Action threatened after Budget pay curbs

United Kingdom public sector unions have reacted with fury after the Government announced that pay increases across the Public Service would be pegged at an average of two per cent for the year ahead, despite surging inflation.

In a written statement, Minister for the Cabinet Office, Heather Wheeler said public sector employers would “have freedom to pay average awards up to two per cent, plus up to an extra percentage point in some cases”.

Chancellor of the Exchequer, Rishi Sunak lifted a freeze on public sector pay last year, but the fresh limit suggests the Treasury remains reluctant to loosen the purse strings.

By contrast, the latest official figures showed average pay across the economy was increasing at an annual rate of 4.8 per cent. Public sector unions had been calling for increases of up to 10 per cent.

General Secretary of the Public and Commercial Services (PCS) union, Mark Serwotka said the offer was, in effect, a pay cut because of rising inflation.

He predicted industrial action could follow.

Deputy General Secretary of the Prospect union, Garry Graham said with inflation rocketing, a national insurance increase coming in and energy prices going through the roof “this pay remit guidance means yet another crippling real-terms pay cut for Civil Servants”.

“Once again the Government is using Civil Service pay as a political football and attempting to balance the books by penalising the people who have delivered so much through the twin challenges of Brexit and COVID,” Mr Graham (pictured) said.

General Secretary of the FDA, the union for senior Public Servants, Dave Penman said the Government has decided to abandon its own workforce.

“Ministers are running around with their fingers in their ears trying to pretend it’s business as usual,” Mr Penman said.

Director of the Institute for Fiscal Studies think-tank, Paul Johnson suggested that with Public Service pay already having been hit by a decade of real-terms cuts, the Government was “testing the limits of employee patience and of the labour market”.

In an interview with the British Broadcasting Corporation, Mr Sunak said he did not mind being unpopular because he was doing the right thing for the economy.

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Female executives to shake-up Japan's PS

Two female executives with experience at American companies have been given the task of reforming Japan's Public Service system.

Katsura Ito and Yuko Kawamoto aim to move the bureaucracy away from its traditional focus on seniority and lifelong employment toward a merit-based approach more common in the private sector and overseas.

They will serve together on the National Personnel Authority (NPA), the Agency that makes recommendations regarding pay, working conditions and hiring guidelines for the country's Public Servants.

Ms Kawamoto heads the NPA. A former McKinsey consultant, she represents a departure from the bureaucrats and legal professionals who traditionally fill this role.   

Ms Ito, the Chief Learning Officer at Microsoft Japan, offers experience with marketing and systems engineering. She has been approved by Japan's Lower House to become a Commissioner for the NPA.

During her confirmation process, Ms Ito called on the Japanese bureaucracy to look beyond seniority when making personnel decisions.

"We could have a sort of fast pass for promotions based on merit,” Ms Ito said.

“The current system, which hires Public Servants for life, makes it difficult to take advantage of outside talent."

She advocated more fixed-term contracts and other efforts to attract private-sector expertise, while urging all Government Agencies to digitise in order to boost productivity.

Many of Ms Ito's arguments fell in line with reforms being advanced by Ms Kawamoto, and her confirmation could bolster the Agency chief's drive to overhaul how Japan's bureaucracy operates.

After becoming the NPA's President, Ms Kawamoto pushed to let individual Government Agencies grant most fixed contracts of up to five years without seeking approval from the Authority.

The changes come as the number of applications for the Public Service examination has fallen by around 30 per cent over a decade. Meanwhile, 87 full-time, career-track Public Servants in their 20s quit for personal reasons in fiscal 2019 — four times more than the number six years prior.

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Indonesian officers unhappy with capital move

Some Indonesian Public Servants are pushing back against forced relocation from Jakarta to the new capital of Nusantara.

Authorities say the move is necessary to save sinking and congested Jakarta as well as to enhance development in Kalimantan and eastern Indonesia. 

However one Public Servant, Dwi (not her real name) said she had no desire to make the 2,000-kilometre relocation.

“I'm not sure the move would be good for me. One of my concerns is, what about my husband whose job is in Jakarta?” Dwi, a Government worker for 11 years, asked.

She also wondered what the new capital could provide for her three children, who are now aged between two and nine. 

She is not the only Public Servant who is hesitant to move to the new capital.

Jason Kusuma (also not his real name) is concerned about his children’s education. 

“I have a child with special needs, so he needs certain treatments. Will the new capital have the facilities my child requires?” Mr Kusuma asked.

He also has ailing parents in Jakarta and feels obliged to take care of them. 

“I may resign. It is in my list of options, but I would like to wait and see how things develop,” he said. 

Budi Darmawan (not his real name) did not hesitate to leave the Public Service last year when he was sure the capital relocation would happen.

“When we don’t fit in (with the Government’s vision) anymore, it’s better to leave. No problem,” Mr Darmawan, who has set himself up as a consultant, said.

Speaking at the annual joint military and police leadership meeting, President Joko Widodo said sworn officers must not question Government decisions that had been decided through democratic means.

“The capital move has been decided by the Government and it has been approved by the Parliament. According to the discipline of the military and police, this is no longer debatable,” Mr Widodo said.

Treasury ‘prepared for major pay deal’

United Kingdom Treasury documents have revealed the Government is prepared for a pay deal which gives its 5.5 million public sector workers increases beyond the current rate of inflation.

Negotiations with unions are under way, with the Treasury advising public-sector pay review bodies, which make the final recommendations, to use its two per cent inflation target as a guide rather than the Bank of England’s forecast of 5.75 per cent for the year.

However, figures buried in Office for Budget Responsibility (OBR) documents reveal Government spending plans assume the public sector wage bill will increase by 6.7 per cent in the fiscal year starting next month.

A pay rise of that amount would almost certainly be enough to match the annual rate of inflation, even after accounting for the rise in energy prices since Russia’s invasion of Ukraine.

Public sector employers and unions are currently locked in pay negotiations, with April the key month for settlements. Staff want wages to keep up with surging inflation, and a shortage of workers is giving them rare bargaining power.

In February, the Government proposed a three per cent pay rise for the National Health Service’s 1.3 million staff.

Public Service union, Unison said the “tight-fisted” offer was a wage cut in all but name.

The National Health Service’s pay review body is now considering what to recommend.

OBR projections suggest the big increase in Departmental spending announced in the October Budget might be enough to meet Government plans for Public Service provision and increase pay significantly for public sector workers, who have been subject to freezes and tight pay-rise caps in recent years.

A Treasury spokesman played down the OBR forecasts, saying an assumption of pay bill growth could not be derived from them.

“Pay increases need to be proportionate to the pay rises in the wider economy, balanced with the need to manage the country’s long-term economic health and protect public-sector finances,” a spokesperson said.

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Public sector may trial four-day week

 More people in Wales could be working a four-day week after the country’s Commissioner for Future Generations, Sophie Howe called on the Government to launch a shorter working week trial in the public sector.

Ms Howe (pictured), a Government official whose role, enshrined in law, is to protect the interests of future generations, said the Public Service should lead the way and inspire other businesses to follow suit.

She acknowledged there would be a heavy cost to the public sector in the short term, but argued that it could eventually mean increased productivity and savings for society if it led to a healthier workforce and more cohesive population.

“It’s clear that following the pandemic, people across Wales are re-evaluating their priorities in life and looking for a healthier work-life balance,” Ms Howe said.

“The escalating demands of caring for loved ones due to an ageing population and an increase in mental health issues, exacerbated by working long hours, are just some of the factors that make a shorter working week more appealing.”

Noting that the working week had not changed for more than 100 years, she said now was the perfect opportunity for the Government to commit to a pioneering trial and build evidence for greater change across Wales.

A report by Ms Howe and think tank, Autonomy found that about two-thirds of Welsh people would ideally work a four-day week and almost 60 per cent said they would support the Government piloting a scheme to move towards it.

“Moving to a four-day week in the Welsh public sector could be particularly effective as sickness rates are high there, and giving staff an extra day off could help to tackle this,” the report says.

“It would foster better cohesion by giving people more time to take part in community groups and projects, and could cut carbon emissions by reducing commuting.”

It also argued that a shorter working week would especially help women, who had less free time on average than men.

A Government spokesperson said it recognised the potential benefits of a shorter working week.

“We are considering the progress of pilots in other countries and examining the lessons Wales can learn,” the spokesperson said.

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Concern over ‘revolving door’ officials

 Many former Israeli Public Servants enjoy lucrative second careers in the private sector, new research has revealed.

Data collected by the Bank of Israel shows that more than half of the nation’s publicly-traded companies employ former officials, including regulators who once oversaw the same companies they have now joined.

The report’s author, Noam Michelson said the “revolving door” trend, in which Public Servants transitioned to work in the private sector, represented a challenge for democracies and developed economies.

“There is a need to strike a balance between conflicting needs: Public interest versus employees’ rights,” Mr Michelson said.

“On one hand, such transitions, if not properly regulated, can lead to abuse. They may give an unfair advantage to companies that employ former Public Servants who could use their knowledge and connections to influence future regulation.”

He said in addition, the lure of the private sector could influence the decisions of current regulators who might try to avoid harming their chances of future employment.

“On the other hand, Governments need to be able to attract top talent to the Public Service, part of which requires that they refrain from curbing workers’ employment options once they leave,” Mr Michelson said.

“At the heart of the debate… lies the question of the balance between public trust, market freedom and efficiency, and the individual’s freedom to engage in any occupation.”

He said a society could shore up trust in the public sector by banning all transitions of former Public Servants to private-sector jobs.

“However, that would impose a heavy cost in terms of limitations on market freedom and efficiency, as the set of choices from which firms choose managers would be smaller,” Mr Michelson said.

“The possible resulting deterioration of quality in the public sector would, paradoxically, lead to an erosion of public trust in the Public Service.”

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‘More efficiency’ with fixed-term contracts

Estonian State Secretary, Taimar Peterkop has called for a significant expansion of the number of Public Servants employed on fixed-term contracts.

In his feedback to a draft law amending the Civil Service Act, Mr Peterkop (pictured) said middle managers of virtually all Ministries and Public Authorities should be contractors.

 In its current form the Act states that these officials are appointed for an indefinite period, except in exceptional cases.

 Exceptions include the State Secretary himself, as well as the Secretaries and Deputy Secretaries of Ministries and the heads of Government Agencies, all of whom are appointed for five years.

 Mr Peterkop wants the five-year contracts extended to the next level of management, including the heads of individual units within Ministries.

 “Every five years, a competitive process would be held for the position where, of course, the current manager would have the opportunity to run and be appointed if successful,” Mr Peterkop said.

 "The introduction of the fixed-term employment, not only for senior Civil Servants but also for their immediate subordinates, and the establishment of uniform requirements and selection, evaluation and development principles will make the rotation system, which has been relatively modest, more efficient."

 He said he wanted to change the situation where the middle manager was sitting in place for decades and the arrival of new and perhaps more capable people was being blocked.

 There are currently, 217 middle managers working in the Ministries, whose average length of service in the same position is 4.5 years. However, 66 middle managers have held one position for more than five years, and 28 for more than 10 years.

 The number of middle managers working in the same position for a long time has decreased in recent years due to the restructuring of four Government Agencies.

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