Stockton-on-Tees Borough Council

Big plans, bright future

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Cabinet Decision: 14th February 2008
Title of Item/Report
Planning for the Future 3
Record of the Decision
Members considered a report that sought Members approval to a review of Heads of Service and the senior management structure, taking into account current recruitment and retention issues as well as the need to improve the capacity of the Council. The report also informed Members of issues relating to pay in respect of the Corporate Management Team and raised the need for some work in the future which looked at longer term solutions around recruitment, retention and succession planning,

Members were reminded that the Council had undertaken significant organisational reviews over recent years through the Planning for the Future process.

Planning for the Future 3 aimed to build on the success of earlier reviews which had played a significant part in Stockton's continued assessment as one of the best performing Council's in the country. Consideration therefore needed to be given to cascading this approach further down the organisation. The timing of this was appropriate not only because of the need to build on previous successes but also as the Council implemented the final phase of the Single Status Agreement. Members noted that posts graded PO15 and above were to be evaluated using the Hay scheme. This would provide an opportunity not only to ensure these posts were graded appropriately but would also address a current concern over the salary gap between third tier officers and Heads of Service to aid succession planning; and address some recruitment difficulties.

In October 2006, Cabinet approved an interim restructure of Heads of Service and required a further report to be presented following the conclusion of a number of issues which would have a significant impact on the Council over the next 6 - 12 months. The interim restructure resulted in the reduction of three Heads of Service posts and the temporary redistribution of their responsibilities to existing post holders. The issues referred to in the report included a review of Access to Services, the Stockton and Darlington partnership, the development of integrated service areas in CESC and the planned retirement of a Head of Service and a more co-ordinated approach to sports development. These issues had either been resolved or were well on the way to being so and in addition to the extension of the review to third tier officers, it was now appropriate to formally review the structure of Heads of Service in accordance with the Cabinet recommendation.

It was explained that the Local Government Agenda had continued to broaden and the Council needed to maintain the direction of previous reorganisations to build capacity and a management team which was structured appropriately to meet future challenges. In addition, recruitment had become increasingly difficult and there was a national shortage of staff of the calibre required to meet the Council's needs, who were willing to work within the Public Sector. This had resulted in escalating recruitment costs and the application of financial incentives whilst current salary levels were becoming less competitive. Heads of Service were last evaluated over 3 years ago, also using the Hay evaluation scheme and since then, there had been significant organisational change.

In determining its senior management structure, the Council also needed to look to future pressures. As an excellent rated Council, senior managers were frequently approached by recruitment agencies seeking to persuade them to apply for vacant posts. It was therefore essential that salaries remained competitive.

Many of the issues referred to above also affect the Chief Executive and Corporate Directors. The two previous Planning for the Future reviews had built up an extremely competent and effective management team which the Council must seek to retain. A shortage of potential candidates of such a calibre meant that Council recruitment and retention strategies and salary levels must be competitive. In addition, these officers are currently in receipt of performance related pay. The scheme was complex and difficult to administer. At the last meeting of the Remuneration Panel it was agreed that the scheme should be reviewed. For all these reasons it was considered that the time was now right to bring together a review of posts graded at Head of Service level or their equivalent, together with Senior Managers and for Cabinet to receive a further report, in respect of those CMT members not included in this review i.e. the Corporate Directors and the Chief Executive.

It was explained that the steps described above would resolve the immediate issues but a more integrated approach needed to be looked at for the future. This could be achieved through the introduction of the concept of total rewards and through more effective succession planning. The 2007 Recruitment and Retention Survey undertaken by the Chartered Institute of Personnel and Development found that out of the top 15 recruitment initiatives, only 3 of these are financial. Other contributing factors include:
a. Using the employer brand to market Stockton Borough Council as an employer of choice
b. Offering flexible working
c. Training and development opportunities
d. The job role.

The top 4 reasons for leaving were found to be:
a. Change of career
b. Promotion outside the organisation
c. = Level of pay
= Lack of development or career opportunities

A modern pay system therefore needed to reflect not only new structures but also needed to reinforce high performance including an assessment of all those factors which contributed to recruitment and retention ie a total rewards approach. Recruitment and Retention issues would therefore need to be tackled not only through an assessment of pay through the Hay evaluation process but also through succession planning, the promotion of jobs and careers at Stockton and diversity issues. Leadership and Management development would also be a key element. These issues would apply not only to senior staff but to all staff across the organisation and would be tackled on a phased basis. The detailed approach, together with associated timescales, was set out in the Council's People Strategy which described how the Council would lead, manage and develop its employees over the next 3 years. In respect of the issues detailed above, it was planned to complete the elements of those projects which applied to senior managers, within the next financial year 2008/09.

RESOLVED that:-

1. a review of those posts graded at Head of Service level or their equivalent together with senior managers who meet the criteria detailed in the Single Status Agreement, be approved

2. the submission of a further report to a future meeting of Cabinet, in respect of those Corporate Management Team members not included in recommendation 1 above, in relation to issues of retention and remuneration, be approved

3. the need for a further report to consider longer-term solutions to address recruitment and retention difficulties and ways of improving the capacity of the Council be noted.
Reasons for the Decision
In October 2006, Cabinet approved an interim restructure of Heads of Service and required a further report to be presented following the conclusion of a number of issues which would have a significant impact on the Council over the next 6 - 12 months. The interim restructure resulted in the reduction of three Heads of Service Posts and the temporary redistribution of their responsibilities to existing post holders. The issues referred to in the report have either been resolved or are well on the way to being so and it is now appropriate to formerly review the structure in accordance with the Cabinet recommendation.

The finalisation of Job Evaluation in respect of third tier officers, recruitment and retention problems, difficulties in succession planning due to wide variations in pay and the fact that our salaries are becoming less competitive, also support the need to review the structure of senior managers within the Council.
Alternative Options Considered and Rejected
None
Declared (Cabinet Member) Conflicts of Interest
None
Details of any Dispensations
Not Applicable
Date and Time by which Call In must be executed
By no later than midnight on Friday 22nd February 2008
Attachment

Date of Publication: 18 February 2008


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