Another working week draws to an end. For many in local government, though, it is a week they will long remember; one in which they were told that they will be made redundant in the near future.
Liverpool City Council’s decision to axe 1,500 jobs over the next two years was prompted by a 22% reduction in government funding – £91m from a budget of £400m – and while it garnered many headlines, theirs is far from an isolated case.
According to the GMB union, which has been closely tracking the total number of job losses announced or threatened by local authorities, 200,000 jobs are to be cut in England this year. And, at local level, police forces such as Greater Manchester Police have announced over 700 job reductions in the next three years.
One thing’s for sure, in light of the toughest spending package in a generation, it is incumbent on all those working in local government to work together to protect essential services, and keep job losses to a minimum. So with this in mind, are the finance and HR functions working together to build sustainable, smaller councils? Or is there tension in the relationship?
Austerity presents potential tension in the relationship as finance wants to see cost-cutting kicking in as soon as possible if councils are to remain within their much-reduced budgets, many of which have front-loaded the savings. These tensions include:
Arguing over workforce data. Never a good start. Crazy though it may seem, it is only a minority of organisations that can claim to have a single version of the truth on numbers. Often, the numbers relating to staff numbers on finance systems differ markedly from those that exist on the same organisation's HR matrix and never the two do meet. Organisations cutting numbers urgently need to translate reduced budget into headcount numbers, as well as be on top of vacancy rates, attrition and skills mix.
Timing of redundancies. There can be extensive haggling over how quickly redundancies can happen. Finance needs to take the time to understand the legal requirements around 30-day or 90-day consultation, what is possible by way of restructuring during consultation and the transactional role they need to play in budget profiles, providing estimates and actioning payroll. HR needs to ensure it is not adding in extra time-delaying processes on top of their legal obligations and work proactively with trade unions to facilitate the process.
Concentrating on staff engagement. This can take a big hit during large-scale redundancies. New research from the Roffey Park Institute has confirmed that how an organisation handles redundancies has a greater effect on employee engagement than the job losses themselves. The public sector fared worse in the survey with only 34% of managers reporting a well-managed redundancy process. While there is pressure to take cost quickly out of organisations, you must build in time to inform and consult staff effectively.
Board-level behaviours. In stressful times, finance and HR directors need to work together. It is amazing how quickly staff pick up on tensions in the boardroom, see this rightly as a lack of leadership and adopt entrenched positions within their own functions. Be it central or local government, we are entering into unchartered terrain. Tempers will flare, unions will protest and services will be squeezed. It’s not going to be easy. But finding common ground and working together as much as possible will be more important than ever.
John Marsh is a director at Ernst & Young and a former group human resources director at the Home Office
