AGENDA ITEM NO 10
BOROUGH OF POOLE
CABINET
12 JULY 2011
Efficiency Review Programme
Costs OF EMPLOYMENT in the Medium Term Financial Plan
NEXT STEPS
PART OF THE PUBLISHED FORWARD PLAN - YES
STATUS - STRATEGIC
1 PURPOSE
1.1 To report progress with the consultation on proposals authorised by the Cabinet in March 2011 and to seek the delegation of authority for the completion of a Collective Agreement with the Council’s recognised Trades Unions.
2 DECISIONS REQUIRED
2.1 To note the progress of consultations with Trades Unions on proposals to revise employee conditions of service.
2.2To recommend to Council that authority is delegated to the Chief Executive, in consultation with the Leader of the Council and Portfolio Holder, to finalise the details of a CollectiveAgreement with the Trades Unions.
3EXECUTIVE SUMMARY
3.1Following the Cabinet’s approval on 16thMarch of proposals to reduce the costs of employment by approximately £1.5M across 2012/13 and 2013/14, consultations with Trades Unions have commenced and are being carried out in a constructive manner. Good progress is being made. However, the consultations have not been completed
3.2It is important that further progress is made during July and August so that all the work necessary for a Collective Agreement can be completed by 30th September 2011.
3.3The Cabinet is asked to support the delegation of authority to enable thecompletion of the consultationsand of a Collective Agreement with Trades Unions by 30th September 2011.
3.4In the event that agreement cannot be reached on the proposals, alternative ways of implementing a package of proposals will be considered and reported to the Cabinet.
4BACKGROUND
4.1 On 1 March 2011 the Council approved the Medium Term Financial Plan (MTFP). This was drawn up in the face of unprecedented challenges in relation to budget and service pressures.
4.2The Borough started the 2011/12 financial year with £14.5m less in its budget than in 2010/11. In order to achieve a balanced budget the Council had to make many difficult decisions affecting service levels and the number of staff employed. This included changing policy on eligibility for social care and above inflation increases in most charges. As one consequence, the Council declared what amounted to 162 (full time equivalent) posts redundant.
4.3Forecast resource pressures as at 1st March amount cumulatively to £13M+ across 2012/13 and 2013/14. As a result of this, reductions in overall staffing and service levels are likely to continue over the next two years. Consequently it is considered essential to examine all aspects of expenditure to deliver savings that help balance the budget, support services and deliver the best value for money for tax payers.
4.4The MTFP includes a range of measures to improve efficiency. There are ten Efficiency Review Programmes (ERPs) covering a range of areas and the initiative is making good progress and delivering savings.
4.5Given that the cost of staffing is the Council’s largest expenditure budget one of the ERPs is on the Costs of Employment.
4.6At its meeting on 16th March 2011 the Cabinet approved in principle 14 proposals to reduce the costs of employment and, in doing so, to save at least £1.5Mfrom the Council’s budget in 2012/13 and beyond. It is intended that this will reduce, though it cannot prevent, the extent of service and staffing reductions that would otherwise be necessary to balance the Council’s budget.
4.7The Cabinet also agreed to delegate authority to the Chief Executive, in consultation with the Leader and Portfolio Holder,to consult on the proposals with recognised Trades Unions.
4.8This report presents information on the progress of consultations with the Trades Unions who are recognised by the Council for these purposes.
5PROGRESS REPORT ON CONSULTATIONS
5.1 All staff (including those in schools) were made aware of the proposalsagreed by the Cabinet through communications on 10 March 2011.
5.2Subsequently a series of Factsheets were promoted to staff providing more detailed information on all of the Cabinet’s 14 proposals. Staff have been encouraged to comment on the proposals through the Changing Times portal on the LOOP.
5.3In March the Council commenced consultations with schools that employ Borough staff about whether or not they would wish to take part in the review and, in doing so, consider making similar changes to the conditions of employment for the Borough staff they employ.
(It is recognised that any savings achieved through such a process would benefit the schools’ budgets and would not contribute to the savings the Council has to achieve.)
5.4The outcome of this consultation is that schools do not wish to participate in this review and will not be included henceforth.The trade unions also made clear their wish for schools to be excluded from the scope of this review. A small number of the proposals would have future implications for HR policies adopted by Governing Bodies in schools.
5.5A specially convened team of officers (known as the Negotiating Team) was convened to negotiate with the Trades Unions on the proposals agreed by the Cabinet. This is led by a Strategic Director and includes Heads of Service and officers with knowledge and expertise relevant to the proposals.
5.6The recognised Trades Unions (Unison and GMB) have given a detailed and comprehensive response to the Council’s proposals. The Unions have also asked the Council to consider these “counter-proposals”:
- Consideration of a voluntary redundancy trawl
- A review of honoraria payments
- Consideration of contract car hire as part of a travel policy
- Identification of the costs of providing Poole News
- A review of the costs of signing up to IIP
- Share information on the costs of the mayoral car
- A review of the costs of imposing a change in conditions of employment in the event that a Collective Agreement cannot be achieved
5.7The Negotiating Team have developed the Cabinet’s 14 proposals in more detail and responded to the Unions’7 proposals.
5.8It was also agreed that a joint Council and Trade Unions survey of staff views on the proposals would be undertaken. This was carried out in May.The results have been used to inform the consultations.
5.9The Trades Unions requested the Council to withdraw the proposal to consider the sustainability of payment for the first two or three days of sickness absence.The Trades Unions were concerned about moving away from the National Conditions of Service to the extent that they would consider lodging an official dispute if this aspect of the proposals was developed.After careful consideration and as a reflection of the current positive dialogue it was agreed by the Chief Executive to remove this element of the proposals from the negotiations.
6FURTHER COMMUNICATIONS AND IMPLEMENTATION
6.1The scale of what needs to be done cannot be underestimated and represents a significant challenge for the Borough of Poole. The review is dealing with very sensitive and complex issues associated with the terms and conditions of employment of all staff (with the exception of those in schools). Officers remain focused on these issues and the financial context which means this review is essential.
6.2The communication plan which supports this review aims to reassure our staff that the Council is concerned to retain key features of the employment offer that helps maintain the culture in the organisation. In this it is widely recognised that well motivated and skilled staff are essential for the delivery of good quality services. Many employees go well beyond the commitment that is contractually required of them to do a great job for the Council and our community.
6.3Feedback from staff has shown that they value the opportunity to achieve a work-life balance whilst working for the Council. In this context it is important to understand thatthere are no proposals to reduce pay for hours worked, to reduce holiday entitlement, to change pay grades or salary scales or to change the flexitime scheme.
6.4The Council is working towards a Collective Agreement with Trades Unions on the proposed changes to terms and conditions of service. The budgetary situation in the Council is clear and it is hoped that through communication and joint working an agreement can be reached.
6.5If agreement can be achieved with representatives of the Trades Unions it is expected that they will carry out a ballot on the proposals with their members over the summer. The plan is to achieve a formal sign off of the Collective Agreement in detail by the end of September 2011 at the latest.
6.6Alternatives to a Collective Agreement are available, although not preferred. If agreement cannot be reached on a collective basis, alternative choices for implementation will be prepared to achieve the level of savings required.
6.7Reaching formal agreement, or otherwise, with the Trades Unions by the end of September 2011 will allow time for the statutory procedures necessary to implement the changes to be carried out and completed before the start of the 2012/13 financial year.
7FINANCIAL IMPLICATIONS
7.1 The proposals approved in principle by the Cabinet in March will, if agreed with the Trades Unions, contribute savings of approximately £1.5M over 2012/13 and 2013/14.
7.2 In the event that agreement cannot be reached and the commensurate savings cannot be delivered, other action will need to be taken to manage the budget pressures the Council faces.
8LEGAL IMPLICATIONS
8.1As an employer, the Borough of Poole takes seriously it’s responsibilities towards staff including those which impact on employment and pay and conditions in local government.
8.2 In addition the Council will need to ensure that any changes can be lawfully implemented and detailed legal advice will be obtained.
8.3Dealing with such matters through the mechanism of a Collective Agreement is a recognised method of recording the outcome of negotiations. Such agreements are taken as being indicative of the position in regard to general terms and conditions and will set the context of future employee relations where an agreement can be reached. Collective Agreements cannot normally be used to exclude the operation of general statutory provisions, particularly duties relating the equalities and so it will be important to ensure that a robust equality analysis is undertaken before any final terms are agreed (see sect 11 below).
9RISK MANAGEMENT IMPLICATIONS
9.1 There is a risk that the £1.5M savings target will not be met and other ways of restraining employee costs may be necessary including higher levels of redundancies.
9.2There is a risk of failure to make appropriate progress with Trade Unions including the intention to secure a Collective Agreement which may necessitate alternative and less desirable ways of implementing the proposals.
9.3There is a risk that a failure to work with staff effectively on the proposals will have a detrimental effect onthe morale and motivation of staff who, if they are not adequately involved, may be faced with the consequences set out in 9.1
10EQUALITIES IMPLICATIONS
10.1 In developing the proposals approved by the Cabinet in March, an Equality Analysis (new term for Equality Quality Impact Assessment) has been undertaken on the individual and cumulative impact on specific changes to employment and pay and conditions.
10.2The report to the Cabinet in March 2011 acknowledged the importance of these Equality Analyses and learning from the lessons of other Councils.
10.3 The analyses carried out followed the Council’s guide to Equality Quality Impact Assessment. The analyses shows that there is no significant differential impact on any particular group of staff such as part-time women workers, people with disabilities or minority ethnic groups. The details have been shared with the Trades Unions.
Andrew Flockhart
Strategic Director
Contact officer: Carl Wilcox, Head of Human Resources
Background Papers –
Report to the Cabinet on 8 February 2011“Medium Term Financial Plan 2011/12 – 2013/14 (Including budget and Council Tax).”
Report to the Cabinet on 16 March 2011 “Efficiency Review Programme –Costs of Employment in the Medium Term Financial Plan”.
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