The money programme

The government says new money for public services must be spent
on service improvements, not staff pay. But, as Brendan Martin
reports, the evidence suggests that attracting and keeping staff,
and boosting staff morale are essential to giving users what they
want and deserve.

Downing Street was said to be perplexed that, not 48 hours after
chancellor Gordon Brown’s comprehensive spending review
committed larger budget increases to public services than had any
government since the 1970s, local government workers responded with
a display of union power also unseen since that decade.

Yet both the long-awaited investment and the determination of
local government employees to begin to reverse years of
deterioration in relative earnings are manifestations of the same
political trend.

It is marked by widespread determination to transform not only
public services but also the lives of those who provide them. If it
is to succeed, it needs to be guided by a judgement that those two
goals, far from being mutually antagonistic, are indivisible.
Instead, it looks as though the idea that the extra money will be
used to relieve pressure on public service workers, and by doing so
enable capacity such as hospital beds to be used more effectively,
could push the government on to the defensive.

The critical tone was set in April, after the chancellor’s
Budget foreshadowed the unprecedented scale of spending increases
outlined in the spending review on 19 July.

Michael Saunders, an economist at City financial institution
Schroder Salomon Smith Barney, calculated that 59 per cent of the
extra cash spent by the government in the first three months of
this year was absorbed by inflation, which is running at a much
higher rate in the public than in the private sector.

“The surge in public sector inflation highlights the
difficulty that the government faces in improving public services,
which are labour intensive, at a time when the labour market is
very tight,” he said.

The Conservatives have picked up on that theme, warning that,
unless the government’s public service reform efforts drive
up productivity, the extra money will disappear down a black

Brown hardly needs Iain Duncan Smith to urge him on in his
determination to tie the new money to new ways of delivering
services, but he should pay more attention to a different IDS. The
employment issues research unit, Income Data Services, has revealed
the extent of the staff shortages facing social work alone.

In a report for the public service workers’ union Unison
in May, IDS showed that vacancy rates for social workers are
running at 15 per cent nationally, 40 per cent in London and higher
still in the capital’s housing hot spots.

“Staff and clients are suffering from a system which is in
danger of collapsing under the strain,” Unison general
secretary Dave Prentis said. “Not enough people are joining
the workforce and too many of those that do leave after two or
three years burnt out and disillusioned.”

Prentis could have said much the same about any section of the
public service workforce, but social workers are lagging behind
even teachers, nurses and police officers, at whom cost of living
supplements, location allowances and other special measures have
been aimed.

“It must be heartbreaking for our members to know that
despite carrying a heavy case-load, working long hours, taking work
home and covering for staff shortages, it is just never
enough,” Prentis said.

“And it must be frightening to know that if anything does
go wrong, you will be vilified in the media and made a scapegoat by
your employers. Is it any wonder that recruitment and retention
difficulties for social workers are widespread?”

Union leaders are paid to say things like that, of course, and
the government is sick of hearing them claim victim status for the
“producer” side of the public service relationship when
they want more focus on the “consumer”.

But much of the trouble for both arises from that very
dichotomy, which might  have had some justification 20 years ago
but now overlooks the fact that one of the main reasons why public
service users are dissatisfied is that public service workers are
As Prentis has said: “It is ridiculous to imagine that
investment in our public services should somehow be separate from
investment in the very people who deliver them. It does mean a
higher status, better rewarded workforce.

“And this doesn’t just mean doctors and nurses,
vital as they are. It also means the armies of staff who bring
dignity to the lives of so many – care workers, home helps, school
staff, caretakers, dinner ladies and classroom

Everyone wants dignity, but actually what is lacking is rather
more basic than that. A picket line anecdote, passed on by a Unison
activist, underlines the scale of one important aspect of the
problem: low pay.

When check-out operators at a Somerfield store in the South West
noticed that striking care workers were assembled outside a nearby
local authority residential home, they expressed their solidarity
by taking some food over. It turned out that some of the
supermarket women had worked at that home but switched to the shop
to earn more.

That causes problems not only for social care services, but also
for the NHS. “The extra money in health will make little
difference to the NHS waiting list if there are insufficient
resources in the care sector,” says Prentis. “If social
services can’t cope the NHS bears the brunt with bed
blocking, waiting lists and cancelled operations.”

It is time to stop treating such statements of common sense as
though they were special pleading by privileged public service
workers. Perhaps there was a time they would have been, but those
days are gone.

It is not just that low pay is contributing to staff shortages,
but also that it combines with the effects of staff shortages to
increase the pressure on those still in posts. That is driving up
stress levels as much as it is driving down morale.

According to an NOP survey for Unison, two out of three local
government workers have considered leaving their jobs in the past
year, and more than half of care workers were seeking other

The main reason was that they felt undervalued (58 per cent);
were dissatisfied with pay (45 per cent); had a lack of resources
with which to do their jobs as well as they would like (42 per
cent), and had a lack of promotion prospects (42 per cent).

Most revealing of all was that seven out of 10 felt that,
compared with the same time last year, workload and pressure in
their area or department had increased, and felt morale had got

But there is much more to improving public services than
improving the lot of their workers, and few would oppose the
chancellor’s determination to get value for the extra money.
Moreover, there is much more to the human resources dimension of
the challenge than dealing with low or relatively declining

Indeed, experience of public service reform in both the European
Union and the US shows that one thing that does import well from
the private sector is the value of creating “learning
organisations” in which the knowledge and commitment of
employees are valued, mobilised and systematically developed.

As Danish and Swedish social services have shown, money can be
saved and outcomes improved simultaneously by developing modern
structures and systems of team work and participatory

But first things first. If what Brown wants is more bangs for
his bucks, he should be happy to start by filling the obvious gaps.
Far from being a diversion from his mission to improve public
services, tackling the recruitment, retention and low pay issues
head on would be prudent.

– Brendan Martin is a specialist writer on public
service reform and can be contacted at

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