When Cheshire West and Chester Council was created from four local authorities, sorting out reward was a daunting task, says Nicola Sullivan
Cheshire West and Chester Council has faced several challenges since it became a unitary authority in April 2009. Previously, west Cheshire had four local authorities: Cheshire County Council, Chester City Council, Vale Royal Borough Council and Ellesmere Port and Neston Borough Council. Not only has the shake-up had a big impact on staff and resources, it also instigated a raft of new goals and objectives, including improving on inherited local services, establishing a new identity and credibility among residents and working partners, and putting the customer first.
Debbie Thompson, reward manager for the unified council, says: “Cheshire West and Chester Council has a very different management team and very different culture to the ex-councils. It has very different ambitions and very different values and [ideas about] where it wants to be in a few years’ time. It is a very different culture that it is trying to create, both in terms of the previous legacy authorities, but also, I think it is fair to say, in terms of local government.
“It is trying to be a high-performing council and put the customer at the heart of everything it does. We have quite a huge campaign around putting the customer first. It is really trying to change the way local authorities are perceived in terms of value for money, best practice and customer service.”
Before Cheshire West and Chester Council became a unitary authority, employees had to decide whether they wanted to work on the east or the west side of the county. They were also given the option of taking voluntary redundancy. “It has been very difficult for people,” says Thompson. “There have been huge periods of uncertainty, of not knowing where they are and what role they have got. It has been a very large change programme.”
Once affected staff had transferred into their new roles, the council’s HR team got to work harmonising and reviewing terms and conditions, while addressing any inequities.
Thompson was then tasked with improving its benefits package in the context of the government’s comprehensive spending review, which outlined an average 19% four-year cut in departmental budgets. Any improvements also had to align with the council’s objective to be a high-performing local authority
In its efforts to achieve this, the council is exploring how best to link pay with performance. It has already brought in a formal appraisal system and competency framework, and managers have received training on performance management. “We have national agreements, which basically mean that people [receive increments] on a certain structure and once an employee has reached the ceiling, there is nothing there to reward them on a financial basis,” says Thompson.
Appraisals decide pay increments
Next April, a system will be piloted with a group of senior management employees, using the results of appraisals to determine whether or not a pay increment should be granted. “Their increments will be directly linked to the outputs of their appraisal, whereas at the moment increments are linked to tenure,” says Thompson.
The council hopes that, by 2013, all employees’ pay will be linked to performance.
While it is exploring how to get more bang for its buck in terms of pay, the council is also keen to ensure employees understand the value of their package, particularly the final salary pension scheme. “My view is that the pension scheme has been the star in the wilderness,” says Thompson. “But people do not view it as a benefit, but almost as an entitlement. Among the bigger cultural issues we are trying to change, one of them is the entitlement culture. Yes, it is a great benefit, but let’s see it as a benefit rather than just something that employees get.”
Thompson also wants to ensure that the pension scheme attracts the talent the council needs to meet its objectives. While she recognises the importance of long-serving staff, she is also aware of the need to attract young, dynamic workers who might have a more short-term view of their employment with the authority.
“It is about trying to change the culture around the pension scheme and get it to be seen as a great benefit, rather than something that ties [them] in,” she says. “If you think about retention and recruitment, do we want somebody who feels they need to work here for 40 years? Or do we want somebody who is quite dynamic and feels they want to work here, do the best they can and then move on?”
Thompson believes that being tied into a job with the council because of the pension scheme does not always help to drive a high-performance culture. “If I think about the types of people the council wants to attract and the types of people it wants to retain, it is about making sure we have the package to suit different sets of employees,” she says. “Our average tenure is about 12 years and our average age is 47. We have an ageing workforce and we need to encourage people in. The benefits package and the reward programmes have to be fit for purpose.”
Lower-cost DC pension scheme
Thompson believes it could be worthwhile offering a lower-cost defined contribution (DC) pension scheme and separate life assurance benefit for employees who do not want to commit to making large contributions into the existing final salary plan.
The council promotes its benefits package using various communication channels, including roadshows, its intranet, email and internal publications. Total reward statements, detailing the value of an employee’s total package, will be issued for the first time next April.
Despite operating in a challenging environment and facing tight cost margins, the council has managed to boost its benefits package significantly since its formation. It has done this by taking advantage of salary sacrifice arrangements on tax-efficient benefits and utilising discounts on a number of council-run services. Like Cheshire West residents, all employees are entitled to a Charisma card, which offers discounts at a number of local attractions, shops, restaurants, beauty and hair salons. Meanwhile, its Work Fit membership scheme offers staff discounts at council-run swimming pools and gyms across the borough.
The council also offers a voluntary benefits scheme, provided by P&MM, called Lifestyle, which brings together retail discounts and tax-efficient benefits, including bikes for work and a holiday purchase scheme called Holiday Plus.
To be eligible for Holiday Plus, employees must earn a minimum of £20,000 a year and work 40 hours a week. An employee on this salary can purchase one additional week of leave, which is paid for out of their gross salary. This enables the council to reduce the cost of its overall salary bill and save on the associated national insurance contributions. The council has estimated this benefit will result in savings of about £100,000 a year.
Thompson says: “With budget cuts and depleted resources rife among public sector organisations for some time now, we have had to seek out ways to make our budget work for us in the most effective way possible.”
Cheshire West and Chester Council has certainly proved it is possible to create an appealing and attention-grabbing benefits package during a particularly challenging time for the public sector and its staff.
Cheshire West and Chester Council at a glance
Cheshire West and Chester Council is responsible for delivering 750 services ranging from pest control to education, recycling and regeneration, for residents, local businesses and tourists. It was established as a unitary authority in April 2009 as a result of the local government reorganisation initiative announced by the secretary of state for communities and local government in December 2007.
The four councils previously covering west Cheshire – Cheshire County Council, Chester City Council, Vale Royal Borough Council and Ellesmere Port and Neston Borough Council – were abolished.
Cheshire West and Chester Council employs 14,000 staff, 7,000 of whom work in schools and about 200 who work at its headquarters in Chester.
Since becoming a unitary authority, the council has focused on improving inherited services, establishing its new identity and credibility among residents and working partners, putting the customer first and making a difference to people in the borough.
In its first year, the council delivered £43 million in savings, which enabled £7 million to be reinvested in services relating to child and adult social care and a £36.2 million reduction in the financial burden for local council taxpayers.
Career history: Debbie Thompson
Debbie Thompson, reward manager at Cheshire West and Chester Council, joined the organisation shortly after it became a unitary authority in 2009. Before that, she spent five years in reward and benefits positions at Royal Liver Assurance. Her first HR role was in 1996 at MBNA (now Bank of America), a year after joining the firm as a management accountant. Before that, she held accountancy roles at various organisations, including Capital Bank.
Throughout her career, Thompson has worked by the philosophy that reward packages should be fair and consistent. “One of my biggest bugbears is when you go into certain places and, from a reward point of view, it is very isolated in terms of how benefits are set up and structured. My philosophy is about trying to make things fairer and more consistent, and give everybody the ability to access a benefit.”
Thompson cites her work in grappling with cultural and organisational change as the most fulfilling aspect of her career. “At MBNA, I was able to build up a lot of the reward and benefits programmes and bring in performance management, appraisals, pay structures and job evaluations,” she says.
“Ten years later, I went to Royal Liver Assurance and it was going through a major change programme. It was downsizing and I was able to go in and change the whole HR strategy, particularly the reward and benefits, and the performance management side.”
Defined benefit pension scheme (staff contributions range from 5.5% to 7.5%)
Salary sacrifice car leasing scheme
Car leasing scheme (without salary sacrifice)
Bikes for work
Retail and leisure discounts
Work-life balance and family-friendly policies
Paid emergency leave (six days)
Health and wellbeing
Employee assistance programme
Health cash plan
Occupational health services
28 days as standard, increasing to 30 days after five years’ service
Eligible employees can purchase additional days via a salary sacrifice arrangement
On-site canteen at some locations
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