July | 2010 | attractorconsulting.com

You are browsing the archive for 2010 July.

Devolution or Privatisation?

July 29, 2010 in Public Services, Shared Services and Outsourcing

It is possible the UK is about to witness the decline and fall of the 20th Century’s monolithic, centralised state institutions. But trying to read the early actions of the coalition government is difficult and it’s too soon to tell how the new world of public service, created by the government’s actions, will look.

One might be forgiven for thinking a lack of vision is creating the uncertainty. In response, it might be argued the competing pressures and visions within the Labour party resulted in a lack of consistency in purpose and action (if not motivation).

It’s only fair to remember the coalition needs to craft solutions reflecting the new partnership …. a more formal process than takes place inside single party “broad church” governments.

So, as the coalition begins to shape things in their own image, what should we expect?

For the coalition parties, links between localism, pluralism and liberalism are deep and profound. Big, centralised government is broadly rejected. From the actions that have been taken by the new government, the coming changes may be more radical than anyone expects. Evidence of this can be seen in -

the “Big Society” contrasted with Big Government with it’s echoes of “Total Politics“, coined by Greg Clark and James Mather and used by Ian Duncan Smith to attack the New Labour project,
the abolition of Strategic Health Authorities and Primary Care Trusts and nascent plans to devolve spending to General Practitioners,
the challenge of producing plans for 25% to 40% cuts in central government departments,
the removal of regional planning controls,
action to consolidate the number of arms length bodies,
the moves to create elected police authorities.

So how will public services look in five years time? Read the rest of this entry →

Tags: centralisation, devolution, efficiency and reform, outsourcing, privatisation, public sector, targets, total place No Comments »

by Attractor

Localism, Reform, Innovation and Transformation

July 26, 2010 in Leading and Managing Results, Public Services

With the UK public sector under huge financial pressure, government faces calls to protect resources for front-line services.

A recent Telegraph article provides valuable insight on ways to change how public services are run (in this case police forces) to provide effective outcomes with far less resources.

The report in question, from an ex-UK policeman now serving in Canada, seems to offer clear examples of how changes is working practice could yield significant savings without a loss of service quality.

According to figures used in the article, Alberta spends £150 for every citizen and employs one person for every 526 people served, while Manchester spends £276 for every citizen and employs one person for every 181 people served. Given the recent comments about using civilians in the police workforce, it is also interesting to note 37% of the police workforce in Manchester are civilians compared to only 26% in Alberta.

Even taking into account the difference in levels of violent crime (Manchester has 16 per 1,000 people while Alberta has only 10 per 1,000) comparing the two sets of figures throws up striking productivity differences in the two. So why is Canada more effiicenct?

Comparing Greater Manchester in the UK with Alberta, Edmonton, the key differences in policing practice in UK and Canada would seem to be -

less bureaucracy - in relation to arrangements for arrest, custody, taking statements, accessing legal representatives and making charging – resulting in greater front line efficiency and fewer administrative staff,
active front-line policing- the UK’s Chief Inspector of Constabulary recently reported as few as six per cent of warranted officers might be available at any one time to deal with crime. In Alberta everyone is hands-on, almost all the time – even senior officers,
greater use of technology – wireless laptops in vehicles displaying calls waiting for police attention and how long they have been waiting – plus real-time crime maps, incidents, methods and suspects,
local accountability- Alberta police are financed by local taxpayers and respond to their priorities, not those of central government.

The message from overseas suggests that removing the layers of management, measurement and compliance activity bearing down on front line services, allowing freedom for innovation and investment decisions together with local accountability can generate really transformative results.

It is through effective innovation and investment that front-line services are best protected, not by ringfencing budgets supporting out of date or ineffective working practices.

Tags: budgets, efficiency and reform, localism, police, productivity, public sector No Comments »

by Attractor

Shared Services – For and Against

July 23, 2010 in Corporate Services, Public Services, Shared Services and Outsourcing

Image : jinho.jung, Flickr

When organisations refer to their “shared services” projects, they are not all talking about identical solutions. Different experiences and variations in savings will reflect the nature of changes being made and the approach to implementation.

For some organisations, implementing shared services brings together a number of activities which were managed within local business units – creating a single, centralised solution.

Instead of each business unit controlling its own local service, they all share a single internal service delivered from a central location.

For other organisations shared services involves seeking to buy-in services from another corporate body – perhaps a parent organisation, a similar neighbour or a commercial partner. In this case, challenges of reorganising services and delivering service levels are multiplied by issues of finding the right partners, procurement and contracts.

In some very ambitous cases, organisations might be seeking to both centralise and buy-in services in one swift act which makes projects especially challenging. In all cases the service outcomes will be judged on the basis of how they work for customers and how much they cost. These judgements will be determined by how they set up their business and approach investment and improvement action. Read the rest of this entry →

Tags: corporate services, efficiency, efficiency and reform, productivity, public sector, QIPP, shared services No Comments »

by Attractor

Payroll Fraud in Government

July 23, 2010 in Pay and Reward, Workforce Management

A payroll administrator working for government departments was recently sentenced to two years in prison after defrauding the taxpayer of over £137k. The fraud had commenced in July 2005 with the Department of Health, on the payroll of the Mental Health Review Tribunals and continued until March 2008 after payroll had transferred to the Ministry of Justice, with the administrator keeping his job.

Based on the amount of money taken over the period, and the fact that expense payments would have been tax free the crooked scheme was providing the fraudster with the equivalent of income of around £74k per year.

The fraud involved a range of techniques including the creation of false receipts, payment to bank accounts the administrator had set up using false documents, alterations to the computer records for genuine recipients’ bank details and claims attributed to an employee who had died several years earlier.

The case was handled by the NHS Counter Fraud Service – which covers all kinds of fraud against the Department of Health and NHS.

In the video post at the Journal of Accountancy website, Joseph T Wells, a certified fraud examiner, has a clear and simple message

“People who beleive they will be caught commiting fraud are less likely to do it”

He highlights the key actions which organisations can take to deter and prevent fraud -

clear communication to all employees about what constitutes fraud
mechanisms for people to seek advice about possibly unethical practices
access to a reporting hotline which allows anonymous reporting of concerns
common sense internal controls (e.g. physical safeguards, separation of duties)
an increased perception of detection through management and audit activity
including regular fraud risk assessments

Tags: controls, department of health, fraud, ministry of justice, payroll No Comments »

by Attractor

Transformation and Privatisation

July 19, 2010 in Leading and Managing Results, Public Services, Shared Services and Outsourcing

Photo: Sam and Ian, Flickr

The Guardian’s recent stories on privatisation, the opportunities for private health providers and private sector job opportunities for key civil servants should surprise nobody.

It’s hard to accept suggestions the implications of “The Big Society” could not have been foreseen.

People preparing to cast their votes only had to look to see evidence of a different approach to government.

Over the next five years, the coalition government will change the way public services are delivered – using a wide range of providers, public, private and social enterprises.

It may be fair to criticise politicians for a failure of openness during the 2010 general election campaign, but there were plenty of signs of what was coming.

The Conservative party preference for private provision is historic, pre-dating this financial crisis. The credit crunch seems only to have raised the bar as more stories highlighted how they wished to transform the UK – Channel 4 (2001) the NHS (2009), government bureacracies (2009), delivering public services (2009), municipal entrepreneurship (2009) and the Post Office (2010). Even the Liberal Democrats are no strangers to the idea of using private sector organisations in areas like the Royal Mint.

It is hard to envision, however attractive, mutual, social enterprise and voluntary sector providers matching the potentially deep pockets of established rival PLCs. If solutions can be found though, increasing diversity and choice can only be positive.

The coalition, with a need for huge savings, is naturally going to look to the private sector for solutions. The indications are the Labour government was considering similar plans – though they would certainly have been less wide-ranging and ambitious. Read the rest of this entry →

Tags: efficiency, efficiency and reform, privatisation, public sector 2 Comments »

by Attractor

Can Performance Review be Effective?

July 16, 2010 in Leading and Managing Results, Workforce Management

Photo: Oude School, Flickr

The HR blogsite, KnowHR recently drew attention to an interview with UCLA Business Professor, Samual Culbert, reported on the NPR website.Culbert’s ideas were set out in an article in The Wall Street Journal and in a recent book “Get Rid of the Performance Review!”.

He calls the Performance Review a ”corporate sham is one of the most insidious, most damaging, and yet most ubiquitous of corporate activities.”

He suggests periodic reviews help neither employee nor employer as they fail to promote candid discussions about problems and solutions. Instead workers talk about successes and bosses retrospectively write reports which justify the level of pay award they want to pay.

In reality Culbert’s message tells us more about how managers’ behaviour impacts on the workforce, instilling fear through intimidation and deliberately manipulating performance reviews to preserve personal authority and domination in relationships.

Such organisations certainly exist, but Attractor keeps a very wide berth from them – instead working with teams which are, at the very least far “less malign”.

In describing managers’ behaviour, Culbert highlights the point few managers obtain their role due to “their keen understanding of people”, instead basing action “on self-serving logic and clumsy attempts at control”.

Culbert’s suggests removing performance reviews would facilitate a more straight-talking relationship involving a “performance preview” in which managers “just tell the employee what he or she needs to do to become more effective”. In reality then, the “performance preview” is really an effective appraisal and development review – underpinned by a positive working relationship, good leadership and management.

Top-performing leaders build working relationships which foster trust, engagement and respect within the workplace – horizontally and vertically. While the boss might have to make final decisions, there is plenty to learn from the skills, experience and perspectives of team members at all levels.

Encouraging interaction, sharing diverse and contrary views requires stout-hearted speaking and listening which – Culbert is right to point out – is not as common in the workplace as it should be. Read the rest of this entry →

Tags: appraisal, culture, leaders, leadership, management, performance, poor performance No Comments »

by Attractor

Outsourcing: Are HR and Payroll So Different?

July 12, 2010 in Corporate Services, Shared Services and Outsourcing

Image : Tychay, Flickr

Over the last decade, it’s become increasingly clear the transactional side of Human Resources and the Payroll service are two sides of the same coin.

The HR team helps managers source and deploy people into effective roles on the right employment terms. The Payroll team implement those terms accurately and in accordance with tax legislation.

Completing the cycle, the Payroll Team provide invaluable workforce and cost information which cab support strategy, planning and policy review.

Both teams help manage the workforce and support the reduction of associated risks while removing burdens from front line management, allowing them to focus on operations and team leadership.

In the article “The Other”, SystematicHR described the highly structured environment payroll inhabits and the contrast with the “flexibility” which managers and HR departments so highly value. Working with both teams regularly, Attractor recognises the description and accepts there are elements of truth in the common stereotypes.

There is something else which, until recently at least, distiguished the two departments.

In the UK, organisations have traditionally been happy to outsource payroll transactions to a commercial partner. They recognise the work needs technical skills but can be labour intensive. They consider it safer to pass risks to a specialist body who guarantees compliance and, hopefully, generates economies of scale.

Some perceive the reluctance of organisations to outsource HR as protectionism or empire-building by the management team. HR is often considered more central to business operations, making it less attractive to outsource. Fears often arise over “losing control” of key issues on staff appointments and difficult people management issues. With HR supporting action by senior and line managers, it isn’t possible to transfer “compliance risk” in the same way. Read the rest of this entry →

Tags: efficiency, HR, human resources, outsourcing, payroll, risks, shared service 2 Comments »

by Attractor

Is Top Team Pay Unfair?

July 9, 2010 in Pay and Reward, Public Services

Photo: Covilha, Flickr

With the government proposing a cap on public sector pay, it can’t be helpful to see reports that, according to reward consultancy MM&K, the pay for private sector Chief Executives has continued to grow while share prices have dropped.

People Management report the total reward for chief executives in the FTSE100 is now £3.1 million a year – consigning to mediocrity the comparisons between public sector managers and the Prime Minister’s salary at a mere £150k.

During a “time of austerity” with public servants experiencing a pay freeze, senior jobholders seeing pay cuts, it is challenging to hear that FTSE100 chief executives pay is up 5% on 2008 figures – at a time when the private sector has been through so much “pain”.

The median 2009 salary increase for this group was 4% and total pay has almost quadrupled since 1998. A quarter of FTSE100 companies raised CEO pay by over 7%, though about a third had no increase or took a reduced salary. The impact on senior managers pay in both the private and public sector cannot be ignored.

During the Radio 4 programme “The Moral Maze”, “Greed, Reward, Worth”, Claire Fox, from the New Economics Foundation, highlighted the unfairness of such high pay, summarising the report A Bit Rich, which challenges the link beween societal value and reward. The HR blog HR Case Studies suggested people reading the report would be either inspired or enraged.

Drawing attention to some very challenging evidence about the impact of work, the report suggests hospital cleaners, waste recycling workers and childcare workers add significant societal value while investment bankers, tax accountants and advertising executives destroy it. The report highlights the discrepancies between this societal value and levels of earnings.

The report could be criticised for using perfect hindsight in the way it describes the destruction of societal value caused by the banking sector. More relevant to the debate on pay is a lack of any discussion about labour markets. In a market economy, people can command what other people are prepared to pay for access to their skills and experience. Broadly it’s the scarcity of skills and experience which drives earnings rather than any careful calculation of “societal value”. Read the rest of this entry →

Tags: capping pay, CEO pay, MM&K, pay, pay freeze, public sector pay, reward No Comments »

by Attractor

Where to Cut?

July 7, 2010 in Leading and Managing Results, Public Services

Under the last government, the public sector experienced more than a decade of top-down, target-driven, centralised change.

With massive investments in public services, strides were made on improving infrastructure and service levels in health and education.

But, with money and targets arriving thick and fast, the capacity for change was overwhelmed and efficiency declined.

It was easy to predict a search for productivity was coming – but the financial crisis turned this into a massive shock – the equivalent of putting your car into reverse direct from fourth gear.

In the middle of 2010, the anticipation of cuts in UK public services is creating at atmosphere where any public servant whose role might be considered “not vital” will be thinking about career options. With the economy at a very early stage of a slow recovery, prospects don’t look good.

But what is “vital”?

An opinion poll for the Local Government Association looked at where people thought spending should be cut and protected, showing where people preferred deicions to be made about spending in their local area -

62% wanted local councillors to decide,
18 % backed MPs
2% said officials in quangos

Respondents wanted NHS managers, quangos and overseas aid to be cut while doctors, nurses and other hospital staff, police, schools, fire services and care for the elderly by social services should be protected. Those sentiments are unsurprising and calling for reductions in the cost of administration, bureaucracy and management is all too easy.

In the coming months we will see suggestions that any reduction in the number of police officers, nurses, doctors etc would be a disaster. While nobody wants to see front-line services being reduced, in fact, taking a view about what is “vital” is less straightforward than most tabloid papers might suggest. Read the rest of this entry →

Tags: cuts, efficiency, efficiency and reform, OEP, public sector No Comments »

attractorconsulting.com

You are browsing the archive for 2010 July.

Devolution or Privatisation?

Localism, Reform, Innovation and Transformation

Shared Services – For and Against

Payroll Fraud in Government

Transformation and Privatisation

Can Performance Review be Effective?

Outsourcing: Are HR and Payroll So Different?

Is Top Team Pay Unfair?

Where to Cut?

Reflections

Attractor Tweets

Vince Lammas Tweets