Apprenticeship Levy - Keeping it local

With an ageing public sector workforce, we should be encouraging apprenticeships by passing the funding from the Apprenticeship Levy onto those public service employers who deliver quality apprenticeships.

 

This is Scottish Apprenticeship Week 2017, which focuses on the benefits apprenticeships bring to businesses, individuals and the Scottish economy - an opportunity to encourage more employers to offer quality apprenticeships. Events and activities involving employers, apprentices, colleges, local authorities and training providers are taking place across the country to celebrate the success of apprenticeships.

 

The UK wide Apprenticeship Levy is to be implemented from April 2017 and collected by the HMRC from large employers. Employers in England, including public sector bodies, will be able to directly access funding. However, in Scotland the money goes into the Scottish Government's budget - around £230m per annum.

 

Public sector employers in Scotland are important providers of quality apprenticeships. In a recent UNISON Scotland survey 81 per cent of apprentices described their training as excellent or good, even though almost half (46%) felt there should be a greater degree of off-the-job training. That is not to say there are not issues that need to be addressed. More than one in three (35%) rated their chances of achieving a job upon completion of their course as ‘don’t know’ or ‘unlikely’. Gender segregation also remains a huge issue. While the percentage of women employed in apprenticeships varied across councils, a strong pattern exists of women taking up apprenticeships in administration or care, while being almost completely absent from ‘craft’ apprenticeships.

 

Councils spend at least £25m on providing hundreds of valuable opportunities for young people such as modern apprenticeships, craft apprenticeships, graduate trainees, probationer teachers, formal work experience as employers that all contribute to the Developing Scotland’s Young Workforce (DYW) Programme, jointly led by the Scottish Government and local government as partners.  This major programme aims to reduce youth unemployment by 40 per cent by 2021.

 

However, in Scotland the apprenticeship levy resource is not being passed on to these providers. COSLA has estimated that, based on last year’s pay bill for councils, the Apprenticeship Levy could potentially cost local authorities £24m as employers. That could rise to almost £50m across the public sector in Scotland.

 

Originally, local government understood that it would have its Levy funding returned in full in the next financial year by the Scottish Government.  Then councils were told that they were not to receive any of their own funding back from the Scottish Government. This decision undermines the DYW Programme and efforts to reduce youth unemployment in Scotland by putting in danger the future of valuable local initiatives provided by councils and other public service employers for young people. 

 

The bottom line is that apprentice recruitment is not happening at a sufficient rate to either: alter the ageing demographic of the workforce in public services; or replace the numbers leaving the workforce through voluntary redundancy or early retirement.

 

By centralising funding, the Scottish Government is discouraging public service employers from taking on apprentices. It is time to think again and return this funding to those local employers who want to develop quality apprenticeship programmes.

Public sector top of the league for consumer trust

Scotland’s public sector water industry rates the “most trusted” sector among Scottish consumers at 68%. In contrast, private sector energy is one of the “least trusted” at 36%.


This is set out in a report by the consumer group Which? on consumer attitudes in Scotland. The report shows some interesting contrasts between the views of consumers north and south of the border.


Public spending cuts topped consumer concerns in both tables, but the concern was much greater in Scotland at 74%, compared to 62% elsewhere in the UK.


Energy prices are a bigger concern in Scotland at 67%, compared to 56% in the rest of the UK. However, 68% have not switched supplier in the past five years and only a quarter who considered it actually switched. Most though the price difference wasn’t worth the hassle.


Nine out of the ten most financially distressed constituencies in Scotland are in Glasgow. Western Isles is the least distressed.


Only 10% of consumers had a problem with public services in the last two years.


So good is public sector water delivery that Scottish Water’s expertise is in demand worldwide. The public corporation’s international arm has generated more than £8 million of turnover, in total, since it was established in 2012. It recorded a £200,000 profit last year.


Maybe public ownership is the right approach for other utilities!

Plenty of vision in government plan, but delivery is more challenging

The Scottish Government's plan for the coming year is light on legislation, but there is more meat in the administrative sections, if it can move from process into action.

I outlined the key elements of the Scottish Government's 'Plan for Scotland 2016/17' in a briefing yesterday. So let's step back and look at the plan overall.

The main purpose of the plan is to set out the government's legislative programme - it's the Scottish version of the Queen's Speech. There are 14 Bills, but most of them are technical or dealing with specific issues like Domestic Abuse. They are also largely uncontroversial and even Bills on big issues like social security and child poverty are about the process of how the government will administer new powers.

The one exception is the Air Passenger Duty Bill. When this tax is devolved, the government wants to halve it with the longer term aim of abolishing it. This plan makes a mockery of the government's climate change commitments by dumping tons of carbon emissions into the atmosphere. It is also unaffordable in the current budget and gives a tax cut to the wealthiest in society - 50% of Scots don't even use air travel.

Other promised legislation that campaign groups will want to build on, like the Climate Change Bill and Good Food Nation Bill, have been pencilled in for later in the parliament. Overall, you wonder if the legislative programme would have been more adventurous if the SNP had secured a parliamentary majority in May. Minority government's tend to push more into administrative action, rather than risking parliamentary votes. I suspect the May draft of this plan looked somewhat different!

There are two big challenges in the administrative sections.

The first is finance. Austerity isn't going away and the next budget will have to set out taxation as well as spending plans. This plan severely limits the government's room for manoeuvre by promising no change in the basic rate of income tax. There are still plenty of opportunities to increase revenue on the fringes, but only the basic rate provides enough income to really challenge austerity and tackle the issues identified in the plan.

The second is public service reform. There is a whole section in the plan devoted to how the government wants to engage communities and decentralise. However, the actual measures are pretty modest, like 1% community budgets. On the other hand, we have centralising measures like the regionalisation of education and the ring fencing of council tax. That's before the review of health boards and councils gets under way.

There are a number of measures in the plan that could be truly transformational. The main one is increasing early years provision. Doubling the provision with 200 new centres and 20,000 extra staff is potentially huge. The problem is that £500m doesn't meet the cost, unless the plan is to do it on the cheap, with low paid staff rather than properly qualified early year's professionals.

Which leads me neatly into social care. It was precisely a race to the bottom in pay and conditions that got us into the mess we are in today. There are new resources to address this, but implementation is a bit of a guddle. Creating a fairly paid, properly trained workforce that has the time to care is absolutely crucial to getting patients out of expensive acute hospital beds. This is an opportunity to put some meat on the worthy Labour Market Strategy by creating sectoral collective bargaining structures for the care sector. This would get all the stakeholders working together to deliver the agreed outcomes.

This is crucial to another big element of the plan - shifting NHS resources into community services. This is absolutely the right policy, but very difficult politically. The slightest hint of a hospital closure or even downsizing creates a local storm. The problem for the government is that they came to power on the back of this very type of political protest. Now their financial plans for NHS Scotland look very challenging unless they can free up acute resources.

Finally, there are some other positives in the plan. The police officer numbers target has been dropped and replaced by the ‘right mix and numbers of officers and staff’. It will take some time to repair the damage and get back to a balanced workforce, but it’s a start.

There is also a commitment to improve value and reduce the cost to the public purse of PPP schemes, including ending contracts ‘where possible and appropriate’. The NHS and some local authorities are starting to get into gear on this after UNISON’s ‘Combating Austerity’ report highlighted potential savings.

Equally, the section on inclusive growth and fair work, demonstrates a clear understanding of how unequal societies damage growth. This section includes measures to mitigate the Trade Union Act and support for learning. You wouldn’t see this infographic in a UK government publication!

So, the limited legislative programme reflects the challenges of minority government. However, government doesn’t always need to legislate to achieve its policy goals. There is plenty of positive vision and process in this plan – delivery is as always more challenging.

The Cuts Don't Work

Austerity affects everyone in Scotland, but it’s the most vulnerable who are hardest hit, as services are cut back, jobs go, pay is cut and living standards fall.

Today, UNISON Scotland has published a report, ‘The Cuts Don’t Work: The impact of ‘austerity’ cuts on Scotland’s public services’ – showing what’s really happening to public services across the country.

The report highlights that Scotland’s budget is being slashed by more than £6 billion in real terms. Around 50,000 public sector jobs have already gone with a further 60,000 expected jobs expected to go over the next 5 years. And local authorities have little choice but to put up charges for services like school meals, burials and cremations, day care and home care rates as they attempt to balance the books as a result of the ongoing council tax freeze.

As you would expect, there is plenty of analysis of the numbers, although we have illustrated these using charts and info graphics. In addition, we use our members’ experiences of the impact of cuts – telling their own stories in their own words.

They tell a story of how the cuts are piling on pressure to overworked, underpaid staff across Scotland including in hospitals, schools, police support staff, colleges and the voluntary sector and it is bringing public services to breaking point. Some of the comments included:

"If I was given the time and energy to apply to the families that I work with I could change their lives forever, but currently we stick plasters on wounds that need stitches." Social worker

"Growing workloads are a real problem. We often have to work through breaks, or work late, just to do the job properly and deliver the right level of care." Community midwife

"It’s getting worse. I don’t know where it’s going to end, no one cares about the patient or client anymore." Home carer

This report shows the damage cuts do to local communities, local economies and the fabric of our society. They are the result of decisions and choices made at every level of Government; local, Scottish and UK.

There is a better way because we can afford public services. Cuts are neither necessary nor inevitable and Scotland could have the properly funded and accountable public services our society needs.

 

 

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Pressures on public spending in Scotland

The latest report from Audit Scotland highlights the significant financial challenges faced by Scotland’s public sector.

 

The Scottish budget has fallen 9%, in real terms, from £31.9bn in 2009/10 to £28.9bn in 2014/15 and is expected to reduce further. Audit Scotland believes public bodies have coped well so far, but face increasingly difficult choices in reducing spending while maintaining service standards and meeting rising demand. There is limited evidence of longer-term financial planning. Plans generally focus on the short to medium term up to five years.

The two main components of the budget, revenue and capital, show different trends since 2009/10: The revenue budget has fallen by £1.8 billion (6%) to £26 billion in 2014/15. The capital budget has fallen by £1.2 billion (29%) to £2.9 billion in 2014/15. Although the overall trend shows a decline, this budget has increased by 15% since 2012/13 in line with the Scottish Government’s policy to increase capital investment.

This chart illustrates the shift from revenue to capital.

The Scottish Government also has a substantial PPP programme, not something they are keen to highlight. As UNISON has repeatedly pointed out, these projects create longer-term financial commitments and to reduce flexibility in how future revenue budgets can be used. This report notes that since 2010, contracts for projects with a value of around £1.7 billion have been agreed using revenue-financed methods with a further £1.7 billion planned for future years.

 

The much vaunted ‘ring fencing’ of health spending has never quite lived up to the headline, largely due to above inflation costs in this sector. By 2015/16 even this protection goes, with the health budget reducing by £73 million (1%). Area health board budgets are increasing by 1%, while special health boards are cut by 1% and central spending is cut by 3%.

 

Local government has taken the brunt of the cuts in Scotland since the crash. The Scottish Government provides over 80% of the funding for local government. The rest comes from council tax and charges. The Scottish Government’s budget for local government will decrease by £200 million from £7.7 billion to £7.5 billion, a cut of 3%.

 

The pressures on public bodies are not simply financial. This info graphic illustrates the ongoing pressures very well.

The second part of the report makes recommendations as to how public bodies might mitigate the pressures. More data, focusing budgeting on priorities, a long term approach to financial planning and greater scrutiny are all very worthwhile. However, they are at best a sticking plaster on a pressure cooker, and that never ends well.

 

 

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Great workplaces address absence better than systems

The best approach to tackling absence is to create great workplaces to work in - not rigid management systems and targets.

Today, I was speaking at a MacKay Hannah conference on ‘Tackling Absenteeism in the Public Sector in Scotland: Prevention and Health Promotion’.

Angela Cullen from Audit Scotland set the scene from their published report on Scotland's public sector workforce. This showed that the workforce has been cut by 7% since the crash, down to around one in five of the total workforce. Council staff have taken the brunt of cuts. The workforce is ageing significantly with young people the biggest losers, down by 25%. Over one third of staff are over 50 and that is the biggest growth area with potential skill and knowledge risks for public services as they come closer to retirement. They have extracted data on sickness absence from their recent report into a useful new publication on their website

Fred Best from Work 4 Wellbeing made the business case for taking measures to improve wellbeing at work. More than a glossy document and a bowl of fruit! Poor data is a problem with 18% of sickness absence reported as 'other' due to IT system limitations. A key message was the cost of presenteeism that can cost 50% more than absence - £105bn in 2010. Workplace conflict costs UK business £33bn per year, taking 20% of leadership time and losing 370m working days. Investment in wellbeing can save £4 for every £1 spent. Behind these statistics is the real human cost of ill health.

Roddy Duncan from the office of the Chief Medical Officer outlined Scottish Government initiatives to create healthy working lives in a very challenging environment - ageing workforce and austerity cuts. Long term absence is a particular issue with 51% of long term absentees in Scotland being disabled. The healthy work strategy is based on premise that work is good for health and workplaces should promote health and wellbeing of the workforce.

Dame Carol Black's independent review of sickness absence was referenced by several speakers. That emphasises that worklessness is harmful for most people. Equally useful is the work of The Scottish Centre for Healthy Working Lives.

My presentation was on the reality of the ‘sickie culture’ in the Public Sector: policies, support and management. I started by debunking some of the myths about sickness absence in the public sector. It may be cliché that the only certainties in life are death and taxes, but there are others. For me, one is the Daily Mail asking me to respond to the latest CBI claim that public sector workers have a 'sickie culture'.

The main response to the headline data is that the two sectors are not comparable workforces. The public sector is an older workforce with more women and with major occupational differences. For example, staff in the care sector are 45% more likely to be sick. Public sector staff also tend to work in larger organisations with sick pay agreements and better recording systems. One consequence is that public sector staff have more long term sickness absence but less short term absence than in the private sector. Overall, public v private is simply irrelevant to the debate, you need to look at other factors.

We do know that there is greater and growing presenteeism in public sector. A CIPD survey showed 39% in the public sector compared to 26% in the private sector. Unpaid overtime is also more common in the public sector - 1 in 4 compared to 1 in 6 workers in the private sector. All of this is reinforced in a UNISON Scotland survey we published last year.

Instead of a puerile public v private debate we need to focus on positive absence management. This is my list of measures:

• Agreed absence management policies with proper training
• Regular reviews of data at safety Committees
• Less reliance on formulas and triggers
• Measures to facilitate and promote employee health
• Involvement of quality, independent, occupational health professionals
• Minimise workplace stress
• Employee assistance programmes for personal or workplace problems.
• Maintain contact during long-term sickness absence
• Structured return-to-work plan with adequate adjustments and support.

There was some discussion about the new government occupational health assessment scheme. This is right in principle, but I suspect it will become an ATOS style tick box exercise. Sickness absence rules and targets in the public sector can be very similar - chasing short term solutions at the expense of more sustainable long-term solutions. We also need to recognise the impact of later retirement ages on particular occupational groups.

My main message was that if you are serious about tackling absence you need to focus on making workplaces great places to work in. The speaker from Investors in People described this as the soft stuff, but in their view still absolutely vital. A friendly, varied, fair and supportive working environment is more effective than any set of absence management rules.

Private Sector Fails Again

The recent failures and subsequent closure of the private Hamilton School in Aberdeen show the important role that public services play in protecting us all. While many who opt for private over public provision don’t think they use the public sector its clear that their taxes turn out to be great value when things go wrong.

Investigations by the Care Inspectorate, Police Scotland and Education Scotland uncovered serious risks to children at the school which led to its immediate closure. Not only have these public bodies stepped in and removed the children from a risky situation, the local authority has taken the costly step of opening a building and providing teachers for those children to ensure that there is as little disruption to their education as possible.

The report from Education Scotland is breathtaking and concludes that:

“Due to the extreme and serious management failings, along with the endemic, negative ethos within the school, HM Inspectors are not confident that children at the Hamilton School and Nursery are safe. In addition, the wellbeing and welfare of staff is of major concern.
As a result of the on-going and negative impact of ineffective leadership and in the absence of open, fair and accountable arrangements for governance, The Hamilton School and Nursery does not have the capacity to make the wide-ranging and urgent improvements necessary to meet the needs of children and keep them safe and well-looked after.
HM Inspectors recommend that the Registrar for Independent Schools takes immediate and serious action with regard to The Hamilton School including reviewing its registration as an Independent School.”

The myth of the efficiency and effectiveness of private delivery is well and truly quashed.

Where the private sector fails to deliver essential services the public sector has to step in. This is why everyone must pay a fair share of taxes. You never know when you may need to call on public services, even when you explicitly opt out and choose a private provider, you may like the parents of Hamilton school, be very glad that the public sector came to your rescue.

Scotland's public sector workforce

Today’s Audit Scotland’s report on the public sector workforce shows clearly how it’s the workforce that have taken the brunt of spending cuts.

It shows that staff costs have been cut by over £1bn between 2009/10 and 2011/12. And that doesn’t include the savings from pay restraint.

26,600 whole time equivalent (WTE) posts were cut between March 2009 and March 2013 (7%). Some 9,665 were transferred to arms length bodies outside the public sector. 15,816 WTE left through early departure schemes, although these have been reducing in recent years.  Councils made the biggest reduction (10%) while the NHS had the smallest cut (1%).

The report, if anything, understates the picture because the numbers are converted into WTE. In terms of real people (headcount), 48,700 have gone (excluding the financial sector) since the height of public sector employment just before the financial crash - 5,500 people in the last year alone.

Given the scale of early departure schemes it might be expected that the numbers of older staff would be reducing. However, the report shows that the only age group that is increasing is 50-59yrs, up by 5%. Probably due to recruitment freezes the numbers of younger workers are falling. The chart below illustrates this change.

The report sets out the range of methods used by public bodies to reduce workforce costs with pay restrictions, vacancy management and early retirement the most common. More than a third of councils used compulsory redundancy. There is some criticism of the level of evaluation of early departure schemes.

Future workforce changes are inevitable given the budget cuts to come. The report outlines a range of ways this might be achieved, including considering service delivery cuts. The report recommends better national and local workforce planning.

Overall, the report is a useful description of what has happened to the public service workforce in Scotland. The recommendations are largely sensible, but little more than a sticking plaster over the impact of spending cuts to come.

Commission for Developing Scotland’s Young Workforce

Having had, an admittedly quick, read of the Wood Commission’s interim findings it’s a bit disappointing that there are no recommendations to tackle gender segregation in workplaces and modern apprenticeships or low employment rates for people from BME communities and people with disabilities.

Wood Commission’s interim report offer recommendations on the “educational offer to young people“ with the next session on employer’s support still to come. The recommendations are somewhat predictable, schools and colleges to develop better links with local businesses, and more focus on economic development. Nothing new here: businesses want the public sector to ensure young people are ready to become workers.

What is disappointing though, is that tackling inequality does not appear to be core to the commission’s thinking. The foreword says that “An appropriate title for our school/college vocational initiative would be ""attainment for all", enriching school education with clearer and more open routes for all young people,” but we will have to wait for the second half of the study to find out their the results of their plan to “look to make meaningful recommendations to improve employment outcomes in relation to gender, disability and ethnicity.” The issues Scotland’s people face from discrimination on the grounds of gender, disability and ethnicity should have been central to this report. Allowing discrimination to prevent people reaching their potential and so contributing most to our society and economy should have been to use the jargon “mainstreamed” into the commission’s work.

The fact that the interim report only mentions gender in order to park it for another section does not fill me with much confidence about their recommendations. Equalities issues need to run through all of the work done to improve workforce development; they are not a separate issue.