Public sector workforce reform: CSR 2010What we know |
The Government expects 490,000 public sector job cuts over a four year period. Managing a large redundancy programme is complex and requires skills and resources that are in short supply across public bodies.
Fewer than 100 Civil Service compulsory redundancies occurred between 2005 and 2008 (PDF, page 50) (or 25 people per annum from a work force of over 525,000). On that basis, many Civil Service and public sector managers have no experience of managing redundancy at scale.
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Deloitte view |
The turmoil across public sector labour markets attracts a number of risks around staff behaviour. Like any organisation, public workforces include individuals who are productive and add significant value, as well as others who struggle to make an impact or who are unwilling to accept change.
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Deloitte view |
A key barrier to workforce reform has been the way terms and conditions are defined for public sector employees. Four fifths of public workers have their pay set by national pay bargaining agreements, not on individual performance.
This has two implications. First, since 2002 the public sector wage bill has increased three times faster than the private sector, growing by 33 per cent in real terms, or £67 billion. Secondly, public sector productivity has fallen by 3.4 per cent between 1997 and 2007 in comparison with 28 per cent increase in the private sector over the same period.
Through the Public Sector Pay Review and the Cabinet Office, the Government is occupied with closing the pay gap between the highest and lowest paid public workers and reducing the average redundancy package (currently around £10,500).
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Deloitte view |
