Andrew O’Brien is Director of Policy and Impact at Demos.
A lot of column inches have been written about Rachel Reeves’s Public Spending Audit.
Understandably, the Conservative Party’s reaction has been to strongly oppose attempts by the new Chancellor to pin all the financial troubles facing the country on the last Conservative government. One of the main attack lines has been that her fiscal black hole is one of her creation caused by her ‘irresponsible’ decision to accept the recommendations of independent pay review bodies.
The Conservative Party is in a fragile state of mind. The perceived role that industrial action (particularly by junior doctors) had in its election defeat is still raw for many. However, whilst there are legitimate criticisms to be made about the Public Spending Audit process, it is simply not credible for Conservatives to argue that increasing public sector pay means compromising on the quality of public services or reducing productivity.
By going overboard in attacking these settlements, the Conservative Party is putting itself on the wrong side of the debate on the future of public services.
Looking around the public sector, there are recruitment and staffing crises everywhere. In the NHS, we have a shortage of around 8,796 doctors across England. Overall, there are over 100,000 vacancies across secondary care in England. This is not a Labour conspiracy, but an urgent challenge highlighted by the Conservative-endorsed NHS Long Term Workforce Plan.
In education, teaching vacancies have also increased and there has been an increase in temporary filled posts. There are also well-documented deficiencies in subject specialisms such as Maths, a barrier which undermined further reforms such as Rishi Sunak’s flagship policy to extend maths education for all children and young people up to 18.
We could add to the list the Armed Forces, prison guards, and social care. If the workforce is the engine of public services, there are worryingly high levels of smoke coming from under the bonnet.
If this was the private sector, Conservatives would say that employers should pay their staff more to recruit and retain them. How can a business thrive if it is permanently short of workers? In the case of the public sector, however, the party has come to associate holding down pay as the only way to drive productivity.
The large awards that have emerged in recent years are the product of a decade of cuts in the public sector pay. At first, George Osborne justified this as a way to bring down the deficit, to return to normal pay awards once the financial situation improved. However, the party has been repeatedly tempted to put tax cuts ahead of fully funding public services which was one of the contributors to its recent defeat where public dissatisfaction with the state of public services was clear.
In the long term, a policy of artificially holding down public sector pay is not a public sector reform agenda.
As Demos has outlined in our recent paper, Liberated Public Services, any serious effort to reform public services requires a fully functioning and motivated workforce. We cannot break down the silos between different services, experiment with new ways to improve outcomes, encourage greater training and expertise if we do not address the workforce challenges. Improving public services through reform and public sector pay deals are not in competition with each other, they are two sides of the same coin.
Squeezing workforce pay is tied up with a flawed concept of public sector productivity. As I have written before, in this model, simply doing the same thing but for slightly less money (the efficiency model) is only one, limited, way of boosting productivity. The better way of productivity is to increase the value of the outcomes delivered, moving up the value chain.
If we stop the patch-and-mend model in the health service and focus on improving health and wellbeing, that will boost productivity considerably and improve public satisfaction. Investing in long-term preventative approaches to public services requires freeing up the public sector workforce from backfilling vacancies and covering for colleagues suffering from burnout.
Moreover, it is pointless to invest in new capital (hospitals, scanners, employment hubs, etc.) unless we have the workforce to utilise them effectively. Higher capital investment is not a substitute for investing in the workforce.
The independent pay awards process was specifically created to provide impartial guidance for politicians. Of course, Ministers ultimately have to decide whether to accept those recommendations and balance them with competing demands. However, if the Conservative Party wants to develop a serious public service reform agenda, it must develop a new approach to public sector pay.
Ahead of the general election victory in 2010, the Conservative Party made great efforts to engage with doctors, teachers, and other public servants who were desperate to reform public services. Michael Gove, for example, balanced challenging the establishment with building bridges with like-minded leaders in the sector. It must rebuild those relationships.
Pay is not the only issue that needs to be resolved, but pay is tied up with concerns about working conditions and the pride of those who commit to working in the public sector. The Conservative Party has a chance to use its time in opposition to develop a bold vision for public service reform, but to do that it must let go of the simplistic idea that holding down pay is a policy of reform.
Andrew O’Brien is Director of Policy and Impact at Demos.
A lot of column inches have been written about Rachel Reeves’s Public Spending Audit.
Understandably, the Conservative Party’s reaction has been to strongly oppose attempts by the new Chancellor to pin all the financial troubles facing the country on the last Conservative government. One of the main attack lines has been that her fiscal black hole is one of her creation caused by her ‘irresponsible’ decision to accept the recommendations of independent pay review bodies.
The Conservative Party is in a fragile state of mind. The perceived role that industrial action (particularly by junior doctors) had in its election defeat is still raw for many. However, whilst there are legitimate criticisms to be made about the Public Spending Audit process, it is simply not credible for Conservatives to argue that increasing public sector pay means compromising on the quality of public services or reducing productivity.
By going overboard in attacking these settlements, the Conservative Party is putting itself on the wrong side of the debate on the future of public services.
Looking around the public sector, there are recruitment and staffing crises everywhere. In the NHS, we have a shortage of around 8,796 doctors across England. Overall, there are over 100,000 vacancies across secondary care in England. This is not a Labour conspiracy, but an urgent challenge highlighted by the Conservative-endorsed NHS Long Term Workforce Plan.
In education, teaching vacancies have also increased and there has been an increase in temporary filled posts. There are also well-documented deficiencies in subject specialisms such as Maths, a barrier which undermined further reforms such as Rishi Sunak’s flagship policy to extend maths education for all children and young people up to 18.
We could add to the list the Armed Forces, prison guards, and social care. If the workforce is the engine of public services, there are worryingly high levels of smoke coming from under the bonnet.
If this was the private sector, Conservatives would say that employers should pay their staff more to recruit and retain them. How can a business thrive if it is permanently short of workers? In the case of the public sector, however, the party has come to associate holding down pay as the only way to drive productivity.
The large awards that have emerged in recent years are the product of a decade of cuts in the public sector pay. At first, George Osborne justified this as a way to bring down the deficit, to return to normal pay awards once the financial situation improved. However, the party has been repeatedly tempted to put tax cuts ahead of fully funding public services which was one of the contributors to its recent defeat where public dissatisfaction with the state of public services was clear.
In the long term, a policy of artificially holding down public sector pay is not a public sector reform agenda.
As Demos has outlined in our recent paper, Liberated Public Services, any serious effort to reform public services requires a fully functioning and motivated workforce. We cannot break down the silos between different services, experiment with new ways to improve outcomes, encourage greater training and expertise if we do not address the workforce challenges. Improving public services through reform and public sector pay deals are not in competition with each other, they are two sides of the same coin.
Squeezing workforce pay is tied up with a flawed concept of public sector productivity. As I have written before, in this model, simply doing the same thing but for slightly less money (the efficiency model) is only one, limited, way of boosting productivity. The better way of productivity is to increase the value of the outcomes delivered, moving up the value chain.
If we stop the patch-and-mend model in the health service and focus on improving health and wellbeing, that will boost productivity considerably and improve public satisfaction. Investing in long-term preventative approaches to public services requires freeing up the public sector workforce from backfilling vacancies and covering for colleagues suffering from burnout.
Moreover, it is pointless to invest in new capital (hospitals, scanners, employment hubs, etc.) unless we have the workforce to utilise them effectively. Higher capital investment is not a substitute for investing in the workforce.
The independent pay awards process was specifically created to provide impartial guidance for politicians. Of course, Ministers ultimately have to decide whether to accept those recommendations and balance them with competing demands. However, if the Conservative Party wants to develop a serious public service reform agenda, it must develop a new approach to public sector pay.
Ahead of the general election victory in 2010, the Conservative Party made great efforts to engage with doctors, teachers, and other public servants who were desperate to reform public services. Michael Gove, for example, balanced challenging the establishment with building bridges with like-minded leaders in the sector. It must rebuild those relationships.
Pay is not the only issue that needs to be resolved, but pay is tied up with concerns about working conditions and the pride of those who commit to working in the public sector. The Conservative Party has a chance to use its time in opposition to develop a bold vision for public service reform, but to do that it must let go of the simplistic idea that holding down pay is a policy of reform.