A version of this article appeared in Public Service Magazine, October-November 2004
Chancellor Gordon Brown’s plans to cut posts from the civil service rely heavily on greater use of IT. He told the House of Commons on July 12: “It is precisely because the public sector has invested £6 billions in new technology, modernising our ability to provide back office and transactional services, that I can announce… a gross reduction in civil service posts of 84,150.” A further reduction of 20,000 posts from local and devolved national governments is also on the cards.
The newly formed HM Revenue and Customs department is to lose 16,000 posts, largely as a result of rationalization of back office functions and increased use of IT.
Parts of the private sector have used computerisation to cut posts, in some cases for decades. So what can the state sector learn from their experiences?
Ed Sweeney, general secretary of banking union Unifi, says that post reduction needs to be done with care, as much as for the employer’s benefit as for staff’s. He has seen gung ho firing policies leading to a bank that fires those running an old IT system need to rehire them for much more as contractors when it found it needed to keep the system going after all.
Sweeney says the better way is to keep staff employed. One way of doing this was mentioned by the Chancellor in his July statement: reskilling within the state sector. Sweeney says another way to reduce posts without compulsory redundancies is by allowing staff more flexible working, through job-sharing or sabbaticals. “I would hope the FDA starts to look at the soft elements – the work-life balance, elements we all want in society,” he says.
BT, like many telecoms firms worldwide, found it needed far fewer staff as a result of technological change. It reduced its workforce from 249,000 in the early 1990s to fewer than 100,000 today – without compulsory redundancies. “That was absolutely fundamental,” says Joe McDavid, BT’s group employee relations and policy director. “”We sat down with the unions and they said they would help us as long as [redundancies] were on a voluntary basis.”
McDavid says it experimented with different incentives, then tailoring packages as a result: those near retirement could be encouraged with bigger pension contributions, whereas those wanting to move to a new career might be tempted by cash allowing them a breathing space in which to retrain.
It also meant allowing people to leave a department or role in which when BT didn’t want more redundancies. “Rather than say, no you can’t go, we reskilled someone from another area,” says McDavid. “If you’re looking for volunteers, they won’t all come from the area you want them to come from.” To the same end of not disappointing those applying, specific staff which BT wanted to retain were told this upfront, rather than letting them apply for voluntary redundancy and being rejected. “We have a policy of putting our arms around these people, saying don’t volunteer, the business wants you to stay,” says McDavid.
While losing three-fifths of its staff, BT was recruiting specialists to support its new technology. McDavid says the lack of compulsory redundancies stopped those leaving from complaining about joiners stealing their jobs.
McDavid says the whole process could have taken place faster, if cost-cutting alone had been the point: “You need to maintain a successful business. The quicker you did this, the more you risked damaging the brand and customer service.”
Unlike BT and the financial sector, the UK government cannot tell its staff that it needs to cut jobs to stay competitive with commercial rivals. There are other problems, according to Unifi’s Ed Sweeney: banks, insurers and building societies have been investing successfully in IT for decades; staff in finance are relatively relaxed about changing jobs and employers; and companies can, to some extent, pick customers who are happy to use cheaper new technology such as online banking, in a way that the public sector cannot.
Sweeney thinks it is important for senior civil servants is to consider computerisation plans carefully, to check whether they will deliver what they promise: “The fundamental point is, what is the system meant to provide for, and how does it fit?”
Eric Woods, government practice director at IT analyst firm Ovum, agrees that civil servants will be vital in getting e-government services to work. “They are going to be a critical part of selling these processes to more reticent groups [of the public]. I think it’s important that people don’t see IT as the enemy.” he says.
He thinks there are a number of reasons why it will be difficult to link computerisation specifically to job-cuts. One is that IT projects often produce heightened expectations: “If you put in electronic processes for planning applications, people expect the planning service to be quicker,” he says. Or users may need extra support, at least at first, such as through helplines, for example.
Furthermore, most state sector organisations will find it difficult to close traditional ways of interacting with the the public, and will need to keep dealing with post and visitors in person. Trying to close such channels can cause political problems: “One only has to look at the closure of local post offices to understand that,” says Woods.
He thinks computerisation for efficiency is likely to work best in large-scale transaction processing areas which currently require many staff. “That will be the low-hanging fruit,” he says, in terms of cutting posts. “However, I don’t know if that will get the impact on posts the Chancellor wants.”
The other major way to cut posts will be to consolidate functions such as human resources or IT across the state sector. “That’s much more complex,” says Woods, as it depends on changing the way that organisations do business as much as on technology. “It will take longer, and there will be hiccups on the way.”
However, he thinks that as with telecoms and banking, civil servants will accept there is no alternative to computerisation – and if they do not, projects involving it will be likely to fail. “The value of those who understand the business is critical in making it work. Modern government, like modern banking, is inseparable from the IT that supports it.”
IT has been used successfully to cut posts in organisations, but it can take time and care to do so without damage. The Chancellor should be careful not to urge departments to fire the very people on whom continuity of service depends until they are absolutely certain of what their IT systems can (and cannot) deliver. Most importantly, the support of all staff involved in crucial.
Copyright SA Mathieson 2004