Select Committee on Public Accounts Fiftieth Report

Conclusions and recommendations

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The levels and cost of sickness absence

1.Since the C&AG's Report absence levels have reduced from 20 to 17 days per employee, however, three working weeks per person is still disgracefully high and a huge step change in the management of absence is required to reduce this to an acceptable level.

2.The direct cost of absence is estimated at £2 million a year but this does not take into account indirect costs such as overtime or loss of productivity. It is likely that the full cost of absence is closer to twice the level of direct costs

3.The level of medical retirements in the DRD industrial workforce is three times higher than the United Kingdom average, generating very significant additional costs. The Department is confident that the rigorous application of inefficiency procedures which was absent in the past will reduce the level of medical retirements, but no targets have been set. We expect specific time-linked targets to be set in line with comparable public sector organisations

The reasons for high levels of sickness absence

4.Procedures for the management of sickness absence in both Agencies complied for the most part with best practice, but were not applied effectively. Senior management failed to address this issue until after it was highlighted by the C&AG's investigation. There is no convincing evidence that either the health of the workforce or the security situation in Northern Ireland has had any significant effect on absence levels and given that recent action to apply procedures more rigorously has produced a measurable reduction, we would conclude that high levels of absence are attributable to a failure to manage the problem.

5.It is disturbing that all levels of management had failed to implement established policies and procedures and we are concerned that if this is possible in one area of management, there may be equally serious problems in other areas. We think it important that the Department, Roads Service and Water Service should review the operation of polices and procedures in other key areas of management to assure themselves that these are being fully and effectively applied.

How management of sickness absence can be improved

6.Management information available, particularly in Roads Service, was limited and inaccurate but information systems have since been improved. Both Agencies should make full use of this enhanced capability to inform strategy, facilitate management and monitor effectiveness. We recommend that further analysis of the main causes of absence is carried out, to determine if workplace incidents are a significant cause of absence and whether any change is required to health and safety procedures.

7.The most significant departure from best practice was the lack of realistic targets for absence reduction and targets have since been set in line with Cabinet Office recommendations. We recommend that these are regularly reviewed in the light of the improved management information now available to ensure that they are as testing as possible while being realistically achievable. To introduce motivation to the reduction of absence, we further recommend that individual targets are set and tied into personal objectives for all levels of management.

8.Procedures need to be improved in the following key areas:

·action should be taken in response to all breaches of trigger points;

·inefficiency procedures should be progressed with an appropriate sense of determination and rigour;

·return to work interviews should be carried out for every absence, the outcome should be formally recorded and line managers should be trained in how to conduct them effectively;

·more effective use should be made of Occupational Health Service to shorten the time taken to resolve cases involving long term illness; and

·better use should be made of pre-employment checks and probationary periods to reduce the risk of recruiting people who are likely to be poor attenders.

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Prepared 2 December 2004