The phantom menace that is management restructuring is so called because it doesn’t really threaten the old order. In fact management restructurings are largely symbolic and may cost more in the short term than they save. They are symbolic because they allow Eric Pickles or as he is now know Darth Vader to talk about efficiencies rather than cuts, create the illusion of reform and perpetuate the myth that front line services won’t be effected. The local median is not going to run a campaign “save our managers” and the fact that management posts are to go softens up the rest of the work force and the public for the real cuts to come.
To be convincing management cuts need to be dramatic one in five or even one in four posts to go. Voluntary redundancies and early retirements when they involved managers especially highly paid senior managers can be very expensive in the short term. Redundancy payments can be a lump sum of up to a year’s salary for a long serving manager. Accessing the pension early can involve a lump sum of £200k plus the additional strain on the pension fund cause by a large number of managers drawing their pension when they would have been paying into the pot for up to another 10 years. No one talks about these cost for fear of alienating public onion.
Even if you ignore the short term redundancy costs and don’t count the financial implication of early retirements the money saved by cutting 20 % of your management posts is small beer compared to the amount of money you have to save from your overall budget. Saving ten million pounds in management posts sounds good until it is put alongside the need to save a 150 million from the budget.
Restructuring or saving the Empire is an excellent way of demonstrating big changes and for creating a huge amount of activity. Whilst in reality it is the equivalent of shifting the office furniture around. After much discussion and a few sweaty hours things look different. The opportunity may even have been used to have a bit of a clear out but nothing has really changed. A few people may had changed seats one or two may have a slightly different view but the reasons given for change greater efficiency and a better way of doing things are not much in evidence.
Reforming the public sector and making efficiencies are very much on the agenda driven by the demands of making budget savings and what better way to make those saving than by a management restructuring. But will the latest management restructuring make the savings claimed? Will this be enough or will most of the saving still have to come from services cuts? Will the costs of management early retirements and voluntary redundancies make this an expensive exercise? Will the disruption to services caused by distracted managers and the loss of management expertise be justified by improved services? Or will the wisdom of Margaret Eaton and the force that is the Local Government Association yet prevail over the dark side?
Blair McPherson author of Equipping Managers for an Uncertain Future published by www.russellhouse.co.uk
