Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 80-99)


24 JANUARY 2006

  Q80 Chairman: I am sorry we have kept you waiting a bit beyond the advertised time. We will run a little bit beyond one o'clock as a result but some of my colleagues have to leave at one o'clock for other engagements, so they will sneak out, I am afraid, at one; I apologise for that, there is no discourtesy. We are anxious to give you a fair crack of the whip and our earlier witnesses, as it was, were frustratingly cut short on the questions asked on a number of issues, so I apologise for that. Can I begin, as always, by asking you to introduce yourselves for the record, please?

  Mr Taylor: Thank you. My name is John Taylor, I am the chief executive of Acas.

  Ms Clews: My name is Susan Clews, I am the director for Acas in the North West Region and I chair Acas's strategy group on smaller firms.

  Q81  Chairman: Thank you. We have had a paeon of praise to you all morning, which has been remarkable and wonderful, motherhood and apple pie is a great thing and you clearly support it robustly, and all our witnesses have. I would like a bit of a harder edge than this; have you made any assessment of your actual contribution in statistical and factual terms to the health of the UK economy?

  Mr Taylor: If I could try and answer that in two kinds of ways. In terms of hard statistical evidence there is a lot of information around about costs, around individual conciliation, for example. £30 million was used as what we save the Exchequer, but in addition to that there are various sums bandied about in terms of GDP that we actually save employers, and indeed employees, in terms of reducing the length of the process. On collective conciliation we know, for example, that if we save a one day strike on the London Underground the London Development Agency estimate that to be about £35 million of GDP that we actually save for the London economy. What is much more difficult to put a cost on is the value of the advice and information that we actually give out. It is very difficult to disaggregate the effect of our intervention from a whole range of other sources. The other thing of course is that we regularly sample our customers to find out what they actually think of what we do.

  Q82  Chairman: What do you mean by your customers in that context?

  Mr Taylor: Employers and employees. For example, with the employment tribunal system, which is an incredibly stressful activity for all sides, we come out with remarkably high customer satisfaction levels of 90 odd per cent, so we are pretty clear in our own mind—

  Q83  Chairman: Do you see a difference between big and small companies in that respect?

  Mr Taylor: It is right across the piece, Chairman. The majority of our customers—I will use that term, it is a much better one than respondents, I think—

  Q84  Chairman: I wanted to make sure you were not just referring to businesses when you said customers, that is all.

  Mr Taylor: It is generally businesses because that is primarily who we deal with, but of course we have a helpline which deals with a million telephone calls per year and that is roughly 50-50 between individuals and employers.

  Q85  Chairman: The evidence we have received only struck two discordant notes with us, and one of them is the large number of people who could not spell "its" and I need to send a copy of Eats Shoots and Leaves, but the other one was a very strange comment from one firm of solicitors who said "We note in particular the reference [in our terms of reference] to how Acas contributes to increased productivity, an odd approach to measuring the work of statutory bodies expressly charged with promoting the improvement of industrial relations." Presumably you would see, as I hope you would—a leading question if ever there was one—that improving industrial relations makes a direct contribution to increased productivity?

  Mr Taylor: Indeed. We would argue very strongly, and this is the argument that we put to Government in terms of trying to justify our budget, that getting it right in the workplace is a real means of driving up productivity. On the one hand you have a Government which spends £6 billion on skills acquisition, and really we are about skills deployment and making the best of their time in the labour force. We would say there is a massive link between the two.

  Chairman: Thank you very much. Lindsay Hoyle.

  Q86  Mr Hoyle: Thank you, Chairman. Obviously, the man from Number 11 has set about the Comprehensive Spending Review for 2007 and of course the DTI has got to go under the microscope. Part of that will relate to yourself at Acas with the funding you receive; does this worry you?

  Mr Taylor: There are other problems I would prefer to have than dealing with this one. As an organisation, we have been in the process of continuous improvement for a number of years, and what we have done is looked, using jargon, at smarter ways of working. We have looked at new technology, for example—ten years ago websites did not exist—and we are attempting to get through to individuals using technology. We have looked at smarter ways of working, so many of our staff work from home. We have looked at ways of moving work to staff rather than staff to work to equalise the workload, we are in the process of reducing our estate, so we have got in hand a continuous process of trying to contain costs and provide value to the taxpayer, but obviously with a cut of this size and a reduction in the workforce of this size it is going to be a painful time for us over the next few years to make sure that we have got a commensurate response and continue to provide a good service. Perhaps I could ask Sue to comment on the way in which we have gone about it at grassroots level.

  Ms Clews: What we are trying to do really is to get the most impact with the money that we have got, so we are looking, for example, at smaller firms and how we can get to as many of the 1.2 million businesses as there are, and that may not be through direct face to face contact, which is a luxury we really cannot afford to use very much. We will look at enhancing our website and, as John has mentioned, particularly the helpline where we have increased the opening hours, the training of our staff so they are able to offer a wide range of support in employment matters, and also looking to work with intermediary bodies as well so we have developed much better links with people like FSB—the Federation of Small Businesses—the Chambers, accountants, so that through a certain amount of Acas expertise we can lever a bigger impact.

  Chairman: Moving now to equality and diversity, Roger Berry.

  Q87  Roger Berry: Thank you. Acas provides advice on promoting equality and diversity in the workplace, and in your submissions you talk about enhancing those services. You do refer to equality strands that are currently not covered by existing commissions, which I think is commendable, but it does beg the obvious question, which you have probably heard before this morning, what is the relationship between Acas and the existing commissions and how do you anticipate the relationship with the new Commission on Equality and Human Rights in the future? Who is doing what, basically?

  Mr Taylor: Before I answer that, when we talk about equality and diversity we are really talking about the labour force—what has happened to the labour market and what has happened to Britain's workforce, which has completely changed from what it was 50 years ago. Employers do not think in nice little silos, that this is an equality and diversity issue, employers think how can I actually run my business. With the existing commissions what we have tended to do, because we have no compliance duties because we have no enforcement powers, we have tended to go to employers and talk about equality and diversity in business terms—this makes business sense, to access as many people in the labour force as you can, if you want to be acceptable to everybody in the community, to customers, you yourself need to represent the local population; it is very much the business case. I have to say that the existing equality commissions have welcomed our involvement in that area because we are promoting good practice—you have heard this morning about the fact that people actually believe what we say because we have not got a particular axe to grind. With the new Equality Commission we are talking to DTI officials and, of course, once the new chair and chief executive are appointed we will talk in more detail but, roughly, we would see that same kind of relationship continuing.

  Q88  Roger Berry: Can I ask a specific question. If we are talking, for example, about disability equality, do you advise employers of the reasonable adjustments that they are required to make or should be obliged to make if they are considering employing a disabled person? Do you have the expertise at Acas in that area?

  Mr Taylor: We have a team of equality advisers, about 25 people across GB, who I would say, yes, have that expertise, but the generality of our workforce do not have that depth of knowledge and, where appropriate, we would refer on to the DRC. It is getting that relationship right.

  Q89  Roger Berry: You do not see any risk of duplication again?

  Mr Taylor: No, we see ourselves essentially as complementing what is there. It is essentially the private sector which has difficulty getting its head around some of these concepts of equality and diversity, and what we have attempted to do, as I said a little bit earlier, is to put that in the context of business sense and demystify the area.

  Roger Berry: Thank you very much.

  Q90  Judy Mallaber: What representations did Acas make on the new commission and all of the legislation, and in general how do you see your role in making submissions to Government?

  Mr Taylor: As you will appreciate from this morning, we have an Acas council which goes across the spectrum, so there are some issues where it is highly unlikely we would get an Acas council agreement on a particular line, but actually there are many more where there is a broad consensus. Essentially, we would see ourselves representing common sense and pragmatism, if you like, drawing from the fact that we have been operating with businesses for 30 years and we would offer advice to Government as to whether we thought this would actually operate in principle. It is very unusual, certainly in the time I have been chief executive, for us to take a political stance on a particular issue. It would be very unusual for us to take a political stance on a particular issue and it would be, essentially, what is the practical impact of what the Government is proposing. On the Equality Commission we have put broad comments to the Equality Commission—and I am very happy that the Equality Commission have sent them to you—arguing the business case to learn, and all the signs are that the new commission wants to be seen to be much more business-friendly and we would certainly support that approach.

  Q91  Judy Mallaber: The areas on which you would feel you should make a contribution, are they the areas where you think you can get an agreement on the Acas board, or is it that there is a particular category of areas on which you feel you should be seeking to influence policy?

  Mr Taylor: I go back really to our mission statement which is about improving organisational performance and improving working life. That is the position of the Acas Council and our position would be that those things are mutually inclusive, that if you improve one you should improve the other. That is the broad driver.

  Q92  Judy Mallaber: Is this an area of work that is likely to be hit particularly by the cuts you are having to make?

  Mr Taylor: As Sue said, we are having to think again about how we deliver at the front end, if you like. We have retained capacity in head office in London to produce codes of practice and to give Government advice. The Council took the view, rightly in our view, on the part of management, that this is real high value added that we can actually bring along to Government policy, not just to DTI, trying to influence wider policy on training, for example.

  Chairman: That actually leads very neatly to the questions Anthony Wright wanted to ask.

  Q93  Mr Wright: Following on from the question that was asked before—and you are obviously aware of those questions—regarding the staffing and the cuts, are you concerned about the effectiveness of Acas to perform its duties as it has done for many years with the amount of cuts that are taking place, and could you also confirm how many jobs are actually going to go because it was quoted 100 and PCS have quoted something like up to 160.

  Mr Taylor: There are 150 jobs. What we have tried to do is ensure that our activities around dispute resolution have been safeguarded, so we have tried to retain a credible individual conciliation workforce, who also get involved in mediation, and also retain our capacity to get involved in collective dispute resolution. That is what we have attempted to do. In order to balance the books, if you like, we have had to reduce the amount of what I would call discretionary activity, advice and information. There are some 26 million employees, 3.1 million employers, 600,000 employers who employ five or more, and what we have had to scale back a little bit is our ambition in terms of trying to get closer to SMEs and perhaps workers in some of those vulnerable sectors, which are cleaning et cetera. We are a people-centric organisation and there is a limit to what you can do through a website once you get into human relations difficulties, but what we have tried to do is come up with a commensurate response depending on whether it is a rural part of the country or an urban part.

  Ms Clews: That is right. In my area, for example, in the North West, we will look for opportunities where we think we can have a big impact, like the Liverpool Capital of Culture bid where there is going to be massive growth of employment in the area. We would look at working with other organisations to make sure that new jobs that are created are good ones, wherever possible, with high standards of work, so we look for areas where we can have the most impact. That is not to say that we will forget the very small firms, so we will try and work with people like Business Links, the Chambers of Commerce, so that for one day's work of an Acas person we can reach as wide an audience as possible. We are also trying to look more creatively at how we deliver our services as well, so that might involve things like talking to much larger groups of people than we have traditionally done, having events spread wider throughout the day, but at the moment it is important to recognise that our staff are working extremely hard still to deliver a very high quality service to customers.

  Q94  Mr Wright: Will they have to work any harder because of these cuts, or will there be a loss of effectiveness do you think?

  Ms Clews: Because they are highly professional staff who are driven very passionately by the mission to improve employment relations—stopping a tribunal case going to tribunal is not merely a paper exercise for our teams, so they will do everything they can do and are doing at the moment, particularly in the transition as we lose some staff on early retirement and training. They are working extremely hard and we are also being more flexible in how we deal with cases to make sure that the level of service that is provided, particularly in individual conciliation, is proportionate to the complexity of the case, so something like a race discrimination case would very likely have face to face contact with all the parties, perhaps joint meetings, some real hands-on conciliation, whereas a dispute over a holiday pay claim might well be dealt with purely over the telephone—that would be the likelihood of how it was handled.

  Q95  Mr Wright: Do you not think it is inevitable that there will be an increase in employment tribunals?

  Ms Clews: I do not think that is necessarily the case because we will do our utmost to make sure that the service we offer is appropriate to that case, particularly with the very short period cases where they are over more factual points of evidence. We will point those issues out to the parties and we are confident that we will still achieve a high level of settlement in those cases. It is something we will monitor and, clearly, if there is any reduction in service then we would reflect that to the Acas Council and to DTI.

  Q96  Mr Wright: Have you got plans to bring back any of the staff who have taken voluntary retirement on short term contracts?

  Ms Clews: We have not got plans to do that. It is an option that we would consider in very, very rare circumstances, and the ones that spring to mind would be, for example, if they were working with a particular customer, perhaps following a collective conciliation to improve employment relations, it might be reasonable for them to do a few days work to finish off that particular piece of work—relationships that have been established would be hard to replicate with another colleague. That is the main situation I see. The only other area where I believe we are actively considering it would be if we had a large influx of equal pay cases where we needed to conciliate, and that would stretch our resource considerably so that might be one of the options. It would only be one option that we would look at, it is not a widespread practice at all.

  Q97  Chairman: I wonder if, as a point of fact afterwards in writing, you would let us have a note of your staffing in regional offices, broken down with the numbers in each office—the annual report does not give that breakdown—so we have an indication of where the staff are working geographically.

  Mr Taylor: Yes.

  Q98  Mark Hunter: My question is about staffing as well. Given the current situation where the public sector generally has to make savings, do you think that Acas should be exempt from that situation? If you do, perhaps you could explain why and if you do not and you think it is reasonable that Acas should similarly be expected to make efficiency savings, what would you think would be an appropriate reduction in the grant in aid that Acas receives from Government?

  Mr Taylor: We certainly should not be exempt from good governance or from the taxpayer getting value for money, and that is why I was talking about the way in which we are using new technology, for example. We are a very odd organisation because at one level we do not want any repeat business—hopefully, we resolve your problem and you do not actually come back—but on the other you know that the demand is almost infinite because as regulation increases the complexity of working life increases. What we have attempted to do is increase our output if you like for the same amount of money. I am not in denial about the impact that this staff cut will have on the organisation, and even with the best, smartest, cleverest way of responding you simply cannot lose 150 qualified, frontline staff and continue to provide the same kind of service, so we have looked very long and hard at how flexibly we can deal with that. What kind of reduction in budget would be reasonable? Certainly the argument that we have put to Government is that we have taken our fair share of cuts and if you were to reduce our budget by another substantial amount then we would have to think very seriously about stopping doing things. At the moment our response is we have been able to continue with the broad remit of services, I do not think we could manage with another significant cut.

  Q99  Mark Hunter: If you had to stop doing things, as you put it, what areas of the service would be under threat immediately?

  Mr Taylor: We would look at whether or not technology could help, and certainly around advice and information we could do a lot more in terms of enhancing the website. What that would do is it would drive us off our mission; in particular it would mean that vulnerable employers, in particular SMEs who do not necessarily have the time or the intuition to go on the website and really need people contact, they would not get that, similarly, vulnerable workers, if we were forced to scale back our helpline or reduce our standards et cetera. There is a limit to what we can do, given the statutory responsibility we have got around providing the conciliation service.

  Chairman: We will be exploring charging a little later on in the session, but not now. We will move now to individual dispute resolution. Mike Weir.

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