03 June 2005
Local Government Association said to want closer control over pay and conditions negotiations
The Local Government Association's shock decision to abolish the Employers' Organisation was motivated by the desire to assume more control over pay and pension settlements in the sector, senior sources claimed this week.
Public Finance has also learnt that the bitter dispute between local government employers and the Fire Brigades Union between 2002 and 2004 was the catalyst for the LGA's decision to bring many of the independent EO's functions closer to political decision-makers in Smith Square.
The LGA announced on May 27 that it was to scrap the organisation, which undertakes pay negotiations and workforce reform projects on behalf of councils, from April 2006 as part of its efficiency drive.
But one insider told PF that senior EO staff believed they had been made 'scapegoats' after the LGA published a critical report on the fire dispute in March.
That dispute ended in acrimony after the LGA 'pulled rank' on employers' representatives and sacked Christina Jebb as chair of the National Joint Council, because she had urged the EO to settle with firefighters – straying from the LGA's line.
'What is clear from past discussions is that the LGA has a long-held desire to bring pay negotiations closer to political decision-makers, and these reforms will do just that,' PF's source said.
The EO's responsibility for workforce modernisation will be handed to the Improvement and Development Agency, while a new arm's-length organisation, Local Government Employers, will be set up to deal with pay, pension and policy issues.
The announcement has dismayed officials at the EO. Formally, the organisation's functions will be the subject of a review conducted by the LGA and the IDA this summer. But a letter sent to EO employees by LGA chief executive Sir Brian Briscoe on May 27 makes it clear that the EO will be abolished next year.
'The objective of the review…is to bring policy issues relating to pay and conditions negotiations closer to the LGA (and renamed Local Government Employers) and to integrate the other EO functions around workforce and other improvement work into the IDA,' Briscoe writes.
It is unclear what will happen to the EO's staff, but one high-profile casualty will be executive director Rob Pinkham. Briscoe writes that 'a direct consequence…is that the post of executive director [at the] EO will no longer exist and Rob Pinkham will leave the EO at the end of June'.
John Ransford, currently policy director at the LGA, will assume Pinkham's responsibilities on an interim basis.
But there is widespread scepticism that the decision to abolish the organisation was based on efficiencies. Both the EO and LGA were severely criticised for their handling of the fire dispute. But the association's leaders deny that the handling of past negotiations had influenced their decision.
Explaining the switch, Sir Sandy Bruce-Lockhart, LGA chair, said: 'Already, much has been done to drive Gershon-like efficiencies in the support services, for example with the merging of finance and HR functions… We are now shifting the emphasis to changes to enhance our combined effectiveness.'
As part of the overhaul, the LGA has also redefined its senior posts. Sarah Wood, currently director of economic and environmental policy, will become director of policy, to bring together management of all policy development staff.
Meanwhile, Ransford will become deputy chief executive to 'enhance the LGA's corporate capacity' and to allow him to manage major modernisation projects, such as the contentious fire service reform programme.
One key issue that must be resolved is how the new LGE will be funded. The EO currently receives top-sliced grant from the government because it is independent and, in order to retain that, it is thought that the new negotiating body must remain formally independent of the LGA.
Wood said: 'That's a crucial consideration. We do not want to jeopardise the current funding arrangement and we want to retain the independence of the negotiating team.'
PFjun2005
