Public services in the aftermath of the economic crisis:

how social dialogue influences changes in public sector

employment relations in the UK

Stephen Bach Alexandra Stroleny

King’s College London

Introduction• 2010: Conservative-led Coalition

focus: fiscal consolidation• qualitative: familiar Conservative Party themes of

outsourcing, local pay and deprivileging PS IR • quantitative: sharp reductions in public expenditure PS employment cuts + incomes policy based on a two year wage freeze

limited scope for workforce engagement & dialogue with PS trade unions

1999 2001 2003 2005 2007 2009 2010 2011 2012459

759

1059

1359

1659

1959

2259

2559

2859

UK Public Sector Employment 1999-2012

Source: ONS; Publication: PSE, available at http://www.ons.gov.uk/ons/rel/pse/public-sector-employment/q1-2012/tsd-pse-time-series.html

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Civil Ser-vice

Education

Central Gov

Local Gov

NHS

Austerity - Drivers1. Deficit speed & depth• 2010 Comprehensive Spending review: - Aim: deficit reduction: 2009: 8.4% of GDP

2015: 0.4 %

2. Ideology + underlying economic assumptions• No consultation with TUs + employers prior to

announcement of wage freeze- three quarters of deficit reduction linked to

public spending cuts

Planned cuts to UK spending: historical record – IFS 2012

General Government Employment – OBR: March Forecast

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-174.9

5

5.1

5.2

5.3

5.4

5.5

5.6

5.7

General Gov Em-ployment forecast

mill

ions

Source: OBR

Measures - Wages• 2- year pay freeze (2011-12 & 2012-2013 )

2 years: pay awards - 1% cap • across all areas of PS, staff earning £21,000 or

less: some protection• progression arrangements - annual pay

increments average PS pay still growing in nominal (but not real) terms

• Pension changes 30th Nov strike some concessions dispute settled in local gov, partly in civil service, remains unsettled in NHS

Local Government

• LGA (Local Government Association)• NJC (National Joint Council for Local

Government Services)• Local auth. = greatest formal employer

autonomy + discretion over how match pay scales to national negotiated pay spine ‘single status’ national framework (‘Green Book’) -some local variation – Part 2 vs. 3

Local Government

• 2010staffing reductions, changes in allowances for working anti-social hours, reduced mileage rates for car users, reduced sickness entitlement & annual leave

• explicit trade-offs offered to workforce reg. contractually entitled incremental progressionstaff ballots – different outcomes

• Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992

Case StudiesSouthampton City Council Oxford City Council

Background (Political Control; Location)

Conservative , South-England Labour, South-England

Social Dialogue No Yes

Union exclusion Yes No

Employment Reduction Many Few

Pay Reductions Yes, unilaterally imposed Yes, by agreement

Changes to terms & conditions

Yes, unilaterally imposed Yes, by agreement

Degree of concession bargaining

Low High

Communication & participation

No TU: industrial action Yes, through many channels

Challenges• Employers more assertive: • austerity => seeking changes• challenge of maintaining staff engagement & morale• HR capabilities to manage change effectively ?

• TU weaker (membership + density => fall)

options:

1. concession bargaining

2. not engage with employers

3. Attempt to mobilise & risk marginalisation

Conclusion

• Quantitative: job cuts, wage freeze; shrink state

• Qualitative: expansion of a variety of providers, erode national systems of collective bargaining

• Social dialogue: Nationally – limited

Locally - variations