Features: July 18th, 2003

Unions and Government: A New Partnership in Local Government

Sir Brian Briscoe

Reproduced by permission of the Public Management and Policy Association.

Two long running conflicts between the unions and Government have recently been resolved. The Best Value review pronounced against a two tier workforce and the fire service dispute has been settled. What these two major engagements between local government employers and unions have in common is significant government intervention – some might say interference – but with contrasting effects. With the two-tier workforce, the government intervened to impose a settlement hailed by the unions as a historic victory; with the fire dispute, the government blocked a deal that might have brought the dispute to an end before the first walkout.

Some might view this result as a score-draw: one-all to the unions and employers. I want to argue that the real scoreline is a defeat for both sides: a reflection of the weakness of both local authorities and the local government unions. Too much government interference both reflects and reinforces this weakness, and both sides would benefit from less reliance on and more independence from government. That means more power and less regulation for councils, but it also means greater local power and more effective local involvement for trade unions. Both are needed to secure a healthy climate for modernisation and service improvement.

Part of the prehistory to the debate on the two-tier workforce is the “social partners” discussions among councils, unions and contractors initiated to rally support for Oona King’s Bill back in 1997 to lift the ban on “non-commercial considerations” in contracts imposed as part of the old CCT regime. The government’s line at the time was that it would only countenance reforms agreed among the three partners. This had the positive effect of incentivising a frank and honest discussion of the issues and a real dialogue leading to proposals genuinely owned and supported by all three parties. Yes, there were areas where they did not go far enough, but, among the partners, the government’s timidity on key issues was held to be more of a barrier to progress than any irreconcilable differences among the parties. The strange fact is that the risk of a two-tier workforce was never raised as a major issue by the unions in those discussions.

The best value review itself began in a very different way, announced at a Labour Party conference following trade union lobbying, with no prior notice or discussion with either council or private employers. This, of course, set the tone for the review, which was less a dialogue than a rehearsal of pre-established positions, effectively abdicating responsibility for reaching a solution to the government. It is clear why councils and contractors might be unhappy about this. My view is that the unions, too, should be thinking carefully about its implications.

Learning from the past

The LGA has made real progress over the last two years in convincing the government of the need to remove the shackles of regulation on local government to create the climate for innovation and diversity that is needed to build continuous improvement into the delivery of local services. This has forced us to face up to the challenge of poor-performing councils and take responsibility for helping them lift their capacities and performance. At the heart of our case is the accumulation of evidence that improvement cannot be delivered from the centre: more regulations and better guidance are not the way to achieve it. There are many examples where government regulations or guidance are unnecessary or fail to reflect local circumstances, and get in the way of local solutions. Nor does publication of guidance guarantee that it will be read, understood or complied with. Improvement comes from within – unless councils have the commitment and capacity to improve their performance, improvement will not happen, however many circulars issue from Whitehall. Conversely, if the commitment and capacity are there, the circulars are probably not needed.

The new best value guidance is thus a curate’s egg. The parts that deal with best value reviews and performance planning deliver a significant reduction in prescription of process, recognising that success in best value should be judged by service results, not whether reviews and plans comply. But the parts that deal with workforce issues add substantial new areas of prescription as if the government has learned nothing from the past.

And not just the government. The unions’ tactics have been based throughout on the – apparently unquestioned – assumption that the best way to secure their members’ interests is to lobby the government for protective legislation. This may provide some redress when things go wrong, but does little or nothing to uncover or tackle the causes of the problem. Where it exists, a two-tier workforce is rarely likely to be evidence of an evil conspiracy by councils and contractors against employees and more often a sign of poor procurement skills among councils or poor human resources practices among contractors. The new guidance will do little on its own to address either.

The two-tier workforce issue goes to the heart of the debate about the improvement and modernisation of public services: is it possible to reconcile modernisation, outsourcing and fair treatment of employees? I believe that it is. Looking ahead, the real risk from the outcome of the debate so far is that at least one of these three will be the casualty of the approach the government and unions have taken. Service modernisation is not an optional extra. Meeting the rising expectations of the users of public services is essential if councils are to command respect and support. If they fail to meet this challenge politicians and public service workers will both suffer. To pretend that the private sector has nothing to contribute and all the answers to improvement can be found among those currently employed by councils is equally a dangerous illusion.

The challenge of modernisation

High-performing councils have a strong track record of innovation in service delivery. What they have in common is a willingness to try new approaches – and to drop them where they do not work. What they do not have is a doctrinaire approach that public or private has all the answers. Local government now faces the challenge of raising the performance of all councils to the standard of the best – and this means building the capacity for innovation, including the confidence and skills to find the solution that works best in a local context. Where these are not present, the danger is that the new guidance will intimidate members and managers into believing that the safest course is to leave services alone. Equally, some contractors may take the view that that the local government market is not worth bothering with.

Modernisation is just as challenging for council employees and their unions as it is for managers and members, and the need to build the understanding and skills of trade unionists to engage effectively with the issues at a local level just as acute. In fact, to be honest, more so. Fear of the unknown coupled with the lack of skills to tackle it makes resistance to change seem the safest course. In the long run, however, it is not. The interests of employees are better served by effective dialogue throughout the process of planning and delivering modernisation than by government guidance or legal redress. But this means building the local capacity of employees and their representatives department by department, council by council. Just as we have had to face up to the weakness of some councils and design and deliver effective programmes of support, so the unions need to face up to and tackle their weaknesses at local level. The ear of government gives the illusion of power, but it is only an illusion. What matters is what happens on the ground.

The fire dispute has also highlighted the weakness of councils and unions, but in a different way. The government stepped in on the grounds that the employers could not finance their proposed offer without help the Treasury was not prepared to give in the absence of firmer guarantees on savings from modernisation. This was not entirely surprising since the Treasury controls 75 per cent of council income. If local government had more financial autonomy, it is entirely possible that the dispute would have taken a very different path. Sometimes it is convenient for councils to plead financial powerlessness to resist a pay claim. But it would be better for both sides if there were not a third party to the negotiations. Unions would be dealing with employers who had the authority to negotiate; employers would have to accept full responsibility for their actions.

Money is important to the two-tier issue, although the financial implications of the Code have hardly had the attention they deserve. Poor procurement has often been lowest price procurement without adequate attention to quality of service or treatment of employees. A lack of financial autonomy has not helped by inhibiting service planning and creating the short-term budget pressures that often drive such “bargain basement” purchasing.

The LGA is about to begin, with government, a major review of the balance of council funding between local taxation and government grant. Some might see this as a private debate between central and local government of little relevance or interest to outside interests. Far from it. It is very much in the interest of local government employees and their unions to argue strongly for councils to have greater power to raise local taxes and use the income as they see fit, including fair wages for those who provide the quality services they aspire to provide.

Sir Brian Briscoe is Chief Executive of the Local Government Association.