A stark picture of how the proposed public expenditure cuts will impact on the recruitment industry was painted at the REC’s Public Sector Resourcing Summit attended by more than 170 delegates yesterday.
In the week in which both Prime Minister David Cameron and Chancellor George Osborne spelled out their planned programmes of financial restraint, the REC summit offered members, HR professionals and employers a chance to hear from experts what the changes will mean to the recruitment industry.
The £6.2 billion reduction in public sector spending already announced includes freezes on recruitment and the use of agency staff. These were explained as being just the tip of the iceberg as further measures are expected in the emergency budget on June 22.
Against this background, the summit looked at partnerships between public sector employers and recruitment businesses over the next five years to minimise the pain and maximise the opportunities.
The REC has highlighted in its public sector campaign of which the summit was the focal point, the three key reasons why the recruitment industry continues to have an important role to play :- the need for new leadership talent; the use of specialist contractors and interim managers to effect the changes and for a flexible workforce to be maintained throughout.
The reality of the current situation was spelled out by Sir Peter Gershon, the Government’s efficiency adviser, who re-emphasised that the national debt was currently £772 billion.
In his keynote speech, he said: “There will be some very tough challenges ahead in the Government’s Spending Review this autumn with reductions of up to 20 per cent in some areas of public expenditure to be expected.”
He said the way forward was to adopt more holistic approaches to procurement along with different delivery mechanisms and increased use of the private and third sectors.
When asked about the future use of agency workers, he said: “Clearly, parts of the public sector provision of frontline services depend heavily on agency and temporary staff. I do not think you can transform the situation overnight or in the medium term.”
Reductions of up to 30 per cent in local government budgets were forecast by Dean Shoesmith, President of the Public Sector People Managers’ Association along with a 20 to 25 per cent cut in headcounts.
Dr David Halpern, the Institute of Government’s Director of Research, described the public sector’s “silo” structure as being a major constraint on transforming public services and cited examples of how both Canada and Sweden have turned around their national deficits through efficiency reviews and other mechanisms.
Jackie Orme, Chief Executive of the Chartered Institute of Personnel and Development (CIPD) said the emphasis now was no longer on volume but on adding more value especially when seeking the new leadership talent for the public sector.
A need for a rebalance in the economy driven by private sector growth was called for by David Frost, Director General of the British Chambers of Commerce (BCC) and also greater parity between public and private sector pay.
In conclusion at the end of the summit, Kevin Green, the REC’s Chief Executive said:
“The views expressed today confirm that we’re heading for a period of fundamental change. There is a real once in a lifetime opportunity for radical reforms to improve the UK’s public sector organisations.
“Reform and transformation will require strong leadership and fresh talent with the capacity to execute real change. A flexible workforce will be key to this process which is why we’re working closely with public sector employers to ensure that the focus is on long-term sustainable reform rather than a slash and burn approach to both jobs and services.”
To coincide with the Summit, the REC’s Research Industry Unit published ‘Hire Power’, a practical business case to help hiring, procurement and HR managers make informed recruitment choices. Copies are now available through the website, http://www.rec.uk.com/about-recruitment/research/bookshop/HirePower
