True cost of Partnership 2000 deal yet to emerge

THERE are two things wrong with the public sector pay deal included in the new Partnership 2000 agreements. One is that once the carryover of the previous agreement, increments, increases in staffing in some areas and other factors are counted in, the total rise of 9.25 per cent granted over just more than three years is likely to turn into 15 to 16 per cent. The other is that it is not clear whether the kind of reform of the public sector which is required will take place.

Looking at the figures, the broad increase of 9.25 per cent is not, on the face of it, excessive. The problem is the add ons. An analysis done by the National Economic and Social Council (NESC) shows that the public pay bill increased by just over £2 billion between 1987 and 1996. Just 43 per cent of this rise was accounted for by general round increases. A further 30 per cent resulted from special increases, much of which were carryovers from the old system of determining pay. The remaining 26 per cent was the result of other factors, including rising employment, "drift due to structural changes" and annual increments.

Even before the new document was agreed, the Government was faced with a rise of more than 5 per cent in the public sector pay bill next year and this will now add on to the cost old the new agreement. But beyond that there must be a commitment to put a firm lid on the further addons which have done so much to push the pay bill higher in recent years.

One key factor will be the control of public sector numbers. Everyone is in favour of this in principle until it comes to arguments about the need for extra nurses or teachers. Another key factor will be general control procedures to stop factors such as "drift due to structural change" seeping in.

But the real battleground will come in terms of what kind of reform in the public service can be achieved over the period of the new programme. Here the document makes two key points. One is that further progress in modernising the service will be achieved and that it is accepted that such change, "in itself, is not a basis for claims for pay and conditions". The second is that a 2 per cent local bargaining agreement due towards the end of the agreement will only be paid if sufficient progress on this modernisation programme has been made.

The Partnership - 2000 contains some general promises on what should be done towards public sector reform. But it is all very woolly, with commitments such as: "In this context, organisational structures, administrative and managerial processes, and working practices generally need to be constantly reviewed and adapted as circumstances warrant." It is the kind of thing which can mean whatever you want.

The new programme could be a recipe for improvements which would give more job satisfaction for public servants and a better service to the public, or it could be an agenda for "no change".

The NESC report outlines some of the measures needed calling for greater change in the organisation and efficiency of the service. Already a Strategic Management Initiative is in place in the public service, but so far the evidence to the public has been little more than mission statements being published by Government departments. Many of the reforms needed have, however, been identified by senior civil servants in a document called Delivering Better Government, published earlier this year.

The question now is whether they can be made to happen. Key steps to reform would include the devolution of responsibility and accountability to civil service managers - giving them control of a budget which they can then spend as they wish to achieve set goals. The procedure for setting and monitoring such goals will also be vital. This would require a change in legislation.

Driving through such reform would require a strong commitment by Government and willingness to change on behalf of public servants. The alternative is the continuing cosy consensus where the cost of public pay continues to rise and the taxpayer gets a poor return.