- The States will need to employ more consultants to deal with £60m of job cuts, says Treasury Minister
- Senator Alan Maclean told a Scrutiny panel that outside help would be needed
- States are facing a shortfall of £125m by 2019 unless savings are made
- Are consultants worth the money? Take part in our poll below
MORE consultants and specialist staff may need to be taken on if the States is to achieve the required £60 million of job cuts in the public sector, the Treasury Minister has said.
Answering questions from the Corporate Services Scrutiny Panel, Senator Alan Maclean said that it was ‘probable’ that help from outside would be required in order to carry out a programme of change.
In February local businessman Kevin Keen was appointed to identify efficiencies, together with two other UK-based consultants, Sir David Henshaw and Elizabeth Astall.
It was recently revealed that the States was facing a predicted shortfall of £125 million by 2019 unless savings are made.
According to information supplied to the JEP under a Freedom of Information request, a total budget of £16.3 million has been set aside for public sector reform from 2012 until the end of this year. To date, nine companies or individual consultants have been taken on, with total consultancy fees paid of £1.53 million for eleven separate projects.
During the Scrutiny hearing, panel chairman Deputy John Le Fondré asked the Treasury Minister how the consultants’ advice would be put into practice and not just be paid ‘lip service’, adding: ‘Do you think we have the necessary experience and drive to achieve that change without outside assistance?’
Senator Maclean said that given the ‘massive’ change programme, there needed to be investment up-front in order to do the job properly and make sure it was properly managed. ‘It is probable that we will have to bring in outside assistance,’ he said.
‘You can have the best plan in the world, but the implementation is ninety per cent of it.
Some of the £60 million savings would involve a significant level of pay ‘restraint’, he said, as well as staff not being replaced, voluntary redundancy and then compulsory redundancy.
Asked whether Jersey’s public sector reforms could match a six-month timetable set by the UK, the minister said he preferred not to make direct comparisons. ‘We need to see clear targets … we’ve got to be bold and radical. If laws need to be changed, they need to be changed,’ he said.
‘Resources will be required and some people in the community will find these things difficult, but we are talking about a shortfall in income.’
Senator Maclean said that he believed spending money on consultants and specialised staff to carry out work such as redesigning departments was ‘fully justified’. ‘It is extraordinarily difficult to effect change without outside advice,’ he said.
Asked about the timescale, the minister said that an update would be provided to the panel prior to the lodging of the Medium Term Financial Plan on 30 June.
The States Employment Board recently announced a pay freeze for all States workers except nurses and midwives, who will get a 0.4 per cent rise. Public sector unions recently wrote to the SEB to formally rejected the offer and have called for a meeting with the board.
STATES departments spent more than £7.5 million on consultants and specialists from January 2013 to April 2014, it was revealed last year.
- Information supplied by the States finance director following a request from the JEP showed that more than £4.2 million was paid to consultants, architects, surveyors, project managers and engineers working on capital projects, including States housing refurbishments, St Martins School, improvements to the prison, hospital services and police relocation.
- A further £3.3 million was paid to consultants out of the general revenue used for day-to-day operational expenditure, with nearly £1 million paid out in (non-itemised) transactions of less than £10,000.
- Some of the highest fees were paid to engineers (£587,944) for highways design, consultants working on the Phillips Street shaft and Ann Court extension (£384,038), IT consultants working on the States e-government project to move systems online (£275,000), and management support and engagement workshops organised by the Chief Ministers Department (£187,588).
- Of the £3.3 million paid from revenue expenditure, the Chief Ministers Department spent £500,000 on consultants fees for items which included a £17,500 placement fee, £28,325 on reform programme benefits, and a £33,798 annual fee for population control, consultancy and system development.
- In the first three months of this year the States Assembly paid consultants £130,000 for advice and panel costs connected to the historical child abuse inquiry, plus £127,000 for advice for Scrutiny reviews.[/breakout]
[breakout title=”Kevin Keen – a consultant with a healthy track record of success:”]
[figure caption=”Kevin Keen at Jersey Post” title=”_MH37667″ align=”none” url=”/news/2015/02/20/business-guru-drafted-in-to-fix-states-finances-how-would-you-make-savings/_mh37667/” id=”1140331″ size=”100″]
Former JEP business editor Christine Herbert spoke to Kevin Keen after his appointment last summer to oversee Visit Jersey the replacement company for Jersey Tourism.
WHAT do you call a man who takes on failing businesses and puts them back on track?
A troubleshooter?
A hatchet man?
No, certainly not a hatchet man Kevin Keen is far too genial for that.
[figure caption=”Le Riches Stores: (left to right) Kevin Keen, Tony Reed, and William McCurdy” title=”730266″ align=”none” url=”/news/2015/02/20/business-guru-drafted-in-to-fix-states-finances-how-would-you-make-savings/attachment/730266/” id=”1140337″]
In his role at Visit Jersey, Mr Keen took on possibly the biggest challenge of his 40-year career, which has already spanned accountancy, retail (Le Riches), agriculture (Jersey Dairy) and, most recently, Jersey Post.
Its odd, because according to one of those psychometric tests, Im someone who hates change, he remarks, settling into one of the low chairs in the hotel foyer. I actually like to do things my own way. I know it sounds soft, but I do like a cause, not just a challenge something I can put my heart into.
Jersey Dairy, for example, was in a bit of a pickle before he came along (I was sorry to see it in such a mess), and Jersey Post was much the same.
Three years on, he says, the Islands postal service is making a profit, customers are happy, staff are happy.
At the start, they said people werent writing letters anymore and we were all doomed but the number of parcels was growing. Its about having a positive attitude.
So why move on now?
I think in these jobs, it is not right for the business to stay too long. I try to get the business stable and find a good person to take over.
I thought Id probably have the summer off Ive been working for 40 years.
But then a friend working on the Visit Jersey report asked him what he thought of the idea.
I sort of proposed myself, he explained. It needs someone to get the job done. It isnt fair to the staff or the industry to keep them waiting around.
[figure caption=”Kevin Keen oversaw a revamp of Jersey Dairy” title=”snd_AIG_2287″ align=”none” url=”/news/2015/02/20/business-guru-drafted-in-to-fix-states-finances-how-would-you-make-savings/snd_aig_2287-2/” id=”1140341″ size=”100″]
I think Im good at listening, understanding peoples concerns and finding a way through.
Its fair to say that disbanding a long-established government department and restructuring it as a private enterprise would not be everyones cup of tea, particularly as job changes are likely to be on the cards.
Ive been lucky enough to get such interesting projects. I can be my own boss, run my own business, work with some nice people. Im really lucky.
So how does he go about any new task?
I normally try to listen first. I have talked to people in the department already. I try to understand their concerns, and I know that they will have something valuable to add. Then I look at the numbers and put down some ideas and look at what the board have done already. It really isnt rocket science.
[figure title=”DSC_0034″ align=”right” url=”/news/2015/02/20/business-guru-drafted-in-to-fix-states-finances-how-would-you-make-savings/dsc_0034-10/” id=”1140335″]
He has learned a lot along the way, not least from Martin Bralsford, former chief executive at Le Riches. He told me that when it comes to decisions about people, you must make the right decision for the business. Do not fudge that. Deal with each person as sympathetically and generously as possible, but be ruthless about the business. Firing people is horrible, and I always try to respect people, but if the business should disappear, no one will have a job. I still see people in the street and pass the time of day with them. They dont take it personally if they are treated with respect. He refers to one Jersey Post staff member who came up with the suggestion of looking in on elderly people during the rounds a practice that has proved to be a winner. This chap was bright, in his 50s, he had been working in the UK in medical research but coming back to Jersey he had no job. He was working in bulk mail, basically dragging bags of mail. I never judge people by what they are doing every day. I think they have loads of good ideas. I always found, just talking to the posties, they knew what the problem was, but no one would listen to them. Sometimes people make a life choice of job, but that does not mean they are stupid. In the end its about treating people as adults.[/breakout]
