Since taking office, the coalition government has placed great emphasis on the importance of the early years. It has pledged to extend free early education places to the 40 per cent most disadvantaged two year-olds by the end of the Parliament, in addition to the universal free offer for all three and four year-olds . For these families, most of whom have not previously used a nursery or childminder, access to 15 hours of free care will not only benefit their child, but could help the parents to return to work, study or volunteer. And despite cutting the amount of help available for childcare through Working Tax Credit in April 2010 (an average loss of over £500 per family), the Government has pledged that childcare support in the new Universal Credit will be extended to around 80,000 additional families. Currently, parents must work more than 16 hours per week to receive childcare support – in future this will be available to all working parents.

But these new entitlements will be worthless if parents don’t know about them in order to take them up. Family Information Services – small teams of trained advice staff based in local authorities – are there to help parents find childcare, as well as access other services for families. But recent Daycare Trust research has found that cuts to Family Information Services could undermine these key policy initiatives through a lack of support for parents to find out about their entitlements, which could mean that the poorest and most vulnerable families lose out. We have found widespread cuts to Family Information Services, a low-profile, but essential, service. In addition, we have warned that local authorities may be failing to meet their duties under the Childcare Act 2006, which obliges them to run a service providing information, advice and assistance about childcare, and to provide brokerage for parents who need extra help finding childcare.

Our recent survey of Family Information Services in England and Wales found:

• 76 per cent of local authorities have recent or planned cuts their budget for family information, 62 per cent have cut staffing and 45 per cent have reduced outreach activity.
• Five English local authorities were not offering childcare brokerage service, despite the obligation to do so in regulations.
• 22 local authorities in England have recently merged their Family Information Services into call centres or plan to do so by April. This figure in an under-estimate as we did not receive survey responses from three local authorities where we know that this has already happened.
• Where a merger into a call centre had recently occurred or was planned just three local authorities out of 22 had retained a second tier Family Information Service to deal with more complex enquiries.
• Only two-thirds of FIS managers believed their service was fully compliant with the Childcare Act 2006.

These worrying findings should provide a wake-up call to policy makers in central and local Government that the success of new policy initiatives relies on parents having high quality information, and support to access their entitlements. Our survey shows that where Family Information Services are properly supported they often provide an excellent service. By investing in high quality childcare information and brokerage now we can not only ensure families can access the services they need, but prevent poverty child poverty in the future.

Now some commentators have said that this is better than the original proposal to remove the cap entirely and that, in any case, almost no hospitals will get anywhere near that as there is not a market for a wholesale increase in private health provision in the current economic climate.

That misses the point however. The government is not trying to meet a market demand, it is trying to create one.

Cash-strapped NHS hospitals will try to help solve their financial difficulties by boosting the private sector. This creates a conflict of interest as it creates an incentive to try to get as many patients as they can to go private. It is also likely that the private patients will be those with “straightforward” procedures” that will be the most profitable, rather than those that are more complex and less profitable. This will certainly mean than there will be less resources available for NHS patients who are on waiting lists for these routine procedures.

In addition, because the cap is a cap on income rather than patients, individual NHS hospitals will gain a financial interest in benefiting from any medical developments and research. At present  there are rules that govern how NHS intellectual property is used to ensure that the whole NHS benefits from new treatments developed in one trust. This common good of both the NHS and the patients will be undermined if hospitals can patent and licence any new procedures or treatments.

Let’s not forget the difference between the NHS and the private sector. The NHS was set up so that access to health care would be based on need rather than ability to pay. The private sector is there to make a profit. Creeping privatisation undermines the whole ethos of the NHS and universal healthcare free for all becomes secondary to making money for a few.

We saw in the Chancellor’s Autumn Statement that the combination of attacks on pay and pensions is imposing massive cuts on the average living standards of public sector workers.

Little wonder then that yesterday’s joint report from the Audit Commission and Local Government Association on the future of workforce pay and employment in local government gives us real cause for concern.

The report tells us that, as councils face 26% cuts in funding between 2011/12 and 2014/15, workforce costs will be increasingly targeted.  This will be achieved in three main ways:

Cutting the pay bill

Councils are already cutting pay bills through a range of measures including pay freezes, increasing part-time working, reducing additional payments, such as over-time and mileage allowances, and cutting the number of agency workers and use of consultants.

It is worth noting that TUC research has found that public sector workers are the most likely to do unpaid overtime, with over one in four (26.3%) regularly putting in more than seven hours of unpaid overtime a week, compared to around one in six workers in the private sector (18.9%).  Cutting overtime pay while expecting depleted numbers of staff to maintain existing services means that the pressure will intensify to work longer hours without pay.

The report also points to councils exploring the potential for greater “local adjustment” within the national pay bargaining agreements.  It recommends that councils should “benchmark pay rates with public, private and voluntary organisations in similar labour markets”.  While it stops short of recommending local pay bargaining, it clearly links local variation with potential labour cost savings thus echoing the government’s direction of travel that we highlighted here recently.

Patrick Butler at the Guardian also rightly points out that the report doesn’t mention those councils, like Shropshire, who are trying to push through pay cuts by threatening to sack staff who refuse to accept enforced changes to their terms and conditions.

Shedding jobs

PricewaterhouseCoopers estimate that local government lost about 145,000 jobs in the last year, accounting for about 5% of full time equivalent posts.  So far, this has largely been achieved through recruitment freezes, early retirements and voluntary redundancies.

Next year will be more brutal.  The report states:

The numbers of compulsory redundancies are likely to increase as councils make further budget cuts following service and departmental reviews.

The report acknowledges that redundancy costs are spiralling.  This is why 43% of councils plan to reduce their local redundancy severance payments.

The increasing use of part-time work is another part of the strategy.  In the two years to April 2010, full-time working dropped by 4.1% while part-time working rose by 4.4%. The report attributes this, to some extent, to:

many people working shorter hours to help their employers cut labour costs and thereby minimise redundancies

Outsourcing

Outsourcing is clearly seen as a means to remove workers from the pay bill.  The report suggests that:

outsourcing helps to explain why the pay bill reduced by 5.6% in real terms between 2008/9 and 2010/11

One county council featured in the report estimates that of its 7,500 full time staff, around 2,000 are included in current outsourcing plans with the potential to outsource a further 2,500, leaving a remaining core staff of just 2,500 by 2014.

In their guide to insourcing, the Association of Public Service Excellence (APSE)   have shown that time and again local authorities have found service delivery to be more flexible, higher quality and better value for money when brought in-house.  None the less, increasing numbers of councils will view outsourcing as a means of cutting wage bills.

What is particularly worrying is where the axe is likely to fall most.  The LGA claim that 90% of councils have reduced senior management costs by employing fewer people or paying them less.

However, the proportion of staff earning over £50k represents just 7.6% of the total pay bill.  Those looking to find big savings through pay cuts are likely to target those who represent the biggest slice of the wage bill.  In 2009/10 most spending on pay was on three groups:

• Non-teaching staff in education, such as teaching assistants (35%)
• Social care staff (22%)
• Management and support services (14%)

No prizes for guessing what kind of workers fill these jobs.  As Heather Wakefield of UNISON comments:

Teaching assistants, youth workers and social care workers are among the groups facing the largest cuts – despite record youth unemployment and an ageing population. Low paid women are the biggest losers, as they make up 75% of council workers and 90% of the occupations worst hit.

Once again low paid women will be bearing the brunt of the cuts.  And, of course, those most reliant on the services being cut.

Of course most of the headlines were grabbed by the Chancellor’s announcement that he would impose two years of 1% pay-caps on public sector workers at the end of the current two year pay freeze (three years if you work in local government). At a stroke this announcement managed to undermine the ongoing negotiations around public sector pensions (which in part are about significant contribution increases in the context of a pay freeze); confirm the government’s intention to cut the living standards of public sector workers by 16.5%; and signal his seeming contempt for collective bargaining and fair negotiations. Having days earlier called on public sector unions to ‘get back around the negotiating table’ over pensions, the Chancellor effectively pulled the table away from them when it came to public sector pay.

Of course whether or not the government can hold to its 1% cap remains to be see. Previous governments of different political persuasions have struggled to maintain medium-term pay/incomes polices, particularly against the backdrop of turbulent economic conditions. Both Edward Heath and Jim Callaghan can testify to that.

But perhaps just as important as the announcement of the 1% cap, was the Chancellor’s call for Public Sector Pay Review Bodies to look at how public sector pay can be made ‘more responsive to local labour markets’.

Briefing the Times (here, sorry it’s behind a pay-wall), ’Whitehall sources’ implied that this was necessary because in some parts of the country the private sector had effectively been squeezed out as a result of its inability to match public sector wages. Of course this is nonsense. As the TUC’s northern regional secretary Kevin Rowan pointed out on the Today programme last week (here, 2hr 10mins) the North East has both the lowest overall wages (£200 a week less than London for full-timers) and the highest unemployment rate (11.6%) of any of the English regions. The private sector in the North East is not being ‘squeezed out’; it’s simply not creating enough jobs. Lowering public sector wages in the region will not improve this situation one iota.

The Chancellor’s announcement – which goes well beyond traditional London weighting-style arrangements – had little to do with ensuring healthy local/regional labour markets , and everything to do with signalling another lap in the race to the bottom on the pay, terms and conditions of public sector workers. It’s part of an ongoing assault on national pay frameworks – given a semblance of  intellectual ballast by the likes of CentreForum and Policy Exchange, and embedded in the government’s approach to public service reform.

Consider the government’s record so far:

October 2010 – the abolition of the nascent School Support Staffs Negotiating Body which would have helped determine pay, terms and conditions for 500,000 (mainly women, mainly part-time) class-room assistants, school administrative staff and support workers

December 2010 – the abolition of the so-called ‘Two-Tier Code’, which helped ensure that when public sector contracts were outsourced new starters had access to broadly comparable terms and conditions as their more established colleagues

December 2010 – Lord Hill, Parliamentary under secretary of state, writes to schools to stress that there is no requirement on schools seeking Academy status to stay within national pay bargaining frameworks, and that he will take this into consideration when assessing their application

I could go on – the Review of the Fair Deal on Pensions, the Health and Social Care bill which threatens a move toward localised pay and conditions, the Open Public Services White Paper with its commitment to open up public services to a broader range of providers and to decentralise ‘decision making’ to the lowest possible levels – the government’s direction of travel is clear. More fragmentation, more localised bargaining (if indeed bargaining takes place at all).

For unions this throws up some very practical problems. Resourcing hundreds, thousands or even tens of thousands of local pay negotiations would be incredibly difficult, particularly in the face of an another ideologically driven assault on facilities and facility time.  But a move to localised bargaining would not only be problematic for unions and their members. It would be bad for public sector employers, bad for taxpayers and bad for the UK economy as a whole.

Here are just five reasons why:

1) Localised bargaining is incredibly inefficient

There are over 3,100 secondary schools in England. Around 1400 of these are Academies. Lets presume that each of these schools takes Lord Hill’s advice, and decides to disregard national pay and conditions and moves instead to setting these itself. It doesn’t need a math’s teacher to deduce that this might actually consume a bit more time and effort than staying within the existing and time-served pay system.

This of course presumes that the average Head Teacher or Chair of governors has the time, inclination and skill to carry out the negotiations themselves. Many won’t. Instead they will rely on external consultants and HR advisors to do the job for them. The end result will be more time, more money and more effort – time, money and effort that could have been spent educating kids. Now imagine this scenario being played out right across the public sector. Imagine every GP consortium, every hospital trust, every local council, every NDPB, every Sure Start centre going through exactly the same process. ’Decision making devolved to the lowest possible level’. Chaotic, uncoordinated, inefficient – that’s the government’s vision for the future of public sector pay determination.

2) It could lead to an explosion in localised disputes

Localised pay bargaining will not only be chaotic, it will also potentially spark an endless round-robin of localised pay disputes. Unilateral, decisions to attack pay, terms and conditions by local councils up and down the country have led to bitter and, in some cases, prolonged disputes. At the moment Southampton, Birmingham et al are relatively exceptional cases – localised bargaining will see these sorts of disputes raise their head across the country.

3) It would reinforce and entrench existing regional economic disparities

Lets go back to Newcastle, and assume the government gets its way. A school cleaner in Newcastle now earns about  15% less than her counterpart in, say, Basildon (equivalent to the existing regional ‘pay-gap’). How does this help to boost the North East economy? How does it create new private sector employment? The simple answer is, of course, it doesn’t. With 15% less wages to spend in the local economy, the consequence of regional/local pay will be to shrink those regional economies already most vulnerable. And the fact is this will not be restricted to the public sector. Lower public sector wages will drive a race to the bottom in the private sector as well.

4) It risks opening up the gender pay gap and leading to increased gender inequality

The struggle for equal pay – at the negotiating table and in the courts – has been a constant for public sector unions and their members over the past few years. Thousands of Tribunal cases, long and complex negotiations to deliver equality–proofed pay systems (exemplified by Agenda for Change)  - its been hard, but important work. Now all of that is at risk if the government gets its way. Coupled with the abolition of the two-tier code, arbitrary pay freezes and uncoordinated local ‘decision-making’, we can expect the government’s plans to localise pay to result in a huge widening of the gender pay gap and, consequently, Employment Tribunal claims galore. But maybe the government has thought of this. They plan to charge huge fees to access justice through an ET .

5) Fragmenting collective bargaining will widen income inequality and damage the economy

As my former colleagues Chris Wright has pointed out, there is a pretty strong social and case for collective bargaining – its well accepted that high collective bargaining coverage is one reason why the Scandinavian countries have world beating levels of income equality. But there is also a more hard-nosed economic case. Writing about this in August this year Chris noted:

While the additional funding for schools is welcome, the inequitable distribution of resources is one further reminder of the favourable treatment that free schools receive at the hands of government in comparison to local authority schools.  

And the same can be said of Academies. In his speech the Chancellor praised the Secretary of State for Education for his achievement in getting 1,200 schools to convert to academy status in 18 months. However, a hugely influential factor driving this trend has been the enhanced funding package on offer to schools which commit to becoming an academy.

On a more positive note there has been a general welcome for the announcement that many more 2-year-olds from disadvantaged communities will be eligible for the free childcare entitlement of 15 hours per week currently available to 3- and 4-year-olds. The government is currently consulting on an earlier commitment to extend the entitlement to 140,000 disadvantaged 2-year-olds. Today’s announcement will further extend coverage so that 260,000 (or 40 per cent) of all 2-year-olds will  become eligible. Leading childcare organisations, such as the Daycare Trust, have welcomed this measure but have also warned that the decision to freeze tax credits and to withdraw the promised above-inflation increase in the Child Tax Credit risks excluding many more parents from the labour market.

The skills announcements in the Autumn Statement were largely focused on the role that a further expansion of apprenticeship opportunities can play in combating youth unemployment. An element of the new Youth Contract involves a commitment to make 40,000 apprenticeships available in the first year of the programme by offering employers an additional financial incentive to recruit a young person to be an apprentice. This builds on an earlier announcement by the government setting out a new initiative offering  20,000 firms with up to 50 employees that don’t currently hire apprentices an incentive payment of £1,500 to take on a young apprentice aged 16 to 24.

Supporting unemployed young people to access genuine apprenticeships is of course a positive measure. However, there are dangers of damaging the “apprenticeship brand” and compromising employers and young people if this option is linked to benefit sanctions under the Youth Contract programme.

The Autumn statement also highlights other policy initiatives on apprenticeships, including a review into quality and standards to address ongoing concerns about the poor quality of a significant minority of apprenticeships. In a contribution to a recently published IPPR book – Rethinking Apprenticeships –  the TUC has argued that regulation needs to play a role in building a quality apprenticeship brand by setting some minimum national standards, including a minimum duration, as is the norm in other countries.

After a two year pay freeze (and even longer in local government), the Chancellor announced today that pay increases in the public sector will be capped at an average 1% for the following two years. This comes at the same time as the proposed average 3.2% increase in pension contributions (phased in over 3 years), and inflation rates predicted to be around 3%. The TUC has calculated that this leaves public sector workers facing an average cut in their living standards of 16.5% by 2014-15.

There is also grim news on jobs, with the OBR estimating 710,000 public sector job losses by 2017 (see page 95). This figure is the total amount of public sector jobs the OBR predicts will go between the beginning of 2011 and the first quarter of 2017. It is a significant shift from the prediction set out in the last OBR report in March, which predicted 400,000 job losses between Q1 2011 and Q1 2016.

And the Chancellor’s promise to look at “how public sector pay can be made more responsive to local labour markets” will add to concerns that the government is moving to fragment national collective bargaining arrangements.

Localising and breaking up pay determination arrangements can lead to equal pay issues, entrench regional inequalities and lead to duplication of time and effort spent gathering data and bargaining in hundreds or even thousands of local bargaining units. There’s lots more on these issues here and here 

The study was released this week to suport EI’s UK affiliates (ATL, EIS, NASUWT, NUT and UCU) who are striking against Government plans to slash teacher and other public sector pensions, with some teachers losing more than £50,000 over 20 years from the value of their pension. It argues that if the UK government took firm action on tax evasion, the money released would be more than what is going to be cut from public sector pensions.

The study underlines the shocking extent of tax avoidance by multinational companies, totalling trillions of US dollars annually. It follows on from a previous study published in March 2010 by Global Financial Integrity, a research and advocacy organisation promoting transparency in the international financial system, estimating that current total deposits just by non-residents in offshore and secrecy jurisdictions were close to US$10 trillion.

EI President, Australian teacher union leader Susan Hopgood, said:

“Closing loopholes in international tax legislation will require changing attitudes, and calls for strong political will. The widespread acceptance of tax avoidance as a legitimate goal of large corporations must change. Unless this appalling and unjustified tax evasion is stopped, quality public education and other services will continue to be put at risk by cuts in public spending.”

Meanwhile ITUC General Secretary Sharan Burrow, another ex-teacher, said:

“Hundreds of billions of dollars are lost each year as corporations find new and intricate ways to avoid paying their taxes, and governments compete to attract multinational investment by cutting company tax ever lower.  Governments are effectively cheating their own people of corporate tax revenues which could be put to good use in ensuring quality public services.  They need to focus on ensuring companies pay their fair share, instead of cutting back government services, reducing wages and reducing peoples’ rights at work through misguided fiscal austerity measures.  This report will help bring the scandal of corporate tax avoidance into the public spotlight.”

The report was commissioned by the Education International Research Institute on behalf of the Council of Global Unions, which  brings together the Global Union Federations with the ITUC and the Trade Union Advisory Committee to the OECD.

However, it remains to be seen how tenable these positions remain in the face of a deepening crisis across the sector.  It seems that every week brings worsening prospects for jobs, funding and services. 

While this clearly makes a mockery of the government’s Big Society aspirations, it might be argued that voices of opposition in the sector have been muted.  But is this soon to change?

Anger is clearly growing and not without reason.  Not only are voluntary organisations facing huge cuts and loss of jobs and services but, as we’ve blogged before, the promised opportunities are failing to materialise as private enterprise looks to dominate the open public services market.

Just how bad are things in the sector?  A quick trawl through reports in the last few months gives you a good idea.

The NCVO’s Charity Forecast shows that charity leaders’ confidence is lower than ever.  As NCVO’s report says:

98 per cent of charity leaders expect economic conditions within the sector to be negative over the next 12 months. This is the bleakest outlook in the survey’s three year history, with confidence levels lower than they were at the height of the recession.

Evidence from the Labour Force Survey shows that employment in the sector has fallen by 5% in the previous 12 months.  In addition, part time working is on the increase and average earnings have fallen to just over £10 an hour.  NCVO and Third Sector Research Centre report that employment is down over two successive quarters following the flatline towards the end of 2010.

An example of the impact on the workforce can be seen at Quarriers, the Scottish social care charity.  All 2,000 workers there are facing pay cuts, around a quarter of them losing at least 10% of their take home. On top of that are reductions in sick pay, maternity pay, paternity and adoption pay, increased pension contributions and an end to automatic pay increases in future.  This is not an isolated case.

Funding is nose-diving.  London Councils, for example, plans to cut voluntary sector funding by 75% from 2013.  Funding to the sector will reduce from £26m in 2010/11 to £8m in 2013/14.

Services are clearly at risk.  A report by the Charity Finance Directors Group and accountants PKF shows a picture of uncertainty and confusion over government policy with charities facing significant funding shortfalls and difficulty in planning and delivering services.  Richard Weighell of PKF says in Third Sector that:

there is a fundamental imbalance between supply and demand in the not-for-profit sector; charities are seeing growing demand for their services but are unable to invest enough to provide these services effectively

This is borne out by a poll of 120 organisations in the North East by Vonne that found that a quarter were expecting to close in the next 12 months and almost half were likely to shed at least one service.  73% had seen funding decrease in the previous year, 64% are using reserves.  Yet over two thirds had experienced a rising demand for their services.  And a London Voluntary Service Council survey showed, 70% of voluntary organisations reported an increase in demand for their services but 75% were not confident in meeting that demand now or in the future.

No wonder then that rumblings from within the sector are growing.  Will 2012 be the year when the sector begins to fight back? Feedback from trade union colleagues at voluntary sector events suggests so.  Building effective links between us will be essential if a serious challenge is to be made.

Unions, charities and voluntary groups have worked well on individual campaigns such as The Hardest Hit  and Justice for All.  And there have been some interesting developments on a regional level, interesting discussions have been taking place between the TUC and voluntary sector partners in the North West for example. It will be interesting to see how things progress but my prediction is that trade union and voluntary sector relationships are bound to develop as next year’s cuts bite even deeper.

I came across a blog from Gibb’s Barrow who had this to say on the politics of positioning in relation to product development:

Some people believe that the best way to produce a successful product is to align it with power and influence … while this might be an effective short term strategy, it is often the very reason why products fail to meet customer needs, why infighting occurs within organizations, and why product plans fall short of their goals.

The parallels are clear.  It is time for voluntary sector leaders to re-assess their strategy with a focus on what they are for and who makes up their constituency.  There’s a long game here with very high stakes, short term damage to the sector and those communities that rely on it could take years to repair.  The noises I’m hearing suggest that a re-alignment may be underway.

The Big Society seems increasingly conspicuous by its absence in government circles.  It might be about to make itself heard once again.

So the Local Government Chronicle quarterly survey of local authority directors and chief executives is a particularly useful snapshot of how public service providers are coping with government-imposed austerity.

The latest survey (see LGC 10/11/11)  has some telling results, with three key themes particularly apparent.

Firstly, services targeted at the most vulnerable are those that have suffered the greatest impact in the last 12 months.  Confidence that local authorities will be able to deliver corporate aims in the coming year remains worryingly low across all service areas.  But there’s large variation. Of the identified service areas, only waste broke the 50% mark.  Around a third were confident that street cleaning, licensing, planning and cemeteries and crematoriums were safe.  Significantly adult social care, housing, homelessness and economic development all registered below 10%.

Secondly, fears that the brave new localist dawn will overtaken by councils’ urgent need to cope with cuts are well founded.  The “dominant themes” for the next 12 months were all issues directly related to cuts and restructuring.  The three most dominant were making spending cuts (95%), reducing workforce (69%) and alternative service delivery (46%), the last of these being a polite term for outsourcing.  Languishing far behind were housing (16%), big society (12%), public health (18%), school building (4%) and the green agenda (3%).

Thirdly, unsurprisingly, pessimism over the economy is increasing.  Confidence that the economy will be better in a year has fallen from +28 prior to the general election to -85.  Net confidence of avoiding a double-dip recession has fallen from -44 before the election to -83 today.

Research published by the Royal College of Nursing today finds that more than 56,000 NHS posts are set to be cut.  Half of these are clinical posts and one third of them are nursing roles. Particularly worrying is the finding that the pace of cuts is increasing. There are also a number of associated trends of cutting hours and replacing experienced staff with cheaper workers at lower grades.

The second example is the u-turn on waiting lists. One of Andrew Lansley’s early decisions as Secretary of State for health was to relax the 18 week target for the maximum time between referral and treatment, as part of an overall move away from targets in the NHS.  But last week it emerged that almost a quarter of a million patients (9.4%) on waiting lists at any time go more than 18 weeks without treatment. As UNISON pointed out in their response to the announcement, the cuts are an important underlying cause of growing waiting lists, and it does not seem that more resources will be made available to tackle the problem.

And of course, as all this goes on, the hugely damaging Health and Social Care Bill is still being debated in the House of Lords. Controversial votes on the role of the Secretary of State for Health and the autonomy of local providers have been postponed in order to avoid government rebellions. One of the key issues still to be debated is the clause that would remove the cap on the amount of money hospital trusts can make from private patients. The TUC and unions across the health service fear that removing the cap would further increase waiting lists, as cash-strapped hospitals allow private patients to jump to the front of the queue for treatment.

Members of the House of Lords have also been calling on Andrew Lansley to publish the risk register for the Bill, which the Information Commissioner has instructed the Department of Health to publish. Given the huge concerns about the dangers of the Bill that are uniting health workers , it is essential that the register is published to shed some light on the government’s own assessment of the risks.

The government is cutting the UKBA workforce by a third from 2010 to 2015.  The simple fact is that they do not have enough bodies to do the job.  That is the entire rationale for the Agency’s move towards the “risk-based” security controls at the heart of the spat.  Both May and Clark have an interest in maintaining the lie that the pilot has improved efficiency. In reality, it has always been about keeping down queues at ports and airports because there are not enough staff to process them.

PCS has been at the forefront of the fight against the cuts in the Agency, mobilizing our members for action. Mark Hammond and Sue Kendal, two PCS reps who had been at the forefront of the fight against cuts in the Border Force, were sacked by management last year on what we believe were trumped up charges. This is part of a deliberate strategy by the Agency to silence dissent and mask the effect of the cuts that have created disarray.

It comes as no surprise to PCS to hear Brodie Clark complain of the department disregarding due process and overriding the right of workers to a fair hearing where the outcome has not already been determined.  The irony for Brodie Clark, of course, is that as a senior manager in the agency, he was once in a position to do something to stop it happening.

PCS has long highlighted the damage done by the cuts programme and the consequential inability of the Home Office to deliver the service to the public that they are duty bound to. Instead of listening to us and taking remedial action, the department has tried to silence us and rubbish our claims. Recent events, however, now leave them with nowhere to hide.

The issue of immigration has, for far too, long been a political football for the press and the mainstream political parties.  More often than not, it is ordinary workers in the Home Office who are getting kicked.  This is grossly unfair, as they work hard to deliver the best service that they can despite the chronic lack of resources. PCS would welcome a more rational debate on immigration, taking full account of all social, political and economic factors. Perhaps then, we could have a serious discussion about a properly staffed department.

PCS is leading the fight against the cuts in the Home Office. We are campaigning for:

• Job security, fair pay and fair pensions for our members and for all workers
• An end to the damaging job cuts programme within the Home Office
• Negotiations on a properly staffed and properly resourced department
• The re-instatement of Mark Hammond and Sue Kendal and an end to victimization of PCS reps
• An end to the enforcement of a “no dissent” culture in the Home Office

On 30 November 2011, the victimized will find their voice in earnest.

The FT leads on an Audit Commission report ‘Tough Times’, which reveals that  most councils have had to ‘reduce the quality and quantity of services’ they provide in the face of a real terms funding cut of £3.5billion over the last year. In addition to central government funding cuts, councils are faced with a £1.2bn funding squeeze driven by a loss of income and the government driven council tax freeze.

As well as the direct impact these cuts are having on vitally needed services, they are also having a perverse impact on efforts by local councils to increase economic activity.

This Guardian article highlights just one such example – the possible cancellation of Liverpool City Council’s support for the Matthew Street Festival. While on the surface it might appear that the loss of a ‘Beatles-themed festival’  isn’t all that important, its worth bearing in mind that Liverpool City Council estimates the £900,000 a year it spends on the festival generates around £17m for the local economy.  Its a small illustration of the economic madness of government  forcing local councils to make swingeing cuts at a time when private sector demand is so fragile. Liverpool faces cuts of £102m over the next three years.

And to top it all off, and again as Liverpool unfortunately illustrates, the Audit Commision’s report also notes that councils in the ‘deprived areas in the north, midlands and inner London saw the highest cuts’. ‘Fairness at the heart of everything we do’ seems a very long time ago.

Fairness indeed.

The government will be producing a white paper on the future of UK rail in the next month or so.  With three quarters of franchises up for renewal in the next five years, the opportunity remains to make a significant change to rail policy.

Will the government put the interests of rail passengers and tax payers first and put an end to our dysfunctional and costly privatised rail industry?  Or will it take the option presented by the McNulty report and slash jobs, break up the rail network further and hand more power to private train operating companies, rewarding their executives and shareholders alike?

At a rally and lobby in Westminster today, organised by the RMT, ASLEF, TSSA and Unite, hundreds of railway workers came along to call on the government to reject the McNulty proposals and to use the franchising process to bring rail services back into public ownership.

It is worth reminding ourselves of some of the proposals that he recommends:

• the loss of tens of thousands of frontline workers such as train guards, station and ticket office staff, as well as safety critical infrastructure and operational workers
• the closure of over 600 station ticket offices
• even greater commercial freedom for train operators, higher fares, cuts in services and more crowded trains
•  the breakup of Network Rail and an end to its ‘not-for-dividend’ status, making the railway more fragmented and inefficient and putting safety at risk

The TUC, RMT, ASLEF, TSSA and Unite have put together this briefing report which provides more detail.

The impact on rail passengers, particularly vulnerable passengers and those in rural areas, will be severe.  This is why the union campaign against these proposals will be building alliances with a range of passenger groups and community organisations.

Europe shows us that integrated, publicly-owned railways eliminate the massive costs and inefficiency of the privatised rail market where shareholders, consultants, executives and lawyers are the winners.  The McNulty report is clear that state run competitors in Europe are more cost efficient and offer cheaper fares to passengers.  With three quarters of franchises up for renewal in the next five years, bringing rail services in-house would be a painless process.

The choice is simple. We urge the government to put the interests of taxpayers and passengers first, and put an end to the disastrous privatisation experiment on our railways.

The Open Public Services white paper was big on rhetoric. But does it bear up to scrutiny?

Let’s take one example, public service mutuals. 

Take a moment to remind ourselves what the white paper says:

We are giving public sector staff new rights to form new mutuals and bid to take over the services they deliver, empowering millions of public sector staff to become their own bosses … we will not dictate the precise form of these mutuals; rather, this should be driven by what is best for the users of services and by employees as co-owners of the business.

To give them credit, the Government provide us with a specific example so that we can see this new wave of employee empowerment in practice.  The civil service pensions administrator, formerly part of the DWP, is to be spun out as a new employee-owned mutual, as part of a joint venture with a yet to be named private sector partner:

plans have been announced for MyCSP to become the first mutual enterprise to spin out of a central government service … the innovative ownership model will be matched by a participative management approach: there has already been a strong turnout in elections for the Employee Partnership Council, through which employees will have a meaningful say in the running of the business.

Interesting then that survey results published today by PCS show that the staff are feeling very far from empowered.  211 out of a total of 380 staff based at the MyCSP offices in MyCSP offices in Basingstoke, Cheadle Hulme, Liverpool, Newcastle and Worthing responded to the poll run by PCS.

94% of respondents said they did not agree with Mr Maude that turning MyCSP into a ‘mutual joint venture’ would “empower employees and drive up performance”. More than 95% said they wanted to retain their civil service status – a request the government has refused.

No wonder then that the employers have consistently opposed surveys of staff opinion.  Prior to the latest findings by PCS, the only other ballot to have taken place among MyCSP staff was for industrial action where a majority voted in favour of strike action to protest against their enforced transfer.

It looks like staff are having a meaningful say through their union, at least.

In the most recent year (2010/11) total investment in General Practice in the UK was £9,789.4m, compared to £9,748.7m spent in 2009/10 – an increase of just 0.4%. This represents a substantial slowing down of progress:

The breakdown for the nations of the UK is:

(The report indicates that “the large increase for Northern Ireland between 2007/08 and 2008/09 is largely due to the increase in employer superannuation contributions”.)

We can expect to see plenty more statistics like this over the coming years.

• Local NHS Foundation Trust, Surrey and Borders Partnership
• Much lauded NHS social enterprise spin out and ‘Big Society Award’ winner, Central Surrey Health
• Private provider, Assura Medical Ltd, 75% owned by the Virgin Group?

Those of you familiar with the Government’s private sector bonanza that was the Work Programme will probably have worked it out.  The award of NHS Surrey’s community health services to Assura Medical Ltd has caused a fair degree of outrage.  Clearer evidence of the privatisation by stealth of the NHS would be hard to come by.

And, of course, this is also another wake up call for those who retain faith in the Big Society and the Government’s stated intention to open up public services to social enterprises, charities and employee-led mutuals.

Advocates of the role of social enterprise in the delivery of public services are understandably dismayed, afterall Central Surrey Health was described by Cabinet Office Minister Francis Maude as “the Big Society in action”.

We’ve said before that the market is at the very heart of the Government’s public service reforms.  As a social enterprise, employee-led mutual or local community or voluntary organisation you will be invited to compete but don’t expect any favours.  The market is fundamental.  The Open Public Services White Paper is very clear on this.

And so it goes.  More ’open  public services’.  More private sector winners.

No wonder then that Peter Holbrook, Chief Executive of the Social Enterprise Coalition, is becoming increasingly hostile.  The Social Enterprise Coalition found plenty to criticise in the Open Public Services White Paper.

In response to this week’s news in Surrey, he had this to say:

It is not enough for government to open up markets; it needs to create fair markets that benefit society. Some of the financial criteria used in contracts create an unequal playing field in which social enterprises are unable to compete because they may not have the same financial backing as private sector providers. Unless swift action is taken to address this we will see social enterprises and mutuals lose out to the private sector.

Judging by the direction of travel outlined in the White Paper, the Localism Bill and the Health and Social Care Bill, we don’t think this Government is about to alter its adherence to competition at all costs.

To its credit, the Social Enterprise Coalition is unafraid to call the Government out on this, unlike some other ‘leaders’ we might mention in the not-for-profit sector.

Peter Holbrook is completely right when he suggests that

public sector workers would be ‘understandably anxious’ about spinning out from the NHS and setting up a social enterprise on the back of this news.

But his call for reassurance from the Government that “they will not be operating in markets weighted against them” might be misplaced.

Markets will be inevitably be weighted against any kind of provider that does not share the economies of scale, access to capital (reportedly the crucial element in the Surrey example) and capacity to tender that larger private providers do.  This is why evidence across the EU suggests that the main result of the liberalisation of public services is the transfer of ownership rather than an increase in the diversity of providers.

Earlier this year, it seemed that the Government had scored a significant and somewhat unlikely PR coup. They were pushed into a ‘listening exercise’ due to widespread opposition to the Bill and concerns from the Liberal Democrats which came to the fore at their spring conference. The Future Forum set up to look at the reforms made some useful recommendations about ways to improve the Bill, but didn’t go anywhere near far enough to deal with the fundamental concerns about the Bill. But the media was keen for a story about the political machinations behind the coalition, and so the Government managed to present themselves as having listened and responded to concerns and having overhauled the Bill.

In fact, the Bill that returned to the Commons yesterday is still a toxic combination of competition, markets and fragmentation that could shake the foundations of the NHS. The changes made following the listening exercise make minor improvements in some areas, but in others they leave the Bill more complex and muddled and make the system more bureaucratic and unaccountable.

To take just a few examples of the areas where we still have serious concerns:

The Bill still means competition instead of collaboration. The Government hasn’t followed through on the Future Forum recommendation to strengthen the emphasis on collaboration as the best way to improve care for patients. Instead, it still has a big focus on competition. This is despite evidence that the NHS is one of the most cost effective health care systems in the world – in a recent academic study it fared much better than the system in the USA, where competition is central. Much of Part 3 of the Bill, which includes the arrangements for the powerful economic regulator, Monitor, remains unchanged. In the original Bill Monitor had a duty to promote competition. That has now been amended to a duty to ‘prevent anti-competitive behaviour’ – which appears to have virtually the same meaning in practice. The Government is also pushing ahead with plans to allow ‘Any Qualified Provider’ to deliver NHS services, opening up swathes of the NHS to private and voluntary sector providers.

It still means private patients jumping the queue. The Bill removes the cap on the amount of money NHS hospitals can make from private patients. This wasn’t mentioned in the Future Forum report, although the Chair of the Forum, Steve Field, has said he now regrets not mentioning it. Professor Field said that the “gut feeling” from the listening exercise was that “the private cap should stay because people felt that would provide the protection”. What the removal of the cap could mean in practice is NHS patients being pushed to the back of the queue for care, while private patients jump to the front. With foundation trusts strapped for cash, the temptation to prioritise paying patients will be strong. It also makes it more likely that hospitals will be opened up to EU and UK competition law.

The Bill still means a fragmented system and a lack of accountability. Despite the Government’s assurances to the contrary, independent legal advice obtained by campaign group 38 Degrees has confirmed that, if the Bill goes ahead as currently drafted, the Secretary of State would no longer have the duty to provide a comprehensive health service. It would be up to local commissioning groups to determine not only what needs to be provided to meet the needs of the local population, but what is ‘appropriate’ to provide as part of the NHS. This was one of the issues highlighted this weekend by Baroness Shirley Williams, who believes it will lead to fragmentation, postcode variation and a lack of accountability.

There are still fears about lack of transparency. Private and voluntary sector providers will have a much bigger role delivering NHS services if the Bill goes through, but the Bill doesn’t hold them to the same standards of transparency as NHS providers. Foundation Trusts and commissioning groups will be required to hold their board meetings in public – although loopholes in the Bill will allow them to exclude members of the public in some circumstances. But it does not seem that even these relatively weak requirements will apply to non-NHS providers.

The reform is getting even more expensive. All of this comes at a time when the NHS has the tightest financial settlement in many years and is being asked to make ‘efficiency savings’ worth £20bn by 2014-15 and to cut management costs by 45 per cent. The cost of the reorganisation is estimated to be up to £3bn, and the Department of Health’s own figures show this is rising by £1 million a day. The Government hasn’t yet produced a revised impact assessment to show what they estimate the latest cost of the reorganisation will be – this is expected later this week, after the MPs have debated the reforms. We already know that tens of thousands of jobs are being cut, including clinical posts.

The Government continues to claim they have the support of health bodies – David Cameron repeated this line at PMQs today. But the evidence all points in the opposite direction: to massive concern and opposition from across the health service. Unions and professional bodies representing doctors, nurses, physiotherapists, midwives, cleaners, administrators, managers, porters, radiographers, community and mental health professionals and many, many more have spoken out. The fight for the future of the NHS won’t end in the Commons, and we’ll continue to lobby and campaign if the Bill heads to the Lords after this evening’s vote.

A not entirely seriously filmed video from UNISON, highlighting a very serious point. Clause 168 of the Health and Social Care Bill removes the restriction on the amount of income a Foundation Trust can make from private charges – the so called “private patient income cap”.

As Foundation Trusts are already being told to find £20bn in efficiency savings, we believe many will seek to maximise their income from other sources by giving greater priority to paying private patients. If this happens, NHS patients could find themselves being pushed to the back of the queue for care, and waiting lists starting to grow again. 

The TUC and health unions will be lobbying Parliament over the Bill’s Commons third reading, next Tuesday and Wednesday (6th/7th Sep). Please join us in standing vigil for the NHS by uploading your photo to a giant photo mosaic we’re producing to show the depth of concerns around the country about the future of our National Health Service.

Does Mr Cameron seriously expect us to believe that further cuts won’t have the same effect?

It’s even more interesting than the original leaks suggest!

We also now know that it was written in late May. So to be fair I should note that the government’s position has shifted a little since then, but not by a huge amount or in ways that deal with the points raised in the letter.

So here’s a bit more from it with some further analysis. (My words are not indented or in italics.)

I believe we need to particularly consider the following key issues:

• whether to agree the recommendation of all staff moving to a normal pension age linked to the state pension age, with career average accrual.
• the cost envelope for scheme changes: will it be based around maintaining the current level of employer contributions, or do we intend to reduce employer contributions and reduce the accrual rate available further.

This is a particularly crucial, if opaque, sentence. As I said in my previous post, as the government has reduced the value of pensions by switching indexation to CPI, the total contributions required to fund them falls. Changing employer contributions has no impact on current spending (and thus the deficit) as in pay-as-you-do schemes without funds under investment they are simply money that goes out of the Treasury through one door and back in another . But they are important in working out the level of pension because of their impact on the cost envelope.

This is an important concept in public sector pensions. It is simply a bit of jargon for the funds that will be needed to pay the expected future cost of pensions. You can cut this in different ways between pensioners. For example a change between career average or final salary pensions will produce winners and losers and an increase in the pension age can mean higher pensions but for a shorter retirement period.  All these different design features however must produce a bill in line with the cost envelope.

• for the NHS, the issue of access is critical.  I believe that the Hutton recommendation on restricting access to public sector employees only is both inappropriate in the context of our market changes and would lead to substantial reductions in receipts to HMT as 15% of the value of the NHS Scheme is already in the non-public sector through general practice and direction bodies.

Again we see the difference between the short-term and the long-term. Restricting membership of pay-as-you-go schemes now reduces costs when these people retire but until then it simply stops employee contributions going into the Treasury and make the deficit worse.

• how we explain the rationale for all schemes having the same increase in employee contribution rates when the current employee contribution levels in relation to the value of benefits are very different.  I remain concerned that we will face considerable resistance from NHS staff who will be paying significantly higher levels of contributions than some other schemes.

This needs no comment!

We also need to decide whether our aim is to achieve a negotiated agreement with the Trade Unions or whether we intend to impose unnegotiable changes with the impact on industrial relations that will surely follow.

This is another significant sentence as it questions the seriousness of the negotiations. Although there have been some serious negotiations, doubts remain about this.

The paper you tabled with the Trade Unions modelled career average accrual rates of 1/100^th, 1.90^th and 1/80^th and suggested that 1/100^th would be sufficient to meet Turner replacement rates.  If it is our intention to introduce career average accrual rates at these levels, then it is difficult to see how a negotiated agreement could be reached with the Trade Unions.   These accrual rates imply a significant reduction in the employer contribution rate.  This would result in a further substantial reduction in the value of the public sector reward package on top of the increase in employee contributions, to move to CPI and the previous Government’s changes.  All the accrual rates modelled would result in lower employer contributions if employee contributions remained at the level set out in our plans.

I dealt with this in my earlier post

The paper also assumes that public sector workers, many of whom are women, will work a 48 year career to achieve Turner income replacement rates in retirement.  In the NHS currently, the average full time career for those taking a pension is only 18 years and it seems unrealistic to suggest that pension scheme design should be based on the assumption that a predominantly female workforce will need to work full time 48 year careers in future to receive a full pension.  It is also difficult to see how this meets our commitment to maintain gold standard pensions.

The NHS is engaged in a major programme of public service reform.  Other departments have similar ambitions.  We are doing this against a background of a two year pay freeze and job cuts as well as the pension changes.  The combined effect of the CPI changes and the previous Government’s reforms has been to reduce the value of public service pensions by 25% for new starters since 2008 and by  half that for existing members.  Members contributions will go up by about half as a result of the CSR announcement.

Contribution rates in the NHS are already among the highest in the public sector, in relation to the level of benefits provided.  We have to have a strong narrative; explaining why it is fair that staff should pick up a greater share of the cost of providing benefits, show staff the real value of their pension, that they remain very good value for money and that differential contribution rates between different schemes are justified in terms of the overall reward package.

We face a real risk, if we push too hard, of industrial action involving staff groups delivering key public services.  There is also the risk that lower paid staff in particular will simply opt out, leaving HMT with reduced receipts in the short term while still having to pay for past pension promises.  In the NHS, if it appears that we intend to significantly reduce the value of future accruals we also face the risk of opt out from  higher paid groups as well as the lower paid.  GPs for instance pay both employer and employee contributions and can choose to invest them elsewhere or take them as pay.  This would create a significant fiscal pressure in the short to medium term and in respect of lower paid staff who opt out would increase pressure on the social security budget in the longer term.

Again these paragraphs speak for themselves.

What strikes me is that it is becoming more clear that the government went into this issue with a very incoherent agenda.

They are unclear whether their priority is reducing the long-term cost of public service pensions (which the switch to CPI indexation did at a stroke), whether they are interested in the detailed design of schemes such as career average rather than final salary or whether they simply want public sector workers to suffer not just the real terms pay cut that a pay freeze achieves but a cash reduction in take home pay through increased contributions.

This confusion is one reason why they have come unstuck on long-term affordability so badly, as this is clearly not out of control.

Unions know that pension schemes change from time to time when factors such as unexpected increases in longevity occur.

How you share out pensions through scheme design elements such as career average or final salary can be debated. If you keep the same cost envelope, then some lose and some benefit – and the arguments can vary from scheme to scheme and workforce to workforce.

But mixing all these issues up at the same time is simply a recipe for confusion, especially when ministers raise doubts about the seriousness of the negotiating process.