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Ealing and Northfield

How to save £30 million

Almost exactly one third of the council’s total revenue spending was spent on people last year, some £346 million on wages and related staff costs out of a total of £1,031 million on the revenue side. Most of these people do a great job for Ealing and too often they get unfairly criticised by politicians, journalists and the general public.

One of the most important ways that the council will be able to live with reduced means over the next four years whilst not impacting frontline services will be to manage this spending very carefully.

I asked the following question at the last council meeting.

Question 33:

Can the portfolio holder answer the following questions in relation to the terms and conditions of directly employed staff?

  1. Number of hours to be worked per week?
  2. Holiday entitlement (including any changes with length of service)?
  3. Any additional holiday days beyond the standard public holidays (8 including Christmas Day, Boxing Day, New Year’s Day, Good Friday, Easter Monday and May Day, Whitsun and August bank holiday)?
  4. The total value of any overtime, anti-social hours, special responsibility allowances, attendance allowances or similar payments made by the Council in the last financial year.

Answer 33:

Number of hours to be worked per week?
35 hours per week
Chief Officers: Undertake such reasonable hours of work as necessary to fully perform duties

Holiday entitlement (including any changes with length of service)?
Less than 5 years service: 24 days
Between 5 and 10 years service: 27 days
More than 10 years service: 30 days
Chief Officers: 30 days

Any additional holiday days beyond the standard public holidays (8 including Christmas Day, Boxing Day, New Year’s Day, Good Friday, Easter Monday and May Day, Whitsun and August bank holiday)?
Extra Statutory Holiday: 1 day (National Term)
Extra Leave: 2 days
All additional holiday days usually taken between Christmas and New Year. For each of these days worked, a day is added to that year’s leave entitlement.

The total value of any overtime, anti-social hours, special responsibility allowances, attendance allowances or similar payments made by the Council in the last financial year.
Figures are for financial year: April 2009 – March 2010 and exclude schools

Overtime: £840,634
Anti-social hours: £721,234
Special responsibility: £201,080
Attendance allowances: None recorded as being paid to employees in 2009/10

Most working people would think a 35 hour working week extremely cushy. I am sure that many of our council’s workers do more than their prescribed hours and are very conscientious. But the same would be true for most who do a basic 37.5 hour week. If your working week is only 35 hours it is 6.7% shorter then that most full-time people put in and that means that the council has to employ 6.7% more people. It also means that the council could save 6.7% of its £346 million staff bill. This is the equivalent of £23 million. The savings that the council is looking for are £53 million. This one area could deliver almost half of that of that in one go. No loss of services. Excellent conditions and pay for council staff.

The council’s holiday offer looks too generous I am afraid. The 24 days basic rate with 3 extra days over the Christmas holidays looks too generous by 4 days. 4 days lost out of a typical working year of 222 days (after holiday, public holidays and national average sick days) is a 1.8% loss. Taken across the whole council’s staff bill of £346 million that is another £6.2 million.

Finally, much of the £1.8 million of special payments made by the council last year would not be countenanced in the private sector and certainly most organisations enduring financial hardship would simply ban overtime straight away. Typically most roles can be filled by people who want to work the hours that are offered. Very rarely do you need to use special payments.

Such changes to terms and conditions could not happen overnight and it would take some persuasion I am sure, but what a huge prize? The total value of these three savings would be £30 million and would do most of the work required for the council to continue to provide good services whilst dealing with a very difficult financial settlement.

4 replies on “How to save £30 million”

Phil,

I am afraid that this was the essence of my letter in the Gazette, that warned that the current administsration will not properly review the real costs of the council.

We will not get the objective review of the real costs of council employees and terms and conditions that you outline; this would be far too controversial for a Labour council to take to Unite, Unison et al. Even if it meant more limited front line service impacts for residents.

What we get instead is a council that will retreat into providing services at the statutory minimum and probably council-wide voluntary redundancy schemes that mean that our best and brightest public servants leave with some cash and take their skills elsewhere – leaving Ealing residents with worsening services over time.

It is also worth pointing out that Cllr Staceys question at last council also highlighted that there are 77 heads of service/assistant directors costing the council £7m p.a. and that the corporate board costs Ealing residents nearly £2m p.a. – for 9 people.

Finally I keep saying £53m sounds a lot but it is below the £60m we saved over the life of the last adminstration; it just needs nominal costs to be considered this time, not the cheese-paring we will get.

Can you imagine Tesco’s managers being asked for similar reductions in overheads and responding by saying that they will have to close all the bread counters. This is in effect the reaction of the public sector.

Food for thought!

Cllr Mark Reen
Northfield.

Phil,

While the principles of your argument are sound, I’m afraid your numbers aren’t. The vast majority of the £346m paybill will be for teachers so any services from reforming teachers terms and conditions will benefit schools. Not a penny of that will go towards the £53m that Ealing Council need to find.

Typically a London Boroughs non-school paybill is about £100m, so your idea would yield £6-7m, well worth having but nowhere near half the savings required. And good luck in your negotiations with the unions.

I write as a retired local government HR director who tried and failed to do this many years ago.

Paul Treadaway

Paul,

You are right but you have got the numbers wrong. This is a blog, not the council’s budget so I am entitled to simplify my arguments. As it is my posts would generally be considered too long.

That said total spending on schools last year was £390 million out of £1,031 million (38%) and the ring-fenced Dedicated Schols Grant was £203 million out of £1,031m (20%). So you might derate my numbers by 20% or even a bit more. By taking the pressure off schools budgets by changing the terms of trade with labour there gives you the opportunity to push more schools costs on to schools so you achieve the same thing indirectly.

You are right that this is hard but the highest value component of this is the working week which I don’t think is a national term and sticks out as being totally out of kilter with the hours that regular council tax payers work in Ealing.

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