"We’re seen as the poor relations of the public sector,” says Caroline Nugent, minutes into her interview with People Management. It’s a forthright opening gambit, and characteristically truthful – but it also, perhaps, reflects the fact that with (effectively) at least three roles to fulfil, she doesn’t have time to mince her words.
As the president of the Public Sector People Managers’ Association (PPMA), Nugent represents the views of thousands of HR professionals across local government at a time of continued austerity and the introduction of gender pay reporting and the apprenticeship levy.
That’s on top of her day job as director of HR and OD at oneSource, a 1,000-strong back-office function that is one of the largest and most successful shared service operations in the sector, covering the London boroughs of Newham and Havering.
People Management asked her to reflect on the challenges facing PPMA members – as well as what her experiences of shared services can teach others.
Is the worst of austerity over for local government?
I’m afraid not. There are a lot of elections next year and most councils are looking at 2019-20 being a tipping point. No council has gone under yet, but you have to balance the books – it’s part of the statutory duty – and there is going to come a point where someone can’t. A number of councils have very minimal reserves. Grant funding is disappearing.
At the moment engagement is fine, because people are still passionate about working in the public sector. But if we’re not careful, there is a risk that people will say they’ve had enough.
Local government isn’t included in central pay negotiations. But do you expect potential rises across the rest of the public sector to be good news for your members?
Councils have budgeted for 1 per cent [next year] and that’s what I’d expect to be the most likely outcome. Beyond next year, it will be difficult to sustain a 1 per cent pay award. After 2010, we had no pay awards for a few years and then 1 per cent. If it carries on much longer we will not be able to recruit into certain roles and we will have talent issues. Things are becoming unsustainable.
We still see people who are committed to the public sector staying in it. It’s not all about money for them. But when you consider housing, for example, people will not be able to afford to live, particularly in London and the south east.
Does your experience of shared services mean you’re a supporter of their broader introduction across local government?
They can bring huge savings – since oneSource launched in 2014, we’ve saved £25m, for example. And it’s preferable to big outsourcing deals. By doing things as a shared service, you’re still part of the council and still accountable. You don’t hear ‘it’s not in the contract so we’ll charge you another £50’ – that’s where some of the big outsourcing projects have gone wrong. There is a lot more accountability and opportunity in shared services.
What advice would you give an HR professional entering a shared service operation?
Don’t expect everyone to grasp it immediately. Some people don’t want to be part of a shared service and they will make that choice. Others have raved about the fact that they’ve got a chance to work for two or three organisations. It means your development is fantastic, but you still have to be aware that each customer is a separate customer, even in HR. You have to know their policies and procedures because they will be different.
Do your background work because once you’ve gone into a shared service it’s difficult to pull out of it. But if you’re up for a challenge and enjoy learning, you can really benefit from it. It’s a great experience.
You’re an evangelist for public sector HR jobs. Why don’t more people understand the benefits they offer?
We don’t do enough on branding in local authorities in particular. If you ask people, you’d hear that we sit around drinking tea all day, we’re a bit boring and we don’t do much. There is still an image problem and the media doesn’t help – even the way the BBC portrays the public sector on Eastenders, for example. What we need is schools and universities telling people about the learning opportunities, because, once people join, they find it’s a great place to work.
Is the apprenticeship levy a positive for the sector?
I was an apprentice, so it’s something I’m passionate about and I’ve always believed we should be doing much more. Apprenticeships aren’t seen as a second-class opportunity any more. There are jobs where you just don’t need to go to university, and they are perfect for that.
But my fear with the levy is that it’s come at a time when apprenticeships are looking more positive. A lot of us have had good, solid schemes for 25 years and now we’re talking about [paying] hundreds of thousands of pounds and there aren’t many junior roles these people can go into. Other jobs will have to be removed to create trainee positions, so managers will potentially have a churn every couple of years of having to retrain someone.
I’ve heard people say that if they have to pay a £200,000 levy, that’s their whole training budget – and more. That means there is no other training. The percentage has come in too high at the beginning. I wish they had asked the PPMA, for example, about what it would mean on the ground before it was brought in.
What gives you cause for optimism?
We have so many big, innovative ideas. I provide services such as investigation and mediation to other councils, which means that, rather than money going into the private sector, it stays in the public sector. More councils are perhaps sharing one senior person. Some of them are setting up trading companies or staff mutuals. None of that would have happened a few years ago.
The days of focusing inward are over, and there are people in the sector who are so inspiring. This perception that public sector HR people can’t balance the budget or be commercial just isn’t true any more.