Sunday, January 04, 2015

A cap on public sector redundancy pay-offs? A liberal bureaucrat writes...

The news that the Conservatives intend to legislate for a £95,000 cap on public sector redundancy pay-offs is a somewhat depressing way to start the New Year. That's not because I had any hopes of receiving such a thing myself - no, I'm fully hoping to fulfil my role for many years yet, but because it appears so contradictory to much of what is supposedly desirable.

Firstly, such a proposal flies in the face of the concept of localism. Shouldn't it be the case that a local authority, led by councillors who are directly elected, and deciding that a particular course of action offers best value to the electorate, should have the right to act accordingly, without arbitrary hinderance from central government? After all, if councillors are wasting my money, I can, and should, seek to replace them via the ballot box.

It also seems to contradict the expressed wish of the Conservatives to professionalise public sector institutions, attracting the best of private sector talent to enter public service. You are, already, probably asking them to take a sizeable pay cut - you'd already attacked public sector pay scales, and by now making it easier and cheaper to fire them once they've taken the leap, you chip away further at one of the more obvious attractions - stability of tenure.

It also risks reducing innovation in the delivery of public services. Why take on a new challenge, perhaps uprooting your family to do so, if there is a risk that it might not work out, causing you to lose your job? Senior public servants often discover that, after a change of administration, they may not suit the style of the incoming leadership yet be perfectly capable at what they were asked to do. Are you sure that punishing someone for being unlucky enough to be in the wrong place at the wrong time is fair or honourable?

It's also imprecise. Does the cap include pension contributions, lost bonuses and all the other paraphernalia of performance related pay. If so, might that remove from local government to reward on the basis of proven long-term achievement - for example, if you want to incentivise someone to ensure that target X is met in three years, are you saying that, should you decide that they need to go before that date, for reasons beyond your mutual control, they will forego that which they have earned?

And, finally, it is likely to impact on flexibility. Sometimes, it is better for all concerned to offer a package to bring a relationship to an end. If, on the other hand, the package offered is too restricted, why co-operate if the compensation on offer doesn't cover lost earnings, relocation costs, potential reputation damage? No, better to see out your contract and control your own future, especially given the costs of any legal process from the perspective of the employer.

Don't get me wrong, I can see the short term, political attraction of such a policy. Public sector workers are an easy target - overpaid, underworked, over-pensioned busybodies who get in the way of our day to day lives. The problem is, they're still needed, every time someone says, "There ought to be a law against it!", or, "The Government must act!", or when someone litters the street or requires someone to look after granny.

And if you want to attract the sort of people who can run those services better, find innovative ways or doing more with less or even, if you're the Government, run things without making you unpopular in the process, you really need to be a little more realistic, and offer slightly less blanket criticism and deprecation.

I'm a firm believer in a well-run, efficient and effective public sector. If you provide people with the right incentives, you can do more with less, generating the sort of goodwill that radical reformers need in order to re-engineer government to face the challenges of the coming decades. Sadly, I don't think that many politicians get it, and fear that those who do have vacated the field in search of more fruitful areas of campaigning. I just hope that we don't find ourselves regretting that one day...

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