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MGS consultation - planning round 2009 (PR09)

The document below is the formal consultation document from MGS management on their proposals to achieve the savings required of them under PR09.

These are being distributed as widely as possible for two reasons:

a) to ensure that, as part of the consultation process, every member can have their say on these proposals.

b) to counter recent rumours from at least one group manager about possible job losses and staff having to be placed on the redeployment pool.

If you have any comments on this, can you please email Steve Robinson the PCS MGS lead at DESHROps-PCS-AGS@mod.uk. Alternatively you can call Steve on 030 679 30355

 

 

 

MINISTRY OF DEFENCE GUARD SERVICE TRADE UNIONS CONSULTATION
PLANNING ROUND 2009(PR09) – PROPOSED PLANS TO ACHIEVE REDUCED FINANCIAL TARGETS

CONSULTATIVE DOCUMENT

INTRODUCTION

1. Colleagues are aware from informal briefings of the demands of PR09 to achieve reduced financial targets in-year and in the remaining three years of the PR. The Ministry of Defence Police & Guarding Agency(MDPGA) has been directed to cut 4.8% from its Resource Control Total(RCT) in-year and 11.6% from its RCT in each of the remaining three years of the PR. The aim of this document is to set out the proposed plan for achieving these cuts from the RCT of the Ministry of Defence Guard Service(MGS). It forms the basis for formal consultation with the PCS, Unite and the GMB on the proposals.

2. This Consultative Document(CD) is also being distributed to MGS management to give them the opportunity to comment, as only Regional Managers have so far been privy to the proposals in full.

BACKGROUND

3. The Department, in common with other Departments of State, is having to make cuts in its budget. The effect of this in PR09 is that the Agency has been directed to cut 4.8% from its RCT in-year (Financial Year 2009/2010(FY09/10)) and 11.6% in each of the three remaining years of the PR (FY10/11, 11/12 & 12/13). The MGS must take its portion of the cuts and the solution must be durable as the new, lower RCT for PR09 will be the start point for PR10 and so on. Thus, the cuts made now will endure for the foreseeable future. Please note that repayment tasks, such as the Trading Funds(TFs) and United States Visiting Forces(USVF), are not included in this situation because they pay hard cash annually for the services that the Agency provides.

4. Funding for the MGS comes to the Agency effectively in two parts, directly funded and indirectly funded elements. Direct funding comes directly to the Agency from the CTLB and pays for Regional Managers, CSO1 London, Area Managers, associated supporting staff and portfolio HQ staff at Wethersfield, including HdUG and HOP. Indirect funding comes to the Agency, via the CTLB, from the TLBs whose sites and establishments we guard. This money pays for Group Managers and all CSO4s/5s. The PR09 percentage cuts must be made from both direct and indirect inputs to the RCT. An early point to note is that the MGS has no overtime budget; all of our overtime is funded from the salaries of gapped posts.

5. Staff costs account for a fraction over 98% of the MGS RCT. It is clear, therefore, that the majority of the PR09 cuts will have to come from money allocated to staff costs. To make the cuts required of us, there has been no time to develop fully coherent solutions. However the proposed plan described here maintains an organisational structure that can continue delivering the business while developing a more coherent, longer-term plan for the whole organisation. The possibility of competition with commercial guard forces has not receded and we must continue to improve the efficiency of our delivery of security, even at a time when we are having to reduce the level of tasking. The TLBs have had sight of the proposed plan through the Owner’s Advisory Board and, while acknowledging the imperative to cut, are predictably wary of the effect on their security risk.

PROPOSED PLAN

6. The proposed plan is at Annex A and takes account of both direct and indirect cost elements. It exposes cash amounts to be cut and how it is proposed to achieve them.

TIMESCALE FOR IMPLEMENTATION

7. Final decisions will not be made before the consultation has been completed. In tandem with consultation, the Agency Owner will bring to the attention of the Defence Operations Board the increased Departmental security risk inherent in any plan to make cuts of the required depth and at the necessary speed.

8. In order to begin making the cuts, it is likely to be necessary to introduce a freeze on overtime working in early August 2009. While this is not strictly a matter for formal consultation, the effect of the proposed plan on overtime working is included in the CD.

9. You will appreciate the urgency of the situation and the priority that must be afforded to this work. I would welcome your views on the proposed plan, therefore, by not later than 26 August 2009 (30 working days). I invite colleagues to continue the informal discussions that have preceded this CD on an as required basis, so that points can be raised and explored as quickly as possible.

CONCLUSION

10. PR09 is making severe demands for financial cuts across the Department. The MGS has been directed to make cuts to its RCT and it is incumbent upon us to do so. The proposed plan is difficult and incoherent in its effects on the delivery of unarmed guarding but it does preserve an organisational structure capable of developing a more coherent plan for the medium to longer term.

11. I look forward to receiving your comments on the proposed plan for the MGS.


Yours sincerely,

Sandy MacCormick

ANNEX A TO
D/MDPGA 23/2/10/5
DATED 14 JULY 2009

PR09 CUTS TO MGS RCT – PROPOSED PLAN

1. The proposed plan to make the required cuts in the MGS PR09 RCT, for both directly and indirectly funded elements, follows. A key point is that the treatment of redeployment pool and redundancy costs has not been made clear by the Centre, and no provision is made for them in the plan. If there is no central provision for these costs, the savings identified below will be substantially at risk.

DIRECTLY FUNDED

2. The specific measures proposed to achieve the necessary cuts, often by reducing staff numbers, form part of a wider plan involving the re-alignment of existing regional and area boundaries and some other management revisions and adjustments that do not affect the amounts of money saved.
3. In-year. The amount of the in-year cut is £120k. I propose to achieve this by:
a. Not recruiting the already funded B2 and C2 for the competition team, a cut of £105k. I have counted this as an in-year saving only, against the possibility, even likelihood, that Phase 2 of the Business Improvement Programme will require the posts to be filled at a later stage.
b. The remaining cut of £15k will be applied as a RCT reduction for the Regions, with the caveat that it is to be found from the T&S line only. The risk that T&S funds will run out before the end of the FY is accepted but is treated by knowledge of the cut by Regional Managers and their resultant management of that activity.
4. Years 2-4. The amount of the subsequent year cut is £480k per annum. I propose to achieve this by (capitation rates are at FY10/11 prices, assuming a 2.5% salary uplift):
a. Changing the boundary between Regions 2 & 3 by transferring the current Region 2, Area 5 (Area HQ Colchester) to Region 3.
b. Revising the management structure of the smaller Region 2 by cutting 1 x Area Manager post but using the headroom to create 1 x CSO2 operational support manager in the Regional HQ – cost neutral.
c. Revising the management structure of the expanded Region 3 to eliminate area manager posts, while creating a CSO2 operational support manager post in the Regional HQ. Manage the region’s group managers centrally. This will cut 2 x CSO2 posts – £78k – and a total of 6 x E1 posts (costed below).
d. Cut 1 x CSO2 post in Region 1 - £39k.
e. Cut the CSO1 London post when the incumbent vacates the post - £53k.
f. Cut 1 x CSO2 post in London (already the subject of separate Regional consultation) but use the headroom to fund 1 x CSO2 operational support manager in the Regional HQ – cost neutral.
g. Cut a total of 91/2 admin support posts (including the 6 in Region 3 mentioned above) across the organisation - £235k.
These measures cut some £405k per annum. To make the remaining £75k, it is attractive to seek to cut T&S. However, the reality is that wider spans of command, particularly for CSO2s, will require more travel, so that containing spend within the existing allocation will be a sufficient challenge. Instead, therefore, I propose to:
h. Cut CSO3 out of hours checks, thereby not incurring the present level of overtime expenditure to the value of - £75k.
5. There is an operational risk that the centralised management of group managers that is a part of the proposed plan for Region 3 will not be effective. However, I consider it to be the least bad option available and, as well as achieving the required cuts, it could act as a trial for potential roll out elsewhere in the organisation, if it were successful. Cutting CSO3 out of hours checks also carries an operational risk – of a loss of quality assurance – but I have decided that it is preferable to cutting further CSO2 posts at this stage. It may not prove necessary to cut all such spend – for example if the competition B2 & C2 posts continue not to be filled early in Year 2.
6. I consider that this proposed plan is likely to achieve the required cost cuts while maintaining the most flexible posture possible from which to develop a future re-organisation of the whole management structure, and not impinge on existing elements of the Business Improvement work (eg the alternative roster trial). The steps needed to implement my proposal (indeed, any plan that is adopted) must begin as soon as possible if the Year 2 cuts are to be achieved. I would seek to develop a communications plan in conjunction with you.

INDIRECTLY FUNDED

7. The precise measures necessary to achieve the whole Agency RCT cut are not yet certain, as they depend on other work that is ongoing. However, it is possible to indicate the likely level of cuts that the MGS will be required to achieve. The size of the amounts involved severely limit the options available to a budget such as that of the MGS, over 98% of which is in pure staff costs. The indicative in-year cut is £5.5M, and the indicative Year 2-4 cut is £13.25M per year.

8. The proposed plan to deal with this part of the cuts is the same for in-year and subsequent years. The MGS is heavily underborne against its funded strength (currently some 370) and there is a constant effort to recruit into the gapped posts. I propose to stop recruitment into the gapped posts and to take the money in the budget for the salaries as the cut. The present level of underbearing is some 9.6% (this is a snap-shot but there is unlikely to be a wide variance from that figure), therefore in Years 2-4 it will be necessary to extend the freeze on recruitment to posts that become vacant as staff retire or leave for whatever reason, until the point at which the target cut (11.6%) is achieved. Thereafter, recruitment will recommence to service the new funded complement.

9. The MGS budget does not contain provision for overtime working. Overtime work is paid for from the money bid for and provided for the gapped posts. It follows, therefore, that an effect of the proposed plan will be to remove money hitherto available to pay for overtime, resulting in a cessation of overtime working. TLBs have been exposed to this effect and have been advised that they must re-examine their tasking requirements to reduce them commensurately. A number of TLBs have already begun their planning in this respect. It is acknowledged that there will always be an irreducible minimum requirement for overtime working; I will be seeking the introduction of a small overtime budget in the future RCT.

10. In the timeframe for PR09, the gaps will be taken where they currently lie. This will undoubtedly lead to incoherent tasking reductions and an increase in the Department’s security risk. However, while the proposal will have the effect of reducing the size of the MGS by approximately 11.6%, it will also, potentially, have the effect of forcing the harmonization of staffing levels, money and tasking.

 

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