Public sector workforce to feel the pinch as Brown takes on global challenge

Gordon Brownís 10th pre-Budget report as Chancellor aims to equip the UK to cope with global competition and the threat of climate change. But while employers in all sectors will welcome the Chancellorís ambitions for world class skills and innovation, public sector management faces a major task in delivering even tougher efficiency savings, according to Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development.

Dr Philpott said:
The Chancellor has set out his stall for when he leaves Number 11 to become Prime Minister. He can rightly claim to have recorded a decade of success on economic stability, jobs and fairness, though despite assertive rhetoric he must be disappointed that previous rafts of measures designed to boost UK productivity have delivered relatively little.

In taking on the challenge posed by the ever growing economic strength of China and India, Mr Brown is to be congratulated on making a start at implementing the recommendations of the Leitch Review of skills and promising major extensions of both Train to Gain and apprenticeships. Appointing former CBI Director General Sir Digby Jones to spearhead the skills drive is a particularly smart move - though Sir Digby should immediately caution the Chancellor against the threat of compulsion if fewer employers than hoped for decide to ítake the pledgeí and commit to helping less skilled staff obtain basic qualifications. Sir Digby should also ensure that improving UK management and leadership skills figure high on his promotional agenda - unless we address the still relatively poor people management practices of UK plc world class skills wonít easily translate into world class performance.

Given a lack of thorough detail in the pre-Budget report we have to take the Chancellorís word that the government has already achieved more than half the efficiency savings set out in the Gershon review. What is clear, however, is that in order to meet his plans for future large scale investment in key areas like education and skills without a deterioration in the underlying state of the public services, the drive for further efficiencies is set to intensify from next year onward. Annual efficiency savings of at least 3% across Whitehall and local government and real cuts of 5% per year in public sector administration will not come without pain.

The likelihood of further job cuts in public administration, combined with what will amount to a squeeze in real living standards for many public sector workers, will intensify stresses and strains that are already evident within the public sector workforce. Managing these efficiency savings whilst preserving staff morale and boosting levels of performance will be as big a challenge for public sector organisations as the competitive challenge those in the private sector face in the global economy. This makes it even more vital that public sector managers implement state of the art people management practices of the kind needed to engage and motivate staff in the coming era of rapid change.