2017 there would be a cumulative real-terms
cut of 16.2 per cent, almost twice the magnitude of the 8.7 per cent cut achieved between
1975-1982. Furthermore, in terms of speed, the coalition government seeks to reverse
public debt in four years, while the OECD recommended a period of 14 years (Taylor-Gooby,
2011).
This context provides challenges for government, employers and trade unions. For
government, the public services have always been cast in the role as a model employer both
in procedural terms, for example in relation to employee voice and equality provisions and
also in substantive terms especially in terms of pension provision and employment security.
These features of public service employment are being questioned by the coalition
government that is using the economic crisis to shrink the state, reduce pay and conditions
in the sector, erode national systems of pay determination and to marginalise the role of
collective employee voice. These reforms are legitimised by emphasising the need for fiscal
rebalancing, suggesting that under the Labour government public sector employment and
wages became bloated, and arguing that public sector employment should be reformed
further to mimic pay and conditions that prevail in the private sector. Undoubtedly the
public sector workforce will continue to constrict over the next few years and there will be
downward pressure on pay and conditions, but there are considerable uncertainties
associated with this agenda. Not only are staff shortages certain to re-emerge in key
services, but the public sector as an employer will become less attractive making it harder to
attract talent into the sector. There are real dangers if the public sector abandons its
aspiration to be a model employer and as our case studies illustrate not all employers are
seeking to go down this route. In addition, the economic and political risks of austerity are
considerable and not only have governments in many countries already been punished for
pursuing austerity, in high profile public services, especially the NHS, in the past the
electorate has shown itself to be unforgiving towards parties that preside over increased
waiting times and reduced service standards. As Pierson (1994) has pointed out welfare
state retrenchment is a difficult and politically risky enterprise.
Finally public service trade unions are in a difficult and unenviable position. They confront a
government that is at best indifferent to their concerns and at worst actively hostile to their
agenda. For many years, public service trade unions weakness has been disguised by the
precipitate fall in density and membership in the private sector but is becoming increasingly
evident. Union membership, and almost certainly density, will fall sharply over the next few
23
years as the public sector workforce contracts. Public service trade unions face a series of
difficult choices, they will be forced into unpalatable rounds of concession bargaining that
may reduce their legitimacy in the eyes of their members and potential members, but the
alternative is not to engage with employers, attempt to mobilise a membership that has
little appetite for industrial action, and risk marginalisation and the continuing erosion of
national frameworks of pay determination where their institutional strength resides. Despite
many uncertainties, it seems certain that an era of austerity will leave an indelible mark on
public service employment relations.
Marchington and Kynighou (2012) point out that in liberal market economies (LMEs), such as
the UK, employers generally have more ‘regulatory space’ to shape employee involvement.
In a review of the impact of the global financial crisis in the private sector, they assess
competing propositions about the consequences of the GFC for workforce involvement. One
possibility, consistent with Ramsay’s cycle of control theory, is that tough times have
reinforced employer authority and weakened labour. The proposition is that the removal of
viable sanctions by organised labour provides scope to impose changes in terms and
conditions with minimal consultation. By contrast, a focus on product and labour market
pressures at organisational level leads to different conclusions. Marchington et al. (2012)
suggest that employers may seek to engage with employees, communicating the challenges
they face and seeking to involve the workforce in weathering economic recession. They
argue that employers are aiming to strengthen workforce involvement and recalibrate
workforce expectations, facilitating the management of change without recourse to
industrial action. However, they are unsure about the prospects for the public sector noting
that these strategies ‘might be more difficult in some situations than others, for example, in
the UK public sector at present, but even in this situation there are differences in how
employers have responded to the cuts and in how they seek to engage their staff
(Marchington et al., 2012: 3350-1). Employer variation has certainly characterised the
response of our case study organisations.
Summary
Firstly, the Coalition, with its focus on fiscal consolidation, has implemented austerity
measures which evidently already have had significant implications in quantitative terms.
Especially in local government and the civil service changes in job levels have been
considerable, with employment levels having fallen by 11.7% in local government, 12.1% in
the civil service between 2010 and 2012 (second quarter). The figure for central
government, including the NHS is less drastic (-8.3%). Terms and conditions have also been
affected. Predominantly, employers have focused on those terms and conditions which are
more flexible/ easy to change locally such as premium pay and car allowances. However,
employers also target other terms and conditions, such as sick pay, which trade unions have
been traditionally very resistant to negotiate on as this threatens to undermine national
collective bargaining. Interestingly, while there have been no wage cuts as is the case in
many other EU countries affected by austerity, a two-year pay freeze across the public
sector, followed by a two-year 1% cap as well as changes to the pension system have been
implemented
In terms of changes with regards to patterns of work organisation it is important to consider
the impact of long-term reform in the UK which has been characterised by an emphasis on
24
marketisation, managerialism and measurement. Also, outsourcing has been a prominent
feature in the UK public services, although a trend towards in-sourcing can recently also be
identified (APSE, 2009; APSE, 2011) particularly in local government. Nevertheless,
qualitatively the Coalition pursues familiar Conservative party themes which includes the
promotion of a larger role for private sector service delivery, with an enhanced role for
voluntary organisations and ‘mutuals’, which is also in line with the previous Labour
government policy that emphasised the importance of more diverse service provision and
outsourcing (Bach, 2012).
Secondly, when contemplating on how changes have been implemented and to what extent
social dialogue has contributed to change processes at national and sectoral level, it is
important to consider what the benchmark for evaluation is. When taking the strength of
collective bargaining/ industrial relations in the UK (public sector) as a starting point then it
becomes clear that there is a weak tradition of social dialogue, although ‘partnership
working’ has been a bit more prominent under Labour. Thus, at the national level there has
been very limited/ no dialogue with employers or trade unions on the formation of
government plans, such as prior to the announcement of the wage freeze.
Whilst there has been very limited consultation with the social partners over the austerity
measures adopted, there has been consultation and negotiation at sectoral level. In fact,
sectoral level social dialogue has been more important in reaching agreement on issues such
as pension reform and pay.
Furthermore, an important finding from this research is that, at a local level, employers have
placed more emphasis on direct communication and involvement of their workforce. There
are examples of cases where discussions have led to concessions and trade-offs between the
relevant parties albeit employers’ greater willingness to impose changes in terms of
conditions than in the past.
Thirdly, as mentioned above, although the coalition government has had much less
engagement with public sector trade unions at national level than its predecessor, it has
maintained formal institutional linkages between the trade unions and government.
However, although most of the institutional architecture of social dialogue remains in place,
as collective bargaining has been effectively suspended, trade unions express strong
frustration at their inability to influence a government that is viewed as intransigent and
unreceptive to union arguments. For trade unions, social partnership is a term that has been
discarded in an era of austerity.
At national level liaison meetings between the TUC, public service trade unions, employers
and the government have continued but these meetings are sounding boards rather than
decision making forums. In contrast to the previous Labour government informal channels
direct to senior government ministers are also closed off to the trade unions. This has
encouraged trade unions to mobilise and ballot members for industrial action and to seek
other avenues to challenge government policy, especially in relation to pension reform.
Nonetheless in some sectors, especially health, with strong traditions of joint working the
Social Partnership Forum has continued to work co-operatively on issues such as the HR
25
effects of NHS re-organisation. In the civil service the National Trade Union Committee
(formerly Council of Civil Service Trade Unions) offers a platform for discussion around policy
issues between the relevant social partners. Since the shift to delegated bargaining,
however, much of the focus is on negotiation and consultation at individual department and
agency level.
Given that local authorities, as independent employers, have the greatest autonomy within
the public sector with considerable local flexibility/discretion i.e. over many aspects of work
organisation (including the size and composition of the workforce and systems of employee
involvement) and given the fact that national pay bargaining in the NJC has been effectively
suspended for several years in the wake of the wage freeze, there is local variation with
regards to practices of social dialogue.
Local authorities have the greatest employer autonomy and independence within the public
sector and - although covered by national pay bargaining which takes place in the NJC which
has been effectively suspended for several years in the wake of the wage freeze - have
considerable local flexibility/discretion i.e. over many aspects of work organisation, including
the size and composition of the workforce and systems of employee involvement. Therefore,
there is local variation with regards to practices of social dialogue although government has
encouraged employers to change substantive terms and conditions (e.g. sick pay/annual
leave provisions) and procedural agreements (e.g. trade union facilities time) which
represents a threat to union capacity and influence and thereby also to common industrial
relation processes. Employers have certainly viewed austerity as an opportunity to make
changes in pay, conditions and ways of working that would not have been possible in less
straightened times. There is much talk of service transformation. The employers’
organisation the CBI has also emphasised the importance of maintaining employee
engagement in uncertain times (CBI 2011) and many employers indeed the need to
communicate and engage with staff concerns about changes in pay and working conditions
at workplace level.
In sum, pressures arising from public expenditure cuts have limited the scope for workforce
engagement and dialogue with public sector trade unions and created a difficult industrial
relations climate. Some aspects of government policy are viewed as especially detrimental
to effective employment relations and indicate a disdain for union involvement. However,
there are important sectoral differences and in local government, there are further
significant variations with regards to employers’ (and social partners’) responses to
austerity. The report offers evidence for the claim that social dialogue in the form of some
union involvement and the direct involvement of the workforce can contribute towards
concessions being made within a more positive employment relation context than if changes
are being imposed.
26
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31
Appendices
Appendix 1 :
Major service
Examples of what is delivered
Education
Maintained Schools – nursery, primary, secondary and special and services for them such as
school meals, education welfare and support for those with special educational needs.
Youth, adult, family and community education 17
Highways – construction and maintenance of non-trunk roads and bridges Street lighting
Traffic management and road safety; new line parking services Public transport –
concessionary fares, support to operators, co-ordination Airports, harbours and toll facilities
Children's and families’ services – support; welfare; fostering; adoption Youth justice –
secure accommodation; youth offender teams Services for older people – nursing, home,
residential and day care; meals Services for people with a physical disability, sensory
impairment, learning disabilities or mental health needs Asylum seekers Supported
employment
Council housing (Housing Revenue Account) Housing strategy and advice; housing renewal
Housing benefits; welfare services Homelessness
Culture and heritage – archives, museums and galleries; public entertainment Recreation
and sport – sports development; indoor and outdoor sports and recreation facilities Open
spaces – national and community parks; countryside; allotments Tourism – marketing and
development; visitor information Libraries and information services
Cemetery, cremation and mortuary services Community safety, consumer protection, coast
protection, trading standards Environmental health – food safety; pollution & pest control;
housing standards; public conveniences; licensing Agricultural and fisheries services Waste
collection and disposal; street cleansing
Building and development control Planning policy – including conservation and listed
buildings Environmental initiatives Economic and community development
Community Safety Services. Fire and rescue services Court services – coroners etc
Highways,
Roads and
Transport
Social Care for
Children and
Adults
Housing
Cultural
services
Environmental
services
Planning and
development
Protective
services
Central and
other services
Local tax collection Registration of births, deaths and marriages Elections – including
registration of electors Emergency planning Local land charges Democratic representation
Corporate management
Source: Communities and Local Government, National Statistics (2012). ‘Local Government Financial Statistics England
No.22 2012’, Presented to Parliament pursuant to Section 168(4) of the Local Government Act, 1972 Elizabeth II, c70
32
Appendix 2: Local Government Employment
Employment by headcount, FTE, gender and employment status – England & Wales
Type
2010 Q2
Head-count
2,245,200
FTE
1,573,700
Male FT
411,300
Female FT
644,800
Male PT
145,700
Female PT
1,043,400
Permanent
1,916,500
Temporary/ Casual
328,700
2011 Q2
2012 Q2
% change 20102012
2,127,800
1,957,900
≈-12.8
1,483,100
1,366,500
≈-13.12
375,800
340,900
≈-17.1
593,000
543,500
≈-15.7
141,400
128,300
≈-11.9
1,017,400
945,200
≈-9.4
1,819,200
1,680,400
≈-12.3
308,600
277,500
≈-15.6
33
Employment by Type of authority &
Region
Type
English Unitary
London Borough
Met District
Shire County
Shire District
Welsh Unitary
Region
East Midlands
East of England
London
North East
North West
South East
South West
Wales
West Midlands
Yorkshire and the Humber
2010 Q2
Headcount
506,600
243,600
522,600
698,200
110,300
163,800
Headcount
197,800
219,000
243,600
126,400
302,700
297,800
205,300
163,800
244,500
244,200
2011 Q2
FTE
343,500
185,600
385,100
454,100
87,800
117,700
FTE
125,200
145,600
185,600
92,900
222,500
208,200
133,100
117,700
175,900
167,000
Headcount
471,100
233,800
493,000
669,100
103,300
157,500
Headcount
187,600
204,800
233,800
118,600
281,500
288,200
189,500
157,500
232,800
233,400
2012 Q2
FTE
318,500
178,000
360,300
430,400
82,300
113,700
FTE
117,400
137,700
178,000
87,800
204,300
198,700
120,000
113,700
167,800
157,700
Headcount
425,500
218,100
454,800
604,300
98,300
156,900
Headcount
171,700
183,400
218,100
104,900
266,700
264,100
162,000
156,900
211,700
218,500
FTE
291,300
167,200
331,700
385,700
78,300
112,400
FTE
107,500
121,400
167,200
78,300
192,400
184,700
103,500
112,400
151,500
147,600
Source: ONS Quarterly Public Sector Employment Survey. Available at: http://www.local.gov.uk/web/guest/local-government-intelligence/-/journal_content/56/10171/2991184/ARTICLETEMPLATE
34
Appendix 3:
List of Interviewees (in chronological order)
Research and Information Officer RCN
Senior advisor, Workforce Policy Local Government Association (LGA)
& Strategy Team
Principal Negotiating Officer
Local Government Association (LGA)
Research Officer
PCS
Senior national officer in the local Unison
government service
National officer in the local
Unison
government team
Head of Organisation & Services
TUC
Department
Senior Policy Officer
TUC
(Former) Performance Manager
Islington Council
Head of Research and Specialist
Prospect
Services
Pay researcher
Prospect
Deputy Director of Workforce
NHS, Oxford University Hospitals
Assistant Director of Workforce
NHS, Oxford University Hospitals
Executive Head of Human
Sutton and Merton Council – HR
Resources
Shared Service
Employee Relations Advisor
CIPD
Director of Employment
NHS Employers
Relations and Reward
National Officer (Health)
Unite
HR Assistant Director (TriLondon Borough of Hammersmith &
borough services)
Fulham
Director of HR
Highways Agency
National officer (Local Gov)
Unite
30/04/2012
16/05/2012
16/05/2012
16/05/2012
18/05/2012
18/05/2012
22/05/2012
22/05/2012
22/05/2012
30/05/2012
30/05/2012
31/05/2012
31/05/2012
07/06/2012
07/06/2012
13/06/2012
19/06/2012
19/06/2012
09/07/2012
20/07/2012
Case Study Interviews:
MidTown City Council
Chief Executive
Leader
Unison Branch Secretary
Head of Business Improvement and Technology
Executive Director (Community Services)
Head of HR and Facilities
Head of Policy, Culture and Communications
Strategic Policy and Partnership Manager
City Works – Acting Business Manager
Head of Direct Services
Unite rep
Refuse crew and union member
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12/06/2012;
02/11/2012
12/06/2012
03/12/2012
03/12/2012
03/12/2012
02/11/2012;
03/12/2012
02/11/2012;
03/12/2012
03/12/2012
04/12/2012
04/12/2012
04/12/2012
04/12/2012
Coastal City Council
Unite Convenor
CM for Resources
Branch secretary
Coastal Conservative Party Leader
17/10/2012
27/11/2012
27/11/2012
27/11/2012
Appendix 3.2
Auth
Type
Name
Region
Headcount
FTE
Male,
FT
Female
FT
Male
PT
Female
PT
MidTown
Shire
District
South
East
1,206
1,140
755
281
38
132
Coastal
English
South
Unitary East
Permanent
6,550
4,940
1,450
1,780
310
3,010
Temporary/Casual
Male
Female
1,173
6,425
33
125
793
1,760
413
4,790
Fulltime
1,036
3,230
MidTown
Coastal
Source: ONS Quarterly Public Sector Employment Survey. Available at: http://www.local.gov.uk/web/guest/localgovernment-intelligence/-/journal_content/56/10171/2991184/ARTICLE-TEMPLATE
36
Parttime
170
3,320
Appendix 4:
UK National Workshop, 28th June 2012
Attendees:
Stephen Bach (King’s College); Michael Begner (King’s College); Jorge Cabrita (Eurofound);
Naheed Chaudry (Merton Council); Charlotte Domanski (Localis); Matt Dykes (TUC); John
Edmonds (King’s College); Mike Emmott (CIPD); Jonathan Green (Prospect); Androulla Harris
(Localis); Ian Kessler (Oxford University); John Medhurst (PCS); Richard Pond (EPSU);
Alexandra Stroleny (King’s College); Geoff White (University of Greenwich)
1. Presentation by Professor Stephen Bach (King’s College) : ‘Managing workforce change:
Strengthening public services social dialogue in an era of austerity’
The presentation by Professor Bach explained the project and discussed early findings from
the fieldwork, including the European experience in responding to austerity. This allowed
participants to reflect on their own experience of how workforce change is being managed in
tough times. The presentation also considered the future direction of the project, including
case study selection, in response to the views of workshop participants.
2. Discussion facilitated by Ian Kessler (Saïd Business School, University of Oxford)
The formal discussion, facilitated by Ian Kessler, evolved around the following main
questions:
 What form does employee engagement take in your sector/ organisation?
 Have forms of engagement changed in recent years and if so why?
 How has such engagement contributed (or not) to managing change in tough times?
 How might employee engagement be strengthened and what barriers need to be
overcome to achieve this?
One of the first points that made was that in the UK austerity is still in its early days.
Austerity itself has been linked to the government’s ideology; particularly the Conservative’s
vision has been identified as the dominant one. Moreover, austerity has been described as a
‘self-inflicted wound’, as it is not believed that the severity of cuts is necessary. However,
there has been some realisation that unions need to do more as mainstream organisations
have not done enough yet in terms of an alternative. PCS, for example, has started to
develop and publicise and ‘alternative vision’. Building a counter-narrative in terms of
dealing with austerity has been highlighted as a very important response. Overall, there
seems to be a difference between rhetoric and reality when it comes to negotiation and
social dialogue.
Two important issues were raised. With regards to trade union density is has been stated
that while absolute membership is falling, density has actually increased in recent months
(TUC). The importance of the definition of employee engagement has been highlighted by
several participants and it has been argued that engagement for example as in local
government is rather to be seen in relation to a two-way communication process where
leadership plays an important role as well as the communication of believable messages and
transparency. On another point, it has been mentioned that transparency in the sense of the
statutory requirement for authorities to publish their salaries is likely to have a negative
effect on workforce relationships due to unfair pay perceptions given the significant cuts.
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Nonetheless, the nature of engagement in its original sense is largely judged as not being
evident. Also, it has been suggested that a distinction needs to be made between
partnership and engagement. While partnership is understood to imply co-decision-making
and consultation, engagement is more of an unitarist approach where unions do not play an
important role as the emphasis is on individual level communication.
The fact that individual loyalty takes prominence over the more collectivist model can be
illustrated by the role of joint negotiation committees. Furthermore, for example in schools
in can be seen that there is a shift from institutions of national bargaining to localism. The
Localism Act, and further external challenges and pressures all have been said to impact on
local authorities for example.
An important consideration that has been raised in relation to local government has been
that for example in London, every borough is different in their responses and approaches
largely due to the leadership style of the chief executive. While there have been attempts to
remove terms and conditions, trade unions are active. In the case of Merton council for
example, an individual, personal approach is being used by being visible, using tools such as
road-shows and blogs.
While elements of institutional continuity have certainly been identified, it has also been
acknowledged that while some institutions have remained, some have been abolished. For
example, while strategic health authorities are being abolished, the Pay Review Body or in
health the SPF are important forums for social dialogue. It has been suggested that the SPF is
an important tool for information exchange and contributes to bilateral relationships. In the
case of PRB it seems that, although their independence is often queried, these are unlikely
to be challenged as also the Conservatives see a benefit in them.
Nevertheless, with regards to institutions for dialogue it has been noted that for example in
the civil service the actual structures, i.e. bodies and forums for discussions such as the
Whitley’s are longstanding and still in place. However, the level at which consultation is
taking place is local and specific whereas nationally there is no meaningful negotiation or
consultation although the bodies exist. In civil service for example the so-called protocols
have been retained and discussions in relation to the process of downsizing does take place
but not in relation to the policy itself. And while austerity has been rolled out in different
ways, the policies are being imposed from the top. Therefore, for example trade unions in
the civil service also more often take legal challenges now in response to this.
3. Presentation by Professor Geoff White (University of Greenwich) : ‘Current
developments in public sector pay reform’
Professor Geoff White provided a background to public sector pay policy and practice before
2008 as well as policy since 2008. Furthermore, differences in pay practices and composition
between public and private sectors were discussed.
4. Conclusion & next steps
Finally, some of the main issues have been addressed again, such as the need for the
development of alternatives and the issue of the Coalition government. It has been agreed
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by the UK team that it will send the participants the national report once completed and will
remain in contact regarding further events and collaborations.
39