MPS police staff early departures overview of activity to date

Report: 9
Date: 22 September 2011
By: Director of Resources on behalf of the Commissioner

Summary

The MPS police staff early departure programme has been running since November 2010. Groups eligible for early departure offers have been driven by business need as the MPS transitions to new and more efficient service delivery models in support of finding £600m of savings by 2014-15. The Authority has accepted that the scale of departures being implemented means that the cost cannot be met within existing business group budgets and, following approval at the Finance and Resources Committee on 18 November 2010, an earmarked reserve (Budget Pressures) was established at £53.2m. The current report provides an overview of police staff early departure activity to date focusing on an assessment of actual spend against approved spend from the budget pressures reserve.

A. Recommendations

That members

1. Note the early departure activity undertaken across the MPS to date particularly in relation to approved spend and actual spend.

B. Supporting information

Context

1. The MPS is facing significant financial challenges and must find £600m savings by 2014-15. For some time now, Management Board has been clear on their strategic approach to the delivery of these savings:

1. Reducing the cost of our asset base
2. Delivering an effective business and operation model including - process improvement activity, shared services, outsourcing and joint ventures. New operating models will require less police staff roles to deliver them
3. Only then reducing operational officers and PCSOs

Management Board has also been clear that their priority must continue to be the maintenance of operational capability to deliver policing services and keep London safe. This is all the more critical as the organisation prepares itself to deliver the largest ever peace time policing operation - the London 2012 Olympic and Paralympic Games - and manage the associated challenges that this presents us with.

2. Given the level of savings the MPS is required to make and that 73% of our costs are payroll, it is inevitable that we have to reduce the number of staff in the organisation. Significant savings have already been generated from our asset base (e.g. buildings and vehicles) however this is not enough to close the anticipated budget gap. Management Board has been clear that over the coming years the MPS will have to shrink across all of its staffing groups. This position is reflected within the MPA’s Policing London Business Plan.

3. In delivering the necessary reductions to MPS staff numbers, preserving our operational capability and making sure that we can deliver the same standard of core policing services to the public, as far as is practical, has to be our priority. In support of this, it follows that operational and business support functions must therefore be as lean and as efficient as possible, remaining fit for purpose in terms of delivering a 21st century police service. Regardless of our financial position, ensuring support functions make the very best use of limited public funds is the right thing to do. This inevitably impacts on police staff numbers.

4. Management has been and remains committed to working closely with both the Trade Union Side (TUS) and individuals in order to avoid compulsory departures wherever possible, and we continue to pursue a range of pre-redundancy measures in support of this. As part of this activity, we commenced a police staff early departure scheme in November 2010. Since this time the scheme has been expanded and offered to an increasing number of police staff groups. All groups have been dictated by business need. Management Board and the Authority have approved all the police staff groups targeted for early departure schemes, and the Authority (via Finance and Resources Committee) has approved access to the budget pressures reserve to meet the associated costs.

Civil Service Compensation Scheme

5. All police staff within the MPS are subject to the provisions of the Civil Service Compensation Scheme (CSCS). The terms of this scheme are set out in legislation and cannot be amended locally by employers. With the objective of controlling cost, a new CSCS was introduced by the Government with effect from 22 December 2010.

6. Under the new CSCS, there are three categories of early departure. These are;

• Voluntary Exit
• Voluntary Redundancy
• Compulsory Redundancy

Before any scheme can be launched, Cabinet Office approval must be obtained and they will issue a unique identifier to each scheme.

Voluntary Exit

7. Voluntary Exit (VE) can be offered in the interests of workforce efficiency, for example, where employers wish to reduce staff numbers in support of organisational change, address promotion blockages or tackle limited efficiency. There is a standard tariff of one month’s pay per year of service up to a maximum of 21 months pay for those under scheme pension age. There is a maximum of six months pay for those over scheme pension age. Tapering arrangements for those close to pension age also apply.

8. This category introduces an element of flexibility for employers. Employers can, if they wish, offer more or less than the standard tariff. The maximum employers can offer is twice the standard tariff, up to the overall early departure limit of 21 months. The minimum the employer can offer is equal to the amount due under statutory redundancy terms. Employers may offer the payment protection for lower paid staff if they wish and they may also offer to top up the compensation payment to those who are over minimum pension age and wish to use their compensation payment to buy out the reduction on their pension benefits.

9. Voluntary Exits are subject to three months’ notice.

10. Within the MPS, on the grounds of affordability, the Service uses the standard tariff for Voluntary Exit offers made. However, Management Board has lowered entry eligibility for offers down from two years to one year and also apply the £23,000 pay protection for lower paid staff.

Voluntary Redundancy

11. Voluntary Redundancy (VR) terms must be offered where the employer has begun formal consultation with the Unions about possible redundancies. Voluntary Redundancy must be offered to all staff at risk of redundancy under that consultation. There is no compulsion on staff to apply for Voluntary Redundancy but they must be made aware that, if they do not apply, they could be made compulsorily redundant at a later stage of the same process and this may alter the financial terms they receive. However, if an employee applies for VR but does not meet their employer’s criteria for release, they cannot be subject to Compulsory Redundancy terms at a later stage of that redundancy exercise. Staff in this position will be entitled to the Voluntary Redundancy terms.

12. Under Voluntary Redundancy, employers must offer the standard tariff of one month’s pay per year of service up to a maximum of 21 months pay for those under scheme pension age. There is a maximum of six months pay for those over scheme pension age. Tapering arrangements for those close to pension age also apply. In addition, employers must apply the protection for lower paid staff (for salary of under £23,000 per annum) and the restriction on pay for the highest paid (£149,820 per annum). Employers must also top up the compensation payment to those who are over minimum pension age and wish to use their compensation payment to buy out the reduction on their pension benefits.

13. Voluntary Redundancy departures are subject to 3 months’ notice.

Compulsory Redundancy

14. Individuals must be offered Voluntary Redundancy making it clear that they are at risk of Compulsory Redundancy before employers can launch a compulsory redundancy scheme. The Voluntary Redundancy scheme must be linked to the Compulsory Redundancy Scheme covering the same staff and under the same unique identifier.

15. Employers have no flexibility in the terms that can be offered on Compulsory Redundancy and cannot top up compensation payments to meet the costs of paying unreduced pensions. The tariff is 1 month’s pay per year of service up to a maximum of 12 months pay for those under scheme pension age. There is a maximum of six months pay for those over scheme pension age. Tapering arrangements for those close to pension age also apply. In addition, employers must apply the protection for lower paid staff and the restriction on pay for the highest. There is a mandatory qualifying period of two years.

16. Compulsory Redundancy departures are subject to 3 months’ notice unless locally staff have a contractual right to a different period of notice. This is the case within the MPS where a six months notice period operates in cases of Compulsory Redundancy.

MPS Early Departure Scheme: Phase 1

17. In line with the growing pressure on the timescales for delivery of the Service’s Major Change Programme efficiency savings and to enable use of the ‘old’ Civil Service Compensation Scheme terms that were prevailing at the time, HR launched an initial Voluntary Early Departure exercise in November 2010. MPA Finance and Resources Committee gave approval for these costs to be met from the budget pressures reserve. This initial exercise was focused on five staff groups. These five groups, approved by Management Board and the Authority, were selected on the basis that either (a) the function in its current form was becoming obsolete or (b) from April 2011, there would be fewer posts than staff currently employed and therefore a reduction in the existing headcount was critical for achieving the savings built into the SIP and other elements of the MTFP.

18. The five identified groups were:

• Police Staff Postings List (displaced staff)
• Station Reception Officers (SRO)
• Traffic Wardens
• Catering SIP (defined group of in-scope staff)
• Training & Development SIP (defined group of in-scope staff)

A guaranteed selection process was adopted across all five groups i.e. those who applied were automatically accepted.

19. Voluntary Early Departure terms were offered to 1349 members of staff across the five groups. 405 individuals (30%) accepted the offer and left the MPS during Phase 1 at a cost of £10.93m. Due to the specifics of the CSCS at this time, this total cost is spread across different financial years as follows; 2010-2011 £4.6m, 2011-2012 £3.6m and 2012-2021 £2.7m (more precise figures are provided in exempt Appendix 1).

MPS Early Departure Scheme: Phase 2

20. In November 2010, the MPA Finance and Resources Committee considered a paper on new staffing groups which needed to be brought in-scope for early departure in line with the emerging needs of the business. Finance and Resources Committee approved the MPS request that the early departure scheme be continued with the five initial groups and extended to a further eight groups as part of a second phase and that the associated costs would be met from the budget pressure reserve. These groups are listed below;

• Police Staff Postings List (displaced staff) (PSPL)
• Station Reception Officers (SRO)
• Traffic Wardens (now including Traffic Warden Managers)
• Catering SIP (defined group of in-scope staff - expanded from Phase 1)
• Training SIP (defined group of in-scope staff - expanded from Phase 1)
• CCC TOCs
• SCD26 (Oversees Visitors Regulation Office & Prison Licences Liaison Team)
• Directorate of Information (all units)
• TP Development - CRIB
• TP Development - Crime & Customer Strategy
• TP Intelligence Researchers
• Logistical Services
• Performance
• Human Resources

Phase 2A

21. On 20 April 2011 the MPS issued early departure offers (under both VE and VR terms dependent on the group in question) to 1,935 staff across eight of the 14 groups - Displaced list, SROs, Traffic Wardens, Catering, Training, CCC (TOCs), SCD26 Units and the Directorate of Information. This constituted Phase 2A.

22. The closing date for Phase 2A was 27 May. 627 members of staff volunteered to accept the early departure offer made. Table 1 shows how this was profiled across the groups.

23. Assessment panels are held for each group following all early departure schemes in order to give us the opportunity to carefully consider whether or not we wish to accept an expression of interest for early departure submitted from an individual. These panels have the explicit aim of protecting MPS business need and in the spirit of collaboration the TUS are invited to observe this process for all groups. Assessment principles have been compiled to underpin this process and to ensure that the Change Leads are all working to a common standard (the trade unions were given the opportunity to input into shaping this product).

We have always been clear that individuals cannot assume that a submitted expression of interest will be accepted. Business need takes priority and our objective is that the MPS retains the most appropriate staff. The results of the assessment panels for Phase 2A are also reflected in Table 1.

Table 1: Volunteers under Phase 2A

24. Exempt Appendix 1 details the costs associated with Phase 2A in terms of both Finance and Resources Committee approved spend and actual spend. Exempt Appendix 2 provides a further breakdown of actual costs and accompanying pay back periods.

25. To date (24 August), notice letters have been issued to 462 staff under Phase 2A and 246 members of staff have now officially left the service. The remaining individuals have leaving dates between now and the end of the calendar year.

Phase 2B

26. On 6 June 2011, the MPS proceeded to issue early departure offers to four more of the groups (listed at paragraph 19) - Crime & Customer Strategy, CRIB (TIB only), TP Intelligence Researchers and Logistical Services (all units). A second scheme was also launched with the Traffic Warden Managers, this time under Voluntary Redundancy rather than Voluntary Exit terms. This constituted Phase 2B.

27. The closing date for Phase 2B was 8 July. 262 members of staff volunteered to accept the early departure offer made. Table 2 shows how this was profiled across the groups and shows the number of approved volunteers following the local assessment panels.

Table 2: Volunteers under Phase 2B

Group Final In-scope Number MPA Approved Reduction Number of Volunteers Number of Volunteers Approved Number of Volunteers Declined Departures Following Withdrawals

28. Exempt Appendix 1 details the costs associated with Phase 2B in terms of both FRC approved spend and actual spend. Exempt Appendix 2 provides a further breakdown of actual costs and accompanying pay back periods.

29. To date (24 August), dates of leaving have been agreed with 201 members of staff and pension packs have been requested from Logica Paymaster for all in this group. Current activity is focused on distribution of pension packs, getting the relevant signed documentation back from individuals and then issuing notice. It is anticipated that all leavers under Phase 2B will have left the service by the end February 2012.

Phase 2C

30. In a paper considered at the Finance and Resources Committee in June 2011, the MPS requested approval for further police staff groups to be brought in-scope for early departure in line with the developing needs of the business. These groups are listed below. FRC members approved this expansion of the scheme and that the arising costs would be met from the budget pressure reserve.

• Finance & Resource Community
• TP Development - IBO (CCC)
• TP Development - Duties
• TP Development - Joint Prosecution Service
• Car Pound Officers (within SO18)

31. On 11 July 2011, the MPS issued early departure offers to 224 Band E staff within the Integrated Borough Operations (IBOs) across Territorial Policing. This scheme closed on 12 August with 106 staff volunteering to leave the MPS under Voluntary Exit terms. The local assessment panel will sit next week - working within the £2.32m funding envelope approved by Finance and Resources Committee in June. It is anticipated that approximately 50 staff will have their expressions of interest accepted.

Phase 2D

32. On 15 August 2011, Voluntary Redundancy offers were issued to 200 Band E and Band D staff within Borough based Crime Management Units (CMU) under the TP Development CRIB project. Individuals have five weeks to consider and respond to the offer made. On August, 54 staff have already volunteered. There is a required headcount reduction of approximately 51.

33. The early departure schemes for Finance & Resources (FRM2) and SO18 will launch on 30 August.

MPS Early Departure Scheme: Next Steps

34. There are four groups remaining where Management Board and the MPA have approved the running of an early departure scheme but to date no scheme has been launched. These are listed in Exempt Appendix 1. Currently business cases in these areas are being refined which will determine the timescales and specifics of the early departure scheme and associated costs.

35. Simultaneously the Director of HR Professional Services is working with the Business Groups and MPS Change Leads to identify new police staff groups where headcount reductions will be required in order to transition to our new service delivery models and achieve the required budget reduction targets in line with the Policing London Business Plan 2011-2014.

Staff Engagement

36. Proactive communication strategies at both the corporate and local level are key to delivering the business change being progressed and achieving the associated benefits. HR is working closely with DPA and project communications teams to ensure fully fit for purpose strategies are in place. A significant amount of work has already been done in this area, for example, standardised and bespoke FAQs addressing different aspects of change and early departure and corporate key messages documents to support change leads and line managers in briefing staff.

37. Given the significant employment relations issues that arise from police staff early departures, especially on the scale outlined in this paper, it is vital that we continue to work closely with the TUS over the coming months in order to ensure we deliver the full benefits of our new service delivery models whilst treating our staff with fairness and dignity. This is key to ensuring internal and external confidence. During Phase 1 and Phase 2A effective engagement was achieved with all trade union parties. However, more recently, Unite and Prospect have announced their disengagement from the corporate change / early departure work citing concerns about the scale of police staff job losses and perceived lack of planning in some areas. Management is making every effort to re-engage Unite and Prospect. The Commissioner chaired an extraordinary meeting with all TUS colleagues in July and, at the request of national Unite representatives, the Director of HR Professional Services is meeting with them on 7 September in order to discuss their concerns in detail with a view to re-engagement. The following processes are in place to support fully collaborative working with TUS colleagues;

• Bi-monthly meetings between Management Board and the TUS
• Monthly meeting with Director of PeopleServices
• Fortnightly meetings focused on the coordination of the people aspects of the change projects and effective delivery of the early departure exercises chaired by the Director of HR Professional Services
• The monthly Terms and Conditions Forum chaired by the Director of HR Operations
• Local consultation meetings are in place for each of the change projects
• A ‘no surprises’ agreement has been made between Management Board and the TUS whereby the trade unions will have advanced sight of all proposed corporate messages in the area of early departure and the opportunity to influence these to promote a more collaborative approach to messaging.

C. Other organisational and community implications

Equality and Diversity Impact

1. All change projects / programmes have a local Equality Impact Assessment (EIA) that is used to inform the direction of the project. A corporate EIA is also in place in relation to the police staff early departure scheme, owned by HR Professional Services. These are dynamic documents which are regularly updated. Once completed, all EIAs are made available under the MPS Publication Scheme. The Trade Unions and Staff Support Associations have been actively engaged with as part of all the EIA work and it has helped shape areas such as the selection processes to be used and outplacement support offered. The learning from each phase of the early departure scheme is captured and fed into future phases

2. EIA's are being undertaken for all projects within change programmes with recommendations for mitigating activity to be taken at both programme and local level. These have helped inform an organisational understanding of diversity issues and possible adverse impacts arising from change programmes. The Corporate EIA for the early departure scheme will also do the same.

Consideration of MET Forward

3. The voluntary early departure scheme is in direct support of the effective and timely delivery of the savings identified within the MTFP and MPS SIP.

Financial Implications

Funding Early Departures

4. The Authority has previously accepted that the scale of departures currently being implemented means that the cost cannot be met within existing business group budgets. Requests for access to the reserves have been linked to the delivery of major change programmes and the current planning assumptions are that the cost of departures will be met from the earmarked reserves over this planning period. Following approval at the Finance and Resources Committee on 18 November an earmarked reserve (Budget Pressures) was established at £53.2m.

5. The demands on the reserve to date can be summarised as follows:

In the above, the estimates for Phases 2D and 2E are based on early assumptions regarding MPA approved reduction requirements and a 100% take up in each of the identified groups. Based on these assumptions, then the estimated total cost, including administration, is £63m.

However, the required reductions for Phase 2D and 2E onwards are anticipated to be less than originally approved by the MPA Finance and Resources Committee, mainly due to SIP requirements changing. For example, Finance and Resources which is in Phase 2D of the Corporate Early Departure Programme indicate a reduction of 159 although this is now likely to be around 80. Similarly People Services which is due to be included in Phase 2E of the Corporate Early Departure Programme indicate a reduction of 84 although this is anticipated to be around 10-15. Consequently it is expected that the actual costs associated with these two phases will be less than the approved cost of £21.7m. The volunteer take up can also be managed and is being closely monitored.

As a result of previous changes in SIP requirements the cost of ‘volunteers’ on the first stage of Phase 2 stood at £19.3m as at 23 May 2011, but had reduced to £18.3m by August. The MPS is also looking to transfer £4M of reserves no longer required to the budget reserve to address potential current funding shortfalls through the VE process. Approval for this is being sought through the Period 4 Capital and Revenue Monitoring Report. In addition to realigning reserves the MPS will also manage from within existing budgets phase 1 costs which relate to future years. This totals £2.7m from 2012/13 until 2020/21.

Additional costs have been incurred due to a change in position by the Cabinet Office around the inclusion of premium payments in determining earnings, and they have now agreed that they should be included, but only where premium pay has been incurred as a result of rostered working patterns rather than overtime. This has had the affect of adding on an additional £900k to the overall payments.

6. Modelling has been undertaken to assess the costs of the required headcount reductions across each of the new target areas under the terms of the CSCS. This is shown in Exempt Appendix 2. Payback periods are also shown for each of the identified groups. The period of payback is the time it will take to realise a saving in relation to the amount of compensation payment required to achieve an early departure. Modelling has been done on the basis of the following assumptions;

• All departures will be under Voluntary Redundancy terms (Compulsory Redundancy would cost less)
• Depending on phase, a leaving date of 31 December 2011 or 31st January 2012 has been used to calculate age and length of service
• All staff work full-time
• Staff eligible to receive an unreduced early pension will choose this option over a potentially less compensation payment

7. These proposals are necessary to deliver the savings identified in major change programmes and built into the medium term budget and/or assist in the avoidance of redundancies in other staff groups. The costs are expected to fall primarily in 2011-12.

8. On the basis of the current estimates the cost of early departures falling in 2011/12 could exceed the revised reserve funding by up to £3.1m. This will be managed within existing resources available to the Service in order to maximise ongoing savings in 2012/13 and beyond.

Early Departure Team

9. The corporate early departure scheme is managed by the HR Professional Services and administrated by the centralised Pay & Benefits Team. Costs for a 15 strength team to be in place for 2011-2012 were included in the paper presented to FRC on 17 February and approved to be met from the reserves. It is expected that this team will be in place until the end of the current financial year.

Logica Paymaster Support

10. The formal quotation and award processing of the early departure scheme is completed by Logica Paymaster, the MPS Pensions administrator. The costs additional to the current contract for administering the planned departures for 2011-2012 are estimated to be £0.1m. These were built into the paper presented to Finance and Resources Committee on 17 February 2011 and approved at this time but only go to March 2012. Additional costs will therefore be required to ensure the continuation of this resource.

Outplacement Support

11. The Authority has previously approved funding (for departures made in 2011- 2012) for outplacement activity in order to provide as much support as possible for those members of staff leaving the organisation prematurely. Using evidence from the EIA and feedback from previous phases, this activity will be tailored to the specific groups in question where possible.

Future Years

12. The figures highlighted in Appendix 1 relate to those voluntary exit phases which have been approved by the MPA, and which fall, generally, into the current financial year. Given that the MPS still has a considerable budget gap in future years it is fully expected that approval will be sought for additional voluntary exit programmes. Consequently additional resources will need to be identified to cover these, as yet unknown, costs.

Legal Implications

13. When dealing with compulsory redundancies, the employer has to act reasonably and fairly and in particular must have an objective selection process and must seek suitable alternative employment for those at risk. Further, the employer must consult not only with the individual but with the Trade Unions to meet the statutory requirements. An operating procedure has been developed to meet these requirements.

14. Whilst with the numbers of compulsories currently being managed, good relations with the Union most involved is being maintained; it is a reasonable expectation that once the numbers increase there will be opposition from the Trade Unions, as well as legal challenges from some dismissed employees.

15. We have already received Tribunal complaints from some volunteers, focusing on the amount of redundancy payment and failure to redeploy.

Environmental Implications

14. There are no associated environmental implications.

Risk Implications

15. Care must be taken to ensure a fully coordinated and centrally managed communications plan (including press lines) to ensure a consistent and integrated approach to all communications with staff, the Trade Union Side, line managers and the media. The timing and sequencing of communications, along with the language used, are key and the business case for change must be clear and understood by all stakeholders. Particular care must be taken in areas where a new service model for delivery of these services will remain but requiring a different skill set and therefore a different staff group to deliver.

16. It must be highlighted that if the voluntary redundancy take up for target groups is insufficient, and all other pre-redundancy measures are exhausted, then the next step would be to issue dismissal notices on the grounds of Compulsory Redundancy. The TUS fundamentally oppose any compulsory departures and a move in this direction will always raise the risk of a ballot for industrial action. The MPS has taken the unavoidable move to issue a small number of notices of provisional selection for compulsory redundancy within the CCC TOC group. It must be emphasised that this is the start of a six month long notice period process, during which management will work closely with each individual and do all that we can to identify suitable alternative employment opportunities for them should this be what they are looking for. The PCS and management are currently working constructively together in relation to this group and significant redeployment success has already been achieved.

D. Background papers

None

E. Contact details

Report authors: Alex Walsh, Director - HR Professional Services, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Send an e-mail linking to this page

Feedback