House of Commons - Public Accounts

Select Committee on Public Accounts Sixty-Fourth Report

1 Progress in reducing sickness absence

1. Levels of sickness absence are high in the Driver and Vehicle Licensing Agency and the Driving Standards Agency, both of which have consistently recorded average absence levels of between 12.7 days and 15 days for each full time equivalent member of staff since 2003 (Figure 1).[2] This rate compares unfavourably with other public and private sector organisations, with average rates for the wider Civil Service of 9.8 days and six days in the private sector. The large numbers of staff in both Agencies—with the Driver and Vehicle Licensing Agency accounting for over 6,500 staff and the Driving Standards Agency for around 2,500 staff—mean that high levels of sickness absence in these agencies have a significant impact on the Department's overall figure.

Figure 1: Summary of average days of sickness absence per staff member in the Department for Transport and its agencies 2002 to 2006

Note: Some figures may be understated due to under-recording of absences. Total working days sick absence include pregnancy-related absences and sickness absences taken at half pay or nil pay rates.

Source: Department for Transport annual Health and Safety reports (not audited by the National Audit Office)

2. The Department acknowledges that sickness trends across the group have remained essentially flat and that, until recently, managing sickness absence has not been a priority. Some agencies saw a rise in absence in 2006, most notably the Government Car and Despatch Agency, where absence rose from 6.4 days to 12.2 days. In the Government Car and Despatch Agency considerable intervention in 2005 had reduced the rate, but it rose again when management intervention relaxed and there were a number of industrial injuries. Since the Department was established in its current form in 2002 its early priorities have been to put in place appropriate financial and business planning arrangements. Agencies have focused on improving customer services and making wider efficiency savings. For example, the Driver and Vehicle Licensing Agency is seeking to achieve a reduction of 500 posts over three years which will deliver substantial financial savings.[3]

3. Agency Chief Executives set their own sickness absence targets each year which are endorsed by the Department's Management Board. While all eight businesses within the group have set targets to achieve a 30% reduction on 2004 absence levels by 2010, the Department's centre and the Government Car and Despatch Agency have no annual targets in the interim. Only the Highways Agency met its target in 2006 and several agencies' performance was well short of their 2010 targeted position (Figure 2).[4] The Driver and Vehicle Licensing Agency's target is not challenging enough and is unlikely to promote continuous improvement, as it aims to improve sickness targets by one day over the previous year's performance, which resulted in the target going backwards in 2005 when sickness absence rose from 13.2 to 14 days. The Agency believes that since then it has turned the corner and it achieved a rate of 11.6 days for the period ending March 2007.[5]

Figure 2: Only one agency achieved its sickness absence targets in 2006 and several agencies remain some way short of their 2010 objective

AGENCY	2006 PERFORMANCE - AVERAGE WORKING DAYS LOST	2006 TARGET - AVERAGE WORKING DAYS LOST	2010 TARGET - AVERAGE WORKING DAYS LOST
Driving Standards Agency	13.7	11.0	10.0
Driver and Vehicle Licensing Agency	13.1	12.2	9.2
Government Car and Despatch Agency	12.2	No target	6.7
Vehicle and Operator Services Agency	9.1	8.0	7.4
Maritime and Coastguard Agency	7.1	6.0	5.0
Highways Agency	6.4	7.9	5.0
Department for Transport (Centre)	5.5	No target	3.7
Vehicle Certification Agency	5.4	5.0	5.0
Overall	10.2		7.5

Note: Some performance data may be understated due to under-recording of absences.

Source: National Audit Office analysis of Departmental and agency data

4. The Department expects to improve its performance in future. Despite the lack of progress in reducing sickness absence levels in recent years, it is confident that agencies will achieve their 2010 sickness absence targets if they apply the management practices suggested in the Comptroller and Auditor General's Report.[6] Achieving the targets would realise a saving in unproductive payroll costs of some £6.3 million each year. Meanwhile, if the Department's businesses reduce their sickness absence rates to those achieved by organisations carrying out similar functions and employing a similar workforce, they could save around £3 million a year.[7]

5. Managing sickness absence so that it falls to and remains at acceptable levels requires constant management attention and there are risks in focusing on some aspects of sickness absence to the exclusion of others. In 2003 for example, short term sickness accounted for 44% of the total sickness absence in the Driver and Vehicle Licensing Agency. The Agency has reduced this proportion to 38%, but long term absence has increased, so there has been little change in the overall rate of sickness absence. Since 2004, the Agency has directed its efforts at reducing longterm sickness levels and the benefits are beginning to emerge. The risks inherent in failing to maintain a sustained effort to reduce sickness absence can be seen in the Government Car and Despatch Agency. Through considerable intervention by human resources staff, the Agency had achieved a significant improvement in sickness rates in 2005 but performance deteriorated the following year partly because of a relaxation of the sickness management regime.[8]

6. Managers at the Driving Standards Agency plan their staff resources on the basis of targeted absence rates, but those at the Driver and Vehicle Licensing Agency factored existing levels of sickness absence into their resource planning assumptions each year. They are therefore in a position to deliver their business objectives without achieving reductions from existing levels, giving them less incentive to reduce sickness absence levels.[9]

7. The Driver and Vehicle Licensing Agency's planning system is intended to ensure that it has the appropriate level of resources overall. As the Agency currently plans to achieve a headcount reduction of 500 staff by 2008 as well as its sickness absence target by 2010, it does not feel able to plan its resources on the basis of a sickness absence target that it has not yet achieved as it might not have enough staff to meet customer requirements. As sickness absence levels reduce they will be used in planning assumptions to continue the Agency's improvement in productivity.[10]

8. The overall rate of sickness absence is influenced by a relatively few people on long term sickness absence. Around 75% of staff at both the Driving Standards Agency and the Driver and Vehicle Licensing Agency took 10 days sickness absence or less during 2006. Around 30% of staff at both organisations took no sickness absence at all (Figure 3). More than 1,000 staff (over 13%) at the Driver and Vehicle Licensing Agency took more than 21 days in sickness absence, and seven staff at the Driving Standards Agency and nine staff at the Driver and Vehicle Licensing Agency were absent for the whole year.[11]

Figure 3: Breakdown of staff sickness absence taken in 2006 at the Driving Standards Agency and the Driver and Vehicle Licensing Agency

DRIVING STANDARDS AGENCY DRIVER AND VEHICLE LICENSING AGENCY

Total number of working days absent due to sickness Number of staff (Headcount) % of staff (Headcount) Number of staff (Headcount) % of staff (Headcount)

0 771 29 2,580 33

1-5 817 30 2,521 33

6-10 383 14 953 12

11-20 287 11 659 9

21-252 434 16 1,035 13

Total 2,692 100 7,748 100

Notes:

1. Figures based on a 252 day working year (365 days less weekends and bank holidays).

2. Headcount figures refer to the total number staff employed by each agency during the calendar year 2006, including all staff who either joined or left during the year and part time staff.

Source: Department for Transport

9. High levels of sickness absence and the large proportion of days lost to mental health and stress issues (around 25% across the Department) might be a sign of low morale.[12] Both the Driver and Vehicle Licensing Agency and the Driving Standards Agency are going through major change and re-organisation which could lead to low morale and cause stress. In interviews, staff in the Driver and Vehicle Licensing Agency cited the mundane nature of some of their work, an uncomfortable working environment and not feeling sufficiently valued as some of the reasons for high sickness absence.[13]

10. The Agency's data, however, shows that the majority of reasons given for stressrelated absences are lifestyle issues and not related to changes at work.[14] Nor is the Agency's performance in achieving customer service targets and delivering award winning products by way of electronic services consistent with an organisation suffering from low morale.[15] The Department and agencies nonetheless need to develop a better understanding of the underlying reasons for high levels of sickness absence. They have undertaken some work in recent months, but at present the information is either incomplete or the evidence is contradictory.

11. Geographical location appears to have a limited impact on sickness absence levels. The Driver and Vehicle Licensing Agency considers that there is no evidence to link the high incidence of sickness absence amongst its staff with its location in South Wales. The problem stems more from the nature of the work and the composition of the workforce in that organisation than its location. The Agency has not benchmarked its sickness absence data against other employers in the locality, such as local authorities and the health service, or carried out any joint analyses with them. It is keen to compare performance, but other employers have been reluctant to release relevant information.[16] The Driving Standards Agency told us that it has noted regional variations in sickness absence rates across its organisation and has recently begun to examine the trend and consider what action might be needed.[17]

12. Both the Comptroller and Auditor General's Report and the witnesses identified the type of work undertaken by staff and the composition of the staff grade mix as the most significant factors influencing sickness absence.[18] There is a high correlation between sickness absence and the proportion of repetitive administrative work, which is linked to lower pay. The physical aspect of the work—a particular factor in the Driving Standards Agency—also has a bearing on sickness absence rates. The Driver and Vehicle Licensing Agency has a large proportion of relatively low paid, predominantly female staff carrying out mundane work.[19] The Agency's absence problem is centred in two of its eight directorates: the customer services directorate, including the telephone call centre; and the central operations directorate. These directorates employ a high proportion of staff in the lower grades, most of the Agency's women and younger people and deal with the more repetitive work. These factors have been shown by wider Civil Service sickness reports to correlate with high sickness rates and in that respect the Agency is not out of line with other departments performing repetitive tasks.[20]

13. We explored whether there was any correlation between sickness absence levels and such factors as age, gender and young families.[21] At every agency, women account for a higher share of sickness absence than their share of full time equivalent staff numbers, comprising around 41% of the overall workforce in 2006 but accounting for 52% of all working days lost to sickness. This finding is in line with general trends identified in wider surveys of sickness absence. In particular, women make up 64% of the Driver and Vehicle Licensing Agency's workforce and nearly twothirds are under the age of 40. Pregnancyrelated sickness is a particular problem for the Agency, accounting for 8% of absences in the year. There is more sickness absence in the lower grades at all agencies, although this sometimes skipped the lowest grade, but there are no discernable problems by age band.[22]

14. The nature of the work undertaken by driving examiners may be a factor in the high levels of sickness absence at the Driver Standards Agency: 7,984 out of a total of 1,988,046 tests were terminated in 2006 in the interests of public safety (0.4% of all tests); and there were 24 physical assaults on staff and 312 verbal assaults.[23] Around 80% of the Agency's staff are driving examiners, each of whom carry out some 35 tests a week with novice drivers. Few workrelated injuries, however, have been due to the poor standard of driving test candidates. In 2005, the Agency's staff were involved in 828 incidents during driving tests, half of which involved only damage to the car. Medical treatment was required in 124 incidents, of which 10 involved serious injuries.

15. It is difficult for the Agency to predict how accidents might occur but it has now introduced arrangements to investigate fully the circumstances surrounding each test where accidents occur and to learn lessons where appropriate.[24] The Agency also recorded 8,478 days lost due to musculoskeletal injuries in 2006, equating to over three days absence for each employee and a much higher rate of musculoskeletal injuries than elsewhere in the Department. The Agency does not know what proportion of these absences is attributable to its work and considers that analysing the causes of sickness absences may not always be straightforward since, for example, workrelated incidents may exacerbate preexisting conditions.[25]



© Parliamentary copyright 2007	Prepared 20 November 2007