Session 2007/2008

Seventh Report

Public Accounts Committee

Report on
Job Evaluation in the
Education and Library Boards

Together with the Minutes of Proceedings of the Committee relating
to the Report and the Minutes of Evidence

Ordered by The Public Accounts Committee to be printed 24 January 2008
Report: 18/07/08R Public Accounts Committee

PUBLISHED BY AUTHORITY OF THE NORTHERN IRELAND ASSEMBLY
BELFAST: THE STATIONERY OFFICE
£11.50

Public Accounts Committee
Membership and Powers

The Public Accounts Committee is a Standing Committee established in accordance with Standing Orders under Section 60(3) of the Northern Ireland Act 1998. It is the statutory function of the Public Accounts Committee to consider the accounts and reports of the Comptroller and Auditor General laid before the Assembly.

The Public Accounts Committee is appointed under Assembly Standing Order No. 51 of the Standing Orders for the Northern Ireland Assembly. It has the power to send for persons, papers and records and to report from time to time. Neither the Chairperson nor Deputy Chairperson of the Committee shall be a member of the same political party as the Minister of Finance and Personnel or of any junior minister appointed to the Department of Finance and Personnel.

The Committee has 11 members including a Chairperson and Deputy Chairperson and a quorum of 5.

The membership of the Committee since 9 May 2007 has been as follows:

Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Jonathan Craig
Mr John Dallat
Mr Simon Hamilton
Mr David Hilditch
Mr Trevor Lunn
Mr Ian McCrea*
Mr Patsy McGlone
Mr Mitchel McLaughlin
Ms Dawn Purvis

* Mr Mickey Brady replaced Mr Willie Clarke on 1 October 2007
* Mr Ian McCrea replaced Mr Mickey Brady on 21 January 2008

List of abbreviations used in the Report

List of Abbreviations used in the Report

Boards	Education and Library Boards
The Department	Department of Education
C&AG	Comptroller and Auditor General
NDPBs	Non Departmental Public Bodies
GLWC	Greater London Whitely Council
GLPC	Greater London Provincial Council
LRA	Labour Relations Agency
ESA	Education and Skills Authority
ICT	Information and Communications Technology

Executive Summary

Inadequate Planning Undermined the Job Evaluation Scheme

1. In 1991, the Department of Education (the Department) decided to take action to deal with difficulties that were being experienced in relation to grading and equal pay matters in non-teaching posts in the Education and Library Boards (Boards). It was decided to introduce a job evaluation scheme in the Boards to cover all non manual staff posts and this was later extended, under a Single Status Agreement, to cover all manual posts.

2. Implementation of the job evaluation scheme followed a pilot exercise in 1994. However, this exercise was later found to be fatally flawed. It projected that 10 – 15% of posts would be upgraded while, in the event, 56% of non manual workers and almost all manual workers were upgraded. At the same time the exercise failed to cover the planned sample of cases and also did not include a sufficient spread of jobs and grades to be properly representative of the numbers of staff involved. As a result, the scheme started on the basis of ill informed assumptions about affordability.

3. Effective project management arrangements were not established at the outset of implementation of the scheme and it appeared to the Committee that the whole process lacked the interest and attention of the Department. For the future, the Committee proposes that robust project management arrangements must become a feature of any other job evaluation schemes with a strong emphasis on the checks and balances that should normally apply in such projects, for example, explicit timescales, targets and monitoring and reporting schedules.

4. The Boards were remiss in ignoring good practice stemming from other job evaluation schemes which was aimed at ensuring that changes in the way job gradings were established was delivered with the minimum disruption. The Committee is concerned by the Department’s failure to insist that the Boards should establish a centralised unit to oversee implementation and that generic job descriptions should form the heart of the evaluation procedure.

The Scheme has Taken Over a Decade to Implement

5. The Committee is critical of the failure to apply generic job descriptions in undertaking job evaluations in the initial stages. It considers that this lapse was a pivotal factor in the subsequent protracted nature of the scheme’s implementation. The Committee was also shocked to learn from the Department that a key constraint on the use of generic descriptions, initially, was the capacity of its 90 evaluators to manage this form of evaluation, particularly since they were combining the evaluation role with their normal day to day duties.

6. While the job evaluation scheme applies across the Boards and the Library Service, the outcome of the process has not translated into uniformity. On the contrary, the approach to implementation has led to considerable variations in the level of job upgrades agreed between Boards. While variations can reflect the interplay of a number of factors, the Committee would have expected a greater degree of consistency in upgrades.

7. The disparities appeared to the Committee to be indicative of a shortcoming in the way the Department had allowed similar services to develop differently across the Boards. Lack of consistency beyond Board boundaries has the potential to cause difficulties, particularly as the education service moves towards the establishment of the new Education and Skills Authority (ESA) and Northern Ireland Library Authority.

The Independence of Evaluation and Appeals Panels

8. The Committee has some specific concerns about the independence of the conduct of the job evaluation process because the evaluation and appeals panels included Board staff who were effectively evaluating their colleagues. In particular, the Committee was shocked to discover that a member of senior management in the South Eastern Board had represented payroll staff who appealed the outcome of their evaluations. The Accounting Officer acknowledged that this was a matter of deep concern. In drawing lessons for the future the Department must ensure that sufficient independence and objectivity exists in the process.

There was Ineffective Financial Management

9. The costs of pay reform under the job evaluation scheme have been extremely high and have absorbed a significant proportion of the monies allocated to education services in recent years. Despite this, the Committee was astonished to find that implementation of the scheme had proceeded in the absence of any detailed costing as to its likely impact, nor had the Department developed a robust business case. In the Committee’s view, there was no excuse for failing to put in place proper financial management measures at the start of such a scheme in order to retain control of the substantial resources being allocated and to minimise the impact on other services.

10. While the Committee accepts the view of the Department that it was not possible to attribute the current financial difficulties of the Boards to any one factor, the Committee remains convinced that given the proportion of funding absorbed by the costs of the job evaluation scheme, the process must have contributed in a significant way to the deficits in the Belfast and South Eastern Boards as well as placing additional pressure on Northern Ireland Block funding.

There was Insufficient Linkage to Productivity and Efficiency

11. Seeking efficiencies through workforce redesign is complex. However, the Committee was given no indication that the Department had tried to harness the potential of the job evaluation scheme for this purpose as originally intended. However, the Committee acknowledges that the generation of long-term savings is now part of the process of moving towards the establishment of the new library and education and skills authorities. In the Committee’s view the Department made a serious mistake at the outset by failing to ensure that job evaluation was consistent with the achievement of efficiencies.

Weaknesses in Departmental Oversight

12. The Committee is disappointed that the Department appeared to have been asleep when it came to strategic oversight of the scheme, particularly in the early stages. The Department clearly operated in a laissez faire manner in its control of the Boards. At the outset, the Department should have insisted on the following:

application of best practice from elsewhere;
independent staff inspections and organisational reviews in support of job evaluation;
generic evaluations;
maximum independence in the composition of evaluation and appeals panels;
standard pay and grading across the five Boards; and
that the project was resourced with the relevant skill sets in terms of project management, financial management, professional human resource expertise and skilled negotiators.

Summary of Recommendations

Inadequate Planning Undermined the Job Evaluation Scheme

1. The Committee recommends that, where a methodology such as a pilot exercise is being heavily relied on to provide an indication of the outcome of a particular scheme, and to inform key decisions about the scheme, there is a particular onus on the Department to ensure that it is properly specified and carried out and that the results are thoroughly assessed before a final decision is made to proceed (see paragraph 7).

2. The Committee considers that one of the main lessons to be learned from the implementation of this scheme, for other major exercises in the future, is the importance of strong project management from the outset based on clarity about the timescale of the process; the setting of target dates to be achieved; ongoing monitoring and regular reporting and feedback (see paragraph 9).

3. When proven measures and other recommendations including the use of generic job descriptions are available to assist in planning the introduction of a job evaluation scheme it is irresponsible to ignore them. The Committee considers that the wider lesson for departments faced with the management of a similar exercise in the future is that they must avail themselves of any existing good practice lessons from elsewhere and apply these at the earliest possible stage (see paragraph 11).

The Scheme has Taken Over a Decade to Implement

4. The Committee considers it is crucial that, in future, any major exercises such as this should be planned from the start within the context of an agreed timeframe and with clear lines of responsibility established for completion within that timeframe so that staff morale is not affected by long delays (see paragraph 14).

5. It is vital that any remaining inconsistencies in pay and grading between the five Boards are dealt with quickly, decisively and fairly when the new Education and Skills Authority comes into being. In the Committee’s view, these are the types of issues which, if allowed to fester, given the negative impact they can have on productivity and morale, have the potential to wipe out the benefits of public sector mergers (see paragraph 17).

6. The Committee recommends that, give the scale of the proposed Education and Skills Authority, its senior management team should include a top class Human Resources professional with a proven track record in building a harmonious industrial relations culture and a highly motivated workforce in a large organisation. Our education service simply cannot afford a further breakdown in industrial relations of the magnitude of the classroom assistants dispute (see paragraph 18).

The Independence of Evaluation and Appeals Panels

7. The Committee recommends that fully independent members with no trace of vested interest in the outcome should have the majority of seats on evaluation and appeals panels (see paragraph 22).

8. The Committee recommends that guidance should be incorporated into the scheme to clarify the rules on representation and to prevent any future misunderstandings. The Committee also believes that, in order to achieve greater independence in appeals panels, there must be increased awareness that the involvement of staff that have connections work related or otherwise to the appellants can undermine the integrity of the process (see paragraph 25).

9. In agreeing any future job evaluation arrangements departments should ensure that they make use of skilled negotiators to ensure that a fair balance is struck between the interests of taxpayers and employees (see paragraph 27).

There was Ineffective Financial Management

10. The Committee urges the Department to ensure that, in future, the financial impact of major schemes is assessed and planned for at the outset. The Committee also recommends that regular review and monitoring measures are put in place to facilitate proper financial control by the Department (see paragraph 30).

11. The Committee must insist on closer Departmental monitoring of the Boards operations to ensure that there are no more surprises in store which could have serious implications not only for the Department itself but also for the wider Northern Ireland Block Funding. This would help to ensure that it becomes aware of forthcoming major financial commitments in sufficient time to properly plan and control the resources required (see paragraph 36).

12. The Department must ensure that the new Education and Skills Authority adheres to the highest standards of financial management from the outset (see paragraph 37).

There was Insufficient Linkage to Productivity and Efficiency

13. The Department needs to be much more alive to the potential for achieving efficiencies. The Committee recommends that challenging and efficiency targets are set. The Committee would like a progress report on this in twelve months time (see paragraph 41).

14. The Committee considers that it is crucial in the run up to the establishment of ESA that the Department makes it a priority that proper consideration is given to the required staffing levels and grade structures to ensure that these are appropriate and not excessive from the start and that they are constantly challenged. This, in the Committee’s view, is absolutely critical to the success of this major change (see paragraph 43).

15 The Committee recommends that the Department ensures that sufficient meaningful benchmark data is obtained for the ESA in order to provide confidence that resources are being used to the best effect. They should formally benchmark the cost of back office functions with education authorities elsewhere and report back to the Committee in twelve months time (see paragraph 45).

Weaknesses in Departmental Oversight

16 In any future major schemes, the Department, as the ultimate paymaster, must establish and maintain an effective system of oversight controls over the operation of the process within its non departmental public bodies (NDPBs). The Committee is not calling for micro management of the NDPBs activities. What is needed is the application of basic strategic controls (see paragraph 47).

Introduction

1. The Public Accounts Committee met on 29 November 2007 to consider the Comptroller and Auditor General’s report: “Job Evaluation in the Education and Library Boards” (NIA 60, Session 2006-07). The witnesses were:

Mr Will Haire, Accounting Officer, Department of Education.
Ms Helen McClenaghan, Chief Executive, Southern Education and Library Board.
Mr David Woods, Director, Strategy, Performance and Accountability Division, Department of Education.
Mr Colin Jack, Director of Culture, Department of Culture, Arts and Leisure.
Mr Kieran Donnelly, Deputy Comptroller and Auditor General.
Mr Ciaran Doran, Deputy Treasury Officer of Accounts, Department of Finance and Personnel.

2. The five Education and Library Boards as non departmental public bodies are funded by the Department of Education under the terms of financial memoranda between them and the Department. In 1991, the Department considered that action was needed to deal with difficulties that were being experienced in relation to grading and equal pay matters in non-teaching posts in the Boards. It decided to introduce a job evaluation scheme in the Boards to cover all non manual staff posts which was later extended, under the Single Status Agreement, to cover all manual posts. This scheme started in 1995 but has still not been completed. At the end of July 2006, around 29,000 posts had been evaluated with just under 1,800 posts still outstanding. Classroom assistants, who number around 7,000, have had their job evaluations completed but the terms of the deal have yet to be fully accepted by the Trade Union side. Significantly more posts were upgraded than originally expected and as a result the cost has been much higher than anticipated. The Department has identified costs to date of £124 million and estimates that it will require a further £5 million to complete.

3. In taking evidence on the Comptroller and Auditor General’s report, the Committee focussed on a number of issues. These were:

the planning and implementation of the job evaluation scheme;
the time taken to complete the scheme and the variations in outcomes between Boards;
the independence of evaluation and appeals panels;
the adequacy of the financial management of the scheme;
the extent to which efficiency and productivity savings were considered as part of the exercise; and
the Department’s oversight of the scheme.

4. The exercise has taken much longer than expected and there have been shortcomings in the way the scheme was managed, particularly in the early years. Although improvements were made several years into the scheme these earlier shortcomings continued to create difficulties for the effective management of the scheme. Many of the problems which arose could have been avoided or their impact minimised if the exercise had been managed properly from the outset and there are clearly lessons to be learned from the handling of this scheme.

Inadequate Planning Undermined the Job Evaluation Scheme

Flawed pilot exercise

5. The implementation of the job evaluation scheme has not been straightforward and has been a bigger and more time consuming task than envisaged. Part of the reason for this rests with the fact that a pilot exercise, which was carried out in order to provide an indication of the likely outcome and cost of the scheme, was seriously flawed. This is starkly illustrated by the discrepancy between the pilot study’s projected level of upgrading of posts of 10 – 15% and the actual outcome whereby 56% of non manual workers and almost all manual workers were upgraded. The Committee has seen no evidence that this level of outcome was planned for or expected.

6. The Department accepted it was naïve to think that the pilot exercise would provide much more than an indication of how the scheme would develop. However, the Committee cannot understand how the Department got things so badly wrong. The pilot was simply not representative of the jobs and grades involved. As a result, the scheme missed an opportunity to start off on the right foot by failing to develop properly informed assumptions about affordability and impact. It was remiss of the Department not to have involved its own professional statisticians in a pilot exercise of this nature which involved substantial financial commitments.

Recommendation 1

7. The Committee recommends that, where a methodology such as a pilot exercise is being heavily relied on to provide an indication of the outcome of a particular scheme, and to inform key decisions about the scheme, there is a particular onus on the Department to ensure that it is properly specified and carried out and that the results are thoroughly assessed before a final decision is made to proceed.

Absence of proper planning

8. The Committee considers that both the Department and the Boards sleepwalked into a scheme with huge financial commitments without establishing an effective project management regime or an accurate assessment of the scheme’s likely impact. The Accounting Officer acknowledged that the project was not planned as it should have been from the beginning. The Department told the Committee that since the establishment of a central management support unit in 2000, considerable strides had been made in putting systems in place to address the shortcomings. However, in the Committee’s view, the poor judgements made early in the process, for example, the decision to adopt individual rather than generic evaluations have had a strong bearing on the very long timescale involved in implementing the scheme.

Recommendation 2

9. The Committee considers that one of the main lessons to be learned from the implementation of this scheme, for other major exercises in the future, is the importance of strong project management from the outset based on clarity about the timescale of the process; the setting of target dates to be achieved; ongoing monitoring and regular reporting and feedback.

Failure to adopt lessons and recommendations

10. The Department told the Committee that the job evaluation scheme was a novel and complex exercise. The Committee considers, however, that the Department contributed to the complexity of the process by not ensuring that the Boards paid heed to the lessons from those bodies that had experience of using similar schemes and the recommendations of the Joint Committee. For instance, when the Boards resisted the establishment of a centralised unit, the Department simply allowed them to set up their own units. Another inexcusable failure was not insisting that generic job descriptions were used in the evaluation process from the start. This would have speeded up the process considerably and made administration much easier. The Department told the Committee that 94% of staff were evaluated on a generic basis. However, even though only 6% of evaluations were done on an individual basis it was these individual evaluations which led to the slow progress in the early years of the scheme. It was not until several years into the scheme that key elements such as the use of generic job descriptions and the setting up of a central management support unit were adopted. In the Committee’s view, the Department could have done much more to exert pressure on the Boards to adopt these measures. As a result, an important opportunity was missed to set the scheme on a more efficient and easier managed path at the outset.

Recommendation 3

11. When proven measures and other recommendations including the use of generic job descriptions are available to assist in planning the introduction of a job evaluation scheme it is irresponsible to ignore them. The Committee considers that the wider lesson for departments faced with the management of a similar exercise in the future is that they must avail themselves of any existing good practice lessons from elsewhere and apply these at the earliest possible stage.

The Scheme has Taken Over a Decade to Implement

Timeframe of implementation

12. In planning for the introduction of the job evaluation scheme the use of generic job descriptions was designed to remove the need to evaluate every job in every organisation. However, the Committee was dismayed to find that, between 1995 and 1999, job evaluations on an individual basis were the norm. It was only from 2000 onwards when the generic approach was adopted that the process speeded up. Although the Accounting Officer told the Committee that the generic based evaluations for the manual staff were subsequently completed within a two year period, it was the use of individual job evaluations in the earlier years which set back progress. The failure to follow the planned approach of evaluation on the basis of generic job descriptions, from the outset, has clearly contributed greatly to the lengthy timescale over which the scheme has been in operation. This, in turn, led to the build-up of huge financial commitments given the decision to backdate the awards for non manual staff to 1 January 1995. The Department told the Committee that a key constraint on the use of generic descriptions, initially, was the capacity of its 90 evaluators, drawn from across the Boards, to manage this form of evaluation. It is unsatisfactory that evaluators were combining the evaluation role with their normal day to day duties. This was an exercise that demanded an injection of professional human resources expertise at the outset.

13. The Committee also has concerns that the Department’s scheduling of the scheme led to headquarters staff being first in line for evaluation at the expense of staff providing a frontline service in our schools. The Committee also observed that in selecting headquarters staff as a priority, these were the very staff whose posts did not lend themselves readily to the application of generic evaluation. A consequence of the wait by other staff has been that in many cases very substantial arrears have had to be paid out and, in one instance, the arrears amounted to £70,000. The Committee feels that it is unacceptable that people should have had to wait up to 12 years to receive their proper entitlement. In effect the Department’s approach cast the die as to the speed with which the process would progress in the early years.

Recommendation 4

14. The Committee considers it is crucial that, in future, any major exercises such as this should be planned from the start within the context of an agreed timeframe and with clear lines of responsibility established for completion within that timeframe so that staff morale is not affected by long delays.

Variations between Boards

15. The Committee was struck by the differences which existed in the levels of upgrading between Boards who are effectively undertaking similar work. The Committee would have expected a degree of consistency in the level of those posts upgraded between the Boards as they are basically carrying out the same roles. For instance, among non manual staff, there was a variation of as much as 15% between Boards in the level of posts upgraded. The Department told the Committee that from 1973, when the Boards were established, until the job evaluation exercise started, none of the Boards had systems to examine the grading and organisation of their work, hence the disparities that arose during the job evaluation process. For example, payroll staff have been graded differently in the different Boards. The Committee saw no convincing evidence as to why payroll staff had been graded differently in each Board.

16. Following the Review of Public Administration, it is envisaged that a new Education and Skills Authority (ESA) and a new Library Authority will assume responsibility for the functions currently carried out by the five Boards. The Department of Education indicated to the Committee that the work carried out on job evaluation would provide a good basis for the proposed ESA to harmonise pay and grading for its staff. However, the Committee is hugely disappointed that, even after the huge expense of the job evaluation process, there remain grading anomalies between Boards, for example, in payroll. The Department should have been much more proactive in insisting that these anomalies were ironed out when the original job evaluation exercise was done.

Recommendation 5

17. It is vital that any remaining inconsistencies in pay and grading between the five Boards are dealt with quickly, decisively and fairly when the new Education and Skills Authority comes into being. In the Committee’s view, these are the types of issues which, if allowed to fester, given the negative impact they can have on productivity and morale, have the potential to wipe out the benefits of public sector mergers.

Recommendation 6

18. The Committee recommends that, given the scale of the proposed Education and Skills Authority, its senior management team should include a top class Human Resources professional with a proven track record in building a harmonious industrial relations culture and a highly motivated workforce in a large organisation. Our education service simply cannot afford a further breakdown in industrial relations of the magnitude of the classroom assistants dispute.

19. The Committee is also of the view that the achievement of a harmonious industrial relations environment and the protection of taxpayers’ interests in the design and operation of job evaluation schemes are not mutually exclusive objectives. It is unfortunate that, in this particular job evaluation exercise, neither objective was achieved.

The Independence of Evaluation and Appeals Panels

20. The Committee asked the Department about the composition of evaluation and appeals panels. The Department said that job evaluation panels are made up of three trained job evaluation officers, one from the Board involved and one from another Board together with the job evaluation officer from the Central Management Support Unit who acts as chairperson of the evaluation panel. Appeals panels are comprised of two trade union nominees and two management nominees, all from Boards other than the one in which the post involved is situated. All will be trained in the operation of the scheme.

21. The Committee is not convinced about the independence of the conduct of the job evaluation process because the evaluation and appeals panels included Board staff who were effectively evaluating their colleagues in other Boards.

Recommendation 7

22. The Committee recommends that fully independent members with no trace of vested interest in the outcome should have the majority of seats on evaluation and appeals panels.

23. The Committee was shocked to discover that a member of senior management in the South Eastern Board had represented payroll staff who appealed the outcome of their evaluations. The Accounting Officer acknowledged that this was a matter of deep concern and assured the Committee that it had taken steps to ensure that it does not happen again.

24. The Committee noted from the Comptroller and Auditor General’s (C&AG’s) report that the chairperson of this re-evaluation panel felt that the scheme was being misused. Although the Department claimed that there were no other similar cases the Committee believes that the way the panels were constituted meant that there must have been potential for wider misuse.

Recommendation 8

25. The Committee recommends that guidance should be incorporated into the scheme to clarify the rules on representation and to prevent any future misunderstandings. The Committee also believes that, in order to achieve greater independence in appeals panels, there must be increased awareness that the involvement of staff that have connections work related or otherwise to the appellants can undermine the integrity of the process.

26. The Department told the Committee that the unions seemed to feel sufficiently confident that the evaluation and appeal system would be fair to staff and that one of the benefits of job evaluation was that there have been no equal pay claims in recent years. The Committee respects the role of the trades unions in negotiating a fair evaluation and appeals system for their members. However, the Department had also a duty to ensure that any arrangements agreed sufficiently protected the interests of taxpayers. The Committee considers that the negotiating skills employed by the trades unions were not matched by an equivalent skills base on the management side.

Recommendation 9

27. In agreeing any future job evaluation arrangements departments should ensure that they make use of skilled negotiators to ensure that a fair balance is struck between the interests of taxpayers and employees.

There was Ineffective Financial Management

Inability to provide actual cost details

28. Implementing a new pay system inevitably incurs costs. Given the need to account for and control these costs and to check actual costs against planned and funded pay changes, the Committee finds it astonishing that neither the Department nor the Boards were able to provide a detailed assessment of the likely costs of implementing the job evaluation scheme. The use, initially, of individual evaluations for headquarters staff led to a situation where it was not immediately apparent what the full financial impact of job evaluation would be or what the impact would be on frontline services. In the Committee’s view, it would have been much better to have selected a large generic group as the first group to be evaluated.

29. The Committee notes that, as far back as 2001, the C&AG had reported his concerns about the Department’s inability to predict the financial consequences of the job evaluation exercise due to the absence of a comprehensive assessment of the overall costs by the Boards. The Department told the Committee that it had adopted a much more proactive approach to financial planning from that time onwards. However, by that time, the Committee considers that it was difficult to get the process back on track and the Committee remains very concerned that the Department failed in its responsibility to ensure that appropriate financial planning measures were in place before the job evaluation exercise started.

Recommendation 10

30. The Committee urges the Department to ensure that, in future, the financial impact of major schemes is assessed and planned for at the outset. The Committee also recommends that regular review and monitoring measures are put in place to facilitate proper financial control by the Department.

The absence of business cases

31. Given the profound impact a job evaluation scheme was going to have on costs and pay relativities, the Committee was disturbed to discover that the Department did not prepare a business case for the scheme at the outset. The Committee has, as a result, no way of knowing whether the additional funding of £124 million currently identified for the scheme represents an under or over estimation of costs. Rather, it appears to the Committee that the job evaluation scheme has consisted of a series of isolated decisions rather than actually being an integrated process: most importantly, job evaluation, financial planning and service planning lacked a sufficiently strong degree of alignment.

32. The Department told the Committee that, whilst the business case has an important place in overall financial control, the job evaluation process itself was not optional and, whatever the costs, these had to be met. It said that the essence of the process was to achieve equal pay for work of equal value and to avoid equal pay claims. However, whether optional or not, in the Committee’s view, there was no excuse for failing to put in place proper financial management measures at the start of such a scheme in order to retain control of the substantial resources being allocated and to minimise the impact on other services. The Committee was astounded that the Department took the “hands off” view that, as the Boards are autonomous employers, they were primarily responsible for the implementation of the job evaluation scheme. As the ultimate paymaster of the scheme, the Department has to take responsibility for approving annual spending plans and for any shortcomings in the financial management.

Overspends in two Boards

33. The Committee is particularly concerned that the Department failed to integrate the job evaluation scheme with a proper process of financial planning. The most obvious manifestations of the failure of this approach were the significant overspends experienced in the Belfast and South Eastern Boards from 2003-04 onwards.

34. Although the Committee accepts the Department’s view that a variety of factors contributed to the overspending in these Boards it is evident that lack of control over job evaluation costs was a major source of financial pressure. The 2005 Inquiry (the Jack Report) into the Financial Management in the Belfast and South Eastern Boards was crystal clear on this. The Report noted that “there appears to have been a failure to attempt to make even crude estimates of the possible effect of pay related changes”. It goes without saying that standards of financial management in certain parts of the education sector were far below acceptable standards.

Impact on Northern Ireland Block Funding

35. The failure to predict the financial impact of job evaluation not only contributed to the deficits in the two Boards but must also have led to considerable pressure on the Northern Ireland Block with money needing to be withdrawn from other areas at short notice to fund these unpredicted costs. The Committee finds it unacceptable that poor financial planning on the part of one Department should have an unplanned impact on other public services.

Recommendation 11

36. The Committee must insist on closer Departmental monitoring of the Boards operations to ensure that there are no more surprises in store which could have serious implications not only for the Department itself but also for the wider Northern Ireland Block Funding. This would help to ensure that it becomes aware of forthcoming major financial commitments in sufficient time to properly plan and control the resources required.

Recommendation 12

37. The Department must ensure that the new Education and Skills Authority adheres to the highest standards of financial management from the outset.

There was Insufficient Linkage to Productivity and Efficiency

38. It was originally envisaged that the job evaluation scheme would take place in the context of a staff inspection and organisational review regime aimed at securing efficiencies. It is reasonable to expect that clear plans to achieve those benefits should have been an integral part of the implementation process from the outset. However, the Committee was presented with no evidence that the Department had integrated implementation of the scheme with priorities for efficiency savings. £124 million (see paragraph 2) is a very substantial amount of money yet there is no evidence to assess, within the Department, whether any anticipated savings were achieved from this level of expenditure. The Committee considers that, if job evaluation had been locked into an efficiency process from the start, some of this £124 million may not have been required and would therefore have been available for other services.

39. In the Committee’s view, it was a serious dereliction of duty that the Department was prepared in effect to sign blank cheques for pay increases while overlooking the need for related efficiencies. The Committee also notes, from the C&AG’s report, that there was a 14% increase in headquarters administration staff numbers between 1999-00 and 2005-06. The Department accepts that an efficiency unit should have been in place throughout the job evaluation process and that efficiencies should have been identified from the outset.

40. Over the period from 1998-99 to 2005-06 there was a significant increase in expenditure in non-teaching staff. This area of expenditure seems to have been out of control – an 88% increase over this period is remarkably high. Given the scale of the job evaluation exercise and the level of funding involved, the Committee is extremely disappointed that the process did not include a proper efficiency dimension.

Recommendation 13

41. The Department needs to be much more alive to the potential for achieving efficiencies. The Committee recommends that challenging and efficiency targets are set. The Committee would like a progress report on this in twelve months time.

Moving towards the operation of the Education and Skills Authority (ESA)

42. The creation of a single ESA of course provides an opportunity to rationalise back office functions, secure efficiency savings and free up additional resources for front line services. In the Committee’s view, the opportunity here must be substantial given the lack of any hard focus on efficiency issues over the past decade. The Committee welcomes the assurance by the Accounting Officer that he will be emphasising to the chief executive designate of the new ESA that it is essential for an efficiency unit to be in place, right from the beginning, to examine staffing issues and ensure that efficiencies are being made.

Recommendation 14

43. The Committee considers that it is crucial in the run up to the establishment of ESA that the Department makes it a priority that proper consideration is given to the required staffing levels and grade structures to ensure that these are appropriate and not excessive from the start and that they are constantly challenged. This, in the Committee’s view, is absolutely critical to the success of this major change.

There is a need to benchmark administration costs

44. The Committee considers that the Department has been failing, over the years, to properly challenge the Boards about the comparative unit costs of delivering different services and also in developing a structured process of benchmarking. In the Committee’s view, there is a clear need for the Department to undertake benchmarking exercises with other education bodies in order to ensure that the Boards, and, in the future ESA’s, administration costs are not excessive. The Department told the Committee that it had not done any benchmarking of the Board’s central overhead costs with education authorities in England or Scotland because their services are processed and integrated differently. It did accept, however, that this should be a key part of the process as we push forward to the establishment of ESA.

Recommendation 15

45. The Committee recommends that the Department ensures that sufficient meaningful benchmark data is obtained for the ESA in order to provide confidence that resources are being used to the best effect. They should formally benchmark the cost of back office functions with education authorities elsewhere and report back to the Committee in twelve months time.

Weaknesses in Departmental Oversight

The Department adopted a “hands off” approach in the implementation of the scheme

46. The Committee is disappointed that the Department appeared to have been asleep when it came to strategic oversight of the scheme, particularly in the early stages. The Department clearly operated in a laissez faire manner in its control of the Boards. At the outset, the Department should have insisted on the following:

application of best practice from elsewhere;
independent staff inspections and organisational reviews in support of job evaluation;
generic evaluations;
maximum independence in the composition of evaluation and appeals panels;
standard pay and grading across the five Boards; and
that the project was resourced with the relevant skill sets in terms of project management, financial management, professional human resource expertise and skilled negotiators.

Recommendation 16

47. In any future major schemes, the Department, as the ultimate paymaster, must establish and maintain an effective system of oversight controls over the operation of the process within its non departmental public bodies (NDPBs). The Committee is not calling for micro management of the NDPBs’ activities. What is needed is the application of basic strategic controls.

Appendix 1

Minutes of Proceedings of the Committee Relating to the Report

Thursday, 29 November 2007
Senate Chamber, Parliament Buildings

Present:
Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Mickey Brady
Mr Jonathan Craig
Mr John Dallat
Mr Simon Hamilton
Mr David Hilditch
Mr Trevor Lunn
Mr Patsy McGlone
Mr Mitchel McLaughlin
Ms Dawn Purvis

In Attendance:
Mrs Cathie White (Assembly Clerk)
Mrs Gillian Lewis (Assistant Assembly Clerk)
Mrs Nicola Shephard (Clerical Supervisor)
Mr John Lunny (Clerical Officer)

Apologies: None

The meeting opened at 2.00pm in public session.

3. Mr Beggs declared an interest as his father is Chair of an Education and Library Board.

2.02pm Mr McGlone joined the meeting.

2.03pm Mr Hilditch joined the meeting.

5. Evidence on the NIAO Report ‘Job Evaluation in the Education and Library Boards’

The Committee took oral evidence on the NIAO report ‘Job Evaluation in the Education and Library Boards’ from Mr Will Haire, Accounting Officer, Department of Education (DE), Ms Helen McClenaghan, Chief Executive, Southern Education and Library Board, Mr David Woods, Director, Strategy, Performance and Accountability Division, DE, and Mr Colin Jack, Director of Culture, Department of Culture, Arts and Leisure. The witnesses answered a number of questions put by the Committee.

Members requested that the witnesses should provide additional information on some issues raised during the evidence session to the Clerk.

4.02pm Mr Brady left the meeting.
4.19pm Mr Hilditch left the meeting.

4.24pm The evidence session finished and the witnesses left the meeting.

[EXTRACT]

Thursday, 24 January 2008
Room 144, Parliament Buildings

Present:
Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Jonathan Craig
Mr Simon Hamilton
Mr David Hilditch
Mr Trevor Lunn
Mr Ian McCrea
Mr Mitchel McLaughlin
Ms Dawn Purvis

In Attendance:
Mrs Cathie White (Assembly Clerk)
Mrs Gillian Lewis (Assistant Assembly Clerk)
Mrs Nicola Shephard (Clerical Supervisor)
Mr Ricky Shek (Clerical Officer)

Apologies:
Mr John Dallat
Mr Patsy McGlone

The meeting opened at 2.00pm in public session.

2.02pm Mr McLaughlin joined the meeting.
2.04pm Ms Purvis joined the meeting.
2.22pm The meeting went into closed session.
3.00pm Mr Hamilton left the meeting.

8. Consideration of the Committee’s Draft Report on Job Evaluation in the Education and Library Boards.

Members considered the draft report paragraph by paragraph. The witnesses attending were Mr Kieran Donnelly, Deputy C&AG, Mr Sean McKay, Director of Value for Money, Mr Brian Gardiner, Audit Manager, and Mr Joe Campbell, Audit Manager, NIAO.

The Committee considered the main body of the report.

Paragraphs 1 – 10 read and agreed.
Paragraph 11 read, amended and agreed.
Paragraph 12 read and agreed.
Paragraph 13 read, amended and agreed.
Paragraph 14 read and agreed.
Paragraph 15 read, amended and agreed.
Paragraphs 16 – 17 read and agreed.
Paragraph 18 read, amended and agreed.
Paragraphs 19 – 24 read and agreed.
Paragraph 25 read, amended and agreed.
Paragraph 26 read and agreed.
Paragraph 27 read, amended and agreed.
Paragraphs 28 – 35 read and agreed.
Paragraph 36 read, amended and agreed.
Paragraphs 37 – 38 read and agreed.
Paragraphs 39 – 40 read, amended and agreed.

4.06pm Mr Lunn left the meeting.

Paragraph 41 read, amended and agreed.
Paragraphs 42 – 47 read and agreed.

The Committee considered the Executive Summary of the report.

Paragraphs 1 – 12 read and agreed.

Agreed: Members ordered the report to be printed.
Agreed: Members agreed that the letter from the Accounting Officer, Department of Culture, Arts and Leisure, together with the Chairperson’s letters requesting additional information and Mr Will Haire’s responses would be included in the Committee’s report.
Agreed: Members agreed to embargo the report until 00.01am on 14 February 2008, when the report would be officially released.

[EXTRACT]

Appendix 2

Minutes of Evidence

29 November 2007

Members present for all or part of the proceedings:
Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Mickey Brady
Mr Jonathan Craig
Mr John Dallat
Mr Simon Hamilton
Mr David Hilditch
Mr Trevor Lunn
Mr Patsy McGlone
Mr Mitchel McLaughlin
Ms Dawn Purvis

Also in attendance:

Kieran Donnelly		Deputy Comptroller and Auditor General
Ciaran Doran		Deputy Treasury Officer of Accounts

Witnesses:

Mr Will Haire		Department of Education
Mr Colin Jack		Department of Culture, Arts and Leisure
Ms Helen McClenaghan		Southern Education and Library Board
Mr David Woods		Department of Education

1. The Chairperson (Mr O’Dowd): I ask members, visitors and witnesses to please ensure that their mobile phones are turned off; even when phones are on silent mode they interfere with the recording equipment.

2. I welcome Mr Will Haire, accounting officer for the Department of Education, Ms Helen McClenaghan, chief executive of the Southern Education and Library Board, Mr David Woods, director of the strategy performance and accountability division in the Department of Education, and Mr Colin Jack, director of culture in the Department of Culture, Arts and Leisure.

3. Evidence sessions usually last about two hours, although they may take longer, and, during that time, the Committee will ask you some questions. Mr Haire, you attended a meeting recently, so you will be familiar with that procedure. I will open the question-and-answer session.

4. Mr Beggs: I wish to register an interest. My dad has been a long-term member of one of the education and library boards, and he was appointed its chairman in the summer.

5. The Chairperson: Thank you. Do any other members wish to declare an interest? If not, we will proceed.

6. Mr Haire, when I read the Comptroller and Auditor General’s report ‘Job Evaluation in the Education and Library Boards’, it was clear that, at least until the 1997 review, the job-evaluation scheme was not being effectively managed. Today’s evidence session will establish how well it was managed before and after 1997. However, that is an initial observation.

7. As has been shown recently, those who are at the end of the job-evaluation process, including classroom assistants, had to wait more than 12 years before an acceptable offer was made. Who agreed the job-evaluation scheme, and why did it take so long to complete? Why do the numbers of staff who were upgraded recently greatly exceed the expectations of the pilot exercise?

8. Mr Will Haire (Department of Education): We totally accept that, 12 years since the process began, it has gone on for a very long time. In answer to your question about who agreed the process, it arose as a result of work that the boards carried out to deal with staff needs and the real issues that affect them, such as equality of pay and the need to assure ourselves that they were being paid fairly. The Department pressed for action in that area, and work on the process began in 1991. As the report describes, by 1995 the boards had agreed on a process to tackle the issues.

9. Discussions with trade unions took place on what the process involved and what scheme should be used. It was agreed that we should initially use the Greater London Whitley Council (GLWC) job-evaluation scheme, which was later developed using the Greater London Provincial Council (GLPC) scheme. As I said, that was agreed with the trade unions, as was the process and the queuing of groups — that is an important point to note.

10. The Chairperson: What do you mean by the “queuing” of groups?

11. Mr Haire: Given that the process would take time, it was accepted that certain groups would have to wait in a queue until the others had been cleared. The reason that 1995 was agreed as the date at which automatic backdating of pay would begin was to assure groups of staff that, even if they were evaluated later than others, they would not be disadvantaged.

12. Why did the process take such a long time? As the report says, the early work reflected some naivety about how easy it would be to carry out the evaluations. The pilot exercise showed that the process worked in general, but that no one realised how complex the negotiations would be. Such evaluations are a complex process that must involve staff. However, I will come back to that point when I discuss classroom assistants.

13. The exercise expanded from covering 10,000 people to covering 31,000 people. The single-status agreement meant that all manual workers were brought into the scheme to ensure that they were paid appropriately. That was implemented at the turn of the century, and it expanded the exercise significantly. Other issues had to be considered; for example, the incorporation of the further education colleges required changes to be made to the process — certain people had to be moved up the queue in order to make them ready for that incorporation.

14. Those are some of the background issues. However, an insufficient management structure existed. The project was not planned as it should have been from the beginning, with clear procedures on how to proceed through it and how to use generic job-description processes to organise it. The work began by considering too many individual cases, and it was not resourced effectively until about 1999. The result was that people were being asked to work on the scheme in addition to doing other jobs.

15. We began to make progress only subsequent to the establishment of the central management support unit and the associated management structure in 1999 and to the development of timescales in 2000. The use of generic job descriptions also sped up the process considerably. Therefore, by 2001-02, the Department was setting timescales for the boards on how to carry out their job evaluations. For example, job evaluations for the 17,500 staff who are covered by the single-status agreement were completed within about two years, and the allocation of some 98% of the funds that were used was planned effectively, having been set out in a budget timetable.

16. The job evaluation of classroom assistants is also instructive. With the agreement of the trade unions, the evaluation had to be deferred for a year because of the single-status agreement, and it therefore slipped down the queue. From 2002 onwards, the employers and trade unions have had detailed discussions on the dispute about job descriptions and the use of questionnaires. The employers have been trying to push that forward and to reach agreement. However, it has been a difficult issue that has required the involvement of voluntary groups of principals, and the Labour Relations Agency (LRA) has also stepped in to resolve some issues, although other matters remain outstanding.

17. It is essential to set timescales and to drive forward processes such as this. However, we must also recognise that the process is now entering a period of negotiation on structures, which is linked to how our social partnership process works. That has undoubtedly caused some of the delays that people are experiencing at the moment.

18. I hope that I have given the Committee a reasonable overview of the process.

19. The Chairperson: To move on slightly, paragraph 5.3 of the Audit Office report describes how neither the Department nor the boards were able to provide detailed costings for previous job-evaluation schemes. Are you now in a position to be able to cost more accurately any job evaluations that are outstanding?

20. Mr Haire: Yes. Until the process has been run to check the entitlement of all staff, I cannot give you an exact figure. However, since we have been using generic job descriptions, we are much better equipped to cost the schemes. The two largest groups, after classroom assistants, for whom job evaluations still have to be completed, are nursery assistants and domestic and general assistants. Both groups are, in some ways, allied to classroom assistants, and a large proportion of domestic and general assistants work for the Southern Education and Library Board in particular. A total of about 1,500 employees comprise those two groups, and we are clear about the cost of their job evaluations and for the buy-out of certain related employment rights.

21. We have either calculated accruals or we have clear costs for the 41 individual cases still being processed. I can provide the Committee with written estimates on those.

22. The Chairperson: Thank you. Paragraphs 2.10 and 6.3 of the report state that a staff inspection to examine efficiency and productivity was part of the original format of job evaluations, and it is disturbing that that has not been taken into account in the process to date. Have any lessons been learnt from other job-evaluation schemes that were included in the recommendations of the joint committee?

23. Mr Haire: The suggestion that an inspection of efficiency and productivity form part of the process emerged from discussions with Belfast City Council and the Housing Executive. It is regrettable that that was not implemented. The central management support unit, which reports to Ms McClenaghan, carries out best-value work across the boards, in addition to overseeing the work on job evaluations. Undoubtedly, the best-value work has been helpful in considering the new structures. However, there was no focus on efficiency systems in the process; we used other mechanisms to try to ensure that we had control over what was in place.

24. However, the publication of the report is timely for us as we set up the new education and skills authority (ESA). Crucially, we need to take on board the lessons that were learnt from previous processes. As the 40 different services come together under the new authority, we must consider how to transform them effectively in order to gain efficiencies from the process. We must also consider how we can transform significantly many of the existing services to schools.

25. We will be talking to Gavin Boyd, the chief executive designate of the new education and skills authority, to discuss how the organisation will be structured. I will emphasise to him that it is essential that he has a business improvement unit, or an efficiency unit, to examine the staffing issues right from the beginning. It should go through the process, as all the services are being put in place, to ensure that the efficiencies are being made.

26. The Chairperson: Before I bring in other members, I will ask Mr Ciaran Doran from the Treasury Office to tell us what assurances he can give the Committee that other current or planned public-sector job evaluations will learn the lessons from the scheme that we are discussing today.

27. Mr Ciaran Doran (Deputy Treasury Officer of Accounts): We intend to circulate the key lessons that have been learnt, subsequent to the report from this hearing and the memorandum of response that we will agree. We may make a point of communicating directly with some of the Departments that are mentioned in the Audit Office report; for example, the Department for Employment and Learning was mentioned in relation to higher education.

28. My office has already had preliminary discussions with the Department of the Environment about how councils might take into account some of the lessons from the report. Standard practice is for us to regularly communicate the main recommendations from such reports to all accounting officers, and we intend to follow this up.

29. Mr Dallat: Paragraph 4.2 of the Audit Office report states that the job-evaluation exercise, which formally began in 1995, has still not been finalised. As well as the classroom assistants, whose evaluations are still in dispute, 1,795 evaluations remain outstanding. When do you expect the process to be fully completed?

30. Mr Haire: As I said, two large generic evaluations cover the majority of those posts, and there are 41 individual job evaluations. The Department of Education has written to the boards to tell them that I expect those two generic job evaluations to be completed by next summer. Given that the issues involved are related to the classroom assistants’ job descriptions, resolution of that dispute is crucial to completing those two evaluations. I understand that the trade unions have always emphasised that point, so we are caught in the dispute.

31. We have 41 individual job evaluations to complete. Some individuals still disagree with their job descriptions or have not returned forms, and we are chasing them. Although those job evaluations and the terms that are agreed will stay with people as they move into the new education and skills authority, some will come back to us and say that that their jobs must be re-evaluated in that new context. Therefore, the process will not stop in a neat way. That sort of work will continue, but I hope that it will be marginal.

32. As I said, we aim to have the processes finished by next summer, if we can complete the negotiations.

33. Mr Dallat: If Laurel and Hardy wrote the script for this subject, they would say that we are in another fine mess.

34. However, I would like to pursue the classroom assistants’ issue and put a question to Helen McClenaghan. Let us say that NIPSA agreed today to ballot their classroom assistants. Would you welcome that? Would you ensure that the boards took no action that would cut across that ballot?

35. Ms Helen McClenaghan (Southern Education and Library Board): I am happy to respond. I would greatly welcome a ballot. That is the objective that the boards seek from NIPSA, and we would do nothing to hinder it; rather, we would wait for the outcome of the ballot.

36. Mr Dallat: I welcome that answer. On the same subject, do the education and library boards have any plans to divert cash that has been earmarked for job evaluations?

37. Ms McClenaghan: Absolutely not, sir. Such action is prevented by rigorous financial control. It would not be in the mind of any of the boards to do that, nor would it be possible.

38. Mr Dallat: Did the boards not do that in the past?

39. Ms McClenaghan: Never.

40. Mr Dallat: Thank you.

41. I see in paragraph 4.5 that the decision to continue evaluating the remaining headquarters and outcentre posts on an individual basis contributed to the delay in completing the job-evaluation exercise. Why did the Department not do more to ensure that the generic approach was used for those apparently standardised posts?

42. Mr Haire: The dispute was with individuals who thought that the posts were not standardised. It was impossible to agree an alternative system with the trade unions in that process. Under this process, 94% of staff will be evaluated as a result of a generic evaluation. The main focus, at the beginning, was on individual cases. The process is one in which one has to work within an system that has been agreed, especially with the trade unions. We want to press forward with that process as rapidly as possible.

43. Mr Dallat: Paragraph 4.6 of the report outlines the Department’s reasons that it was not feasible to set a time frame for completing exercise. Surely, having a time frame to work to — and responsibility allocated for keeping to that timetable — would have speeded up the whole process?

44. Mr Haire: As I have said, we take the point that the exercise should have been project managed from the outset: there should have been clarity about the timescale of the process; we should have set target dates to be achieved; and it should have been managed more effectively. Since 2000 and the establishment of the central management support unit, under Ms McClenaghan timescales have been set and achieved, for example, where manual staff are concerned.

45. I also described the problem that we had with classroom assistants, for example. A target was set for them, but it has been impossible to achieve that because of the industrial relations environment. Even then, having a target at least keeps a focus on a particular grade. Although we perhaps focus on policy too much, matters such as pay are major resource issues. There must be a focus on resources, and one must understand their budgetary implications. It must be built into your plans much more effectively than was the case during that period. We picked up on that issue by 2000-01. However, you can appreciate that we had to catch up on some problems because we had not dealt effectively with them at the outset.

46. Mr Dallat: Ms McClenaghan, I hope that the unequivocal statement that you have just made about the strike, and your promise not to cut across any action should a ballot be called, will contribute to its settlement. Are we sure that the figures that have been quoted in the current offer are accurate?

47. Ms McClenaghan: The nature of job evaluations means that the job description is not just generally agreed as generic. Instead, the placing of the individual is done in conjunction with the line manager. In the case of classroom assistants, the line manager would be the principal of an individual school. Therefore, discussions to agree the job description will need to take place. Where that particular person is placed, and where the almost 7,000 classroom assistants are placed, will determine whether the £25 million that has been set aside for back pay is adequate. The boards, which have detailed knowledge of the number of classroom assistants, have decided on the basis of a pilot evaluation of several posts that that sum should be adequate. However, I must stress that if the outcome produces a greater — or lesser — amount, the nature of job evaluation means that it is mandatory for the boards to provide those resources. Whatever is needful must be provided.

48. Mr Dallat: I take some comfort from that. In the meantime, I have no further questions.

49. Mr Hamilton: Unsurprisingly, the issue of classroom assistants has arisen again, as I thought that it would. Obviously, the Audit Office report goes into some detail about how the job evaluations of 7,000 classroom assistants have not been settled. I know that some progress has been made since the report was published in June 2007. We are now at the stage where only one trade union has not agreed to the settlement.

50. What is the latest position in the dispute? What are the sticking points? Why has it taken so long for that particular union to reach a settlement? I know that you have mentioned some issues in regard to the matter already, but are there any other issues that have not been mentioned that will explain the reason that that particular union has taken so long to agree a settlement?

51. Mr Haire: Three areas of major concern have been noted: the allowances; NVQ level 3; and the 32·5- to 36-hourly week devisor. As a general background issue, those important technical matters have been debated for five years with the trade unions, and that is the crux of our current position.

52. The Minister has also recognised a wider issue, which is that we must debate the nature of the education workforce. We are seeing a major change in that area, and that is reflected in the report. There has been a major expansion of other school services, apart from teachers — we have dealt with special educational needs and many other social needs. One of the wider issues is the role of the classroom assistant in the process and where that fits. What are the career-progression opportunities for that very important group of staff? How does it fit with the teaching profession? That wider issue lies behind this process, and the Minister feels that it is essential that that is examined. Getting the right balance is a complicated issue to which there is no easy resolution. Therefore, it must be debated fully.

53. However, we have an expanding group playing a very important role in education, and we must ascertain our overall view of the workforce. Eighty per cent of the Department’s budget goes on staff costs. We must have a better strategic view of staff, their roles, and how they are to be rewarded. The policy is important, and that is one key lesson that the Department will take from the report.

54. I have talked in general terms, so perhaps Helen can go into the details.

55. Ms McClenaghan: I reiterate what Mr Haire has already said about agreement to a tranche — or a queue — approach to job evaluation, and about the agreement at the outset that classroom assistants would be near the end of that queue. Those evaluations were further deferred by agreement with the trade unions for two years to allow the single-status body to be job evaluated. That covers the considerable number of about 21,000 people.

56. Bringing that a little closer to today, we all know that three of the four unions that have classroom assistants in their membership voted to accept the employers’ offer and that NIPSA continues to be of a mind that the offer will not be acceptable to its members. I repeat what I said to Mr Dallat: we would welcome a vote so that each individual classroom assistant who is a NIPSA member can voice his or her position.

57. I hope, although I am reluctant to say too much about this, that there may be some developments tomorrow, following the meeting of the joint negotiating council. I do not think that it would be helpful for me to say much beyond that. I hope that that is satisfactory.

58. Mr Hamilton: Thank you. I do not want to take the issue down an avenue that might prejudice a successful outcome.

59. Paragraph 5.27 of the report states that the Department said that there is no evidence to support the view that the financial impact of the unexpectedly high levels of upgrading staff contributed to the financial pressures that resulted in major overspends in the Belfast Education and Library Board and the South Eastern Education and Library Board. Moving on to paragraph 5.29, it contains extracts from the Jack Report into the financial management of the South Eastern Education and Library Board. Those comments — and there are quite a few — indicate that there is a knock-on effect. Is that being disputed, and is the Department disagreeing with Dr Jack’s findings?

60. Mr Haire: Our view contains an element of emphasis. The Department’s reading of the Jack Report and the other reports carried out in that area look at the particular problems of the Belfast Education and Library Board. They focus on its key problems, particularly those that arose from overspending on schools’ delegated budgets, and the fact that it overspent on special education, particularly on classroom assistants, and high levels of expenditure on transport. Dr Jack’s report emphasised the problems in that area and the connected financial-management issues.

61. With regard to the South Eastern Board, the report focused on the problems caused by the increasing trend for statementing pupils, leading to higher costs; transport issues that arise from the special arrangements that are required there; and the statementing process. The Department does not doubt that financial pressures were part of the backdrop to the board’s problems. However, three other boards dealt with exactly the same pressures and did not face those problems. The Department has spent a lot of time helping those two boards to sort out their issues. However, the Jack Report and other reports pointed to other areas and, frankly, in the Department’s view, emphasised that those were more significant than the particular issues of the job evaluation process.

62. Therefore, while we may debate the symptoms and causes, behind all of that, the Department totally agrees that one must have a strong financial understanding of the costs of those kinds of staff expenditure, as well as much better tracking and better financial management of the process. The Department does not doubt that there are lessons to be learnt by the boards, and also by the Department, because ultimately it is the Department’s responsibility. There must be a system to track all these issues throughout the process.

63. Mr Hamilton: So the Department accepts that the lack of close co-operation, the confusion about estimates, and so forth contributed to the overspend?

64. Mr Haire: We can debate how much of that there was in the process and how much the Department recognised, but the Department does not dispute the core issues or the importance of getting them right.

65. Mr Hamilton: That is fine.

66. Finally, the report outlines major deficiencies in respect of the lack of close co-operation with the South Eastern Board, and, in relation to the Belfast Board, quotes the Jack Report:

“There does not appear to have been a rigorous attempt to forecast the likely cost of ongoing policies such as job evaluation”.

67. Is the Department now satisfied that those deficiencies in forecasting the impact of job evaluation have been rectified and will not happen again?

68. Mr Haire: A great deal of work has been done by the boards, and generally by the Department in respect of all the boards, on forecasting and other areas. Therefore, we have much tighter control and work much more closely with all boards in order to check their finances at all stages. I am confident that there is a system by which the Department can monitor all of the pressures — which do happen during this process — much more effectively.

69. Mr Hilditch: I want to ask Mr Jack about the Library Service. Paragraph 3.2 of the report states that although your Department had been operating the Library Service for seven months, it did not know that a major financial commitment was coming down the tracks at that time. Surely, senior departmental officials had met senior library staff following the creation of the Department of Culture, Arts and Leisure? Why did chief librarians not advise the Department about that important issue?

70. Mr Colin Jack (Department of Culture, Arts and Leisure): The chief librarians advised the Department of the emerging issue in June 2000, and in more detail during July of that year, when they gave the Department an initial scoping of their view of the impact of the job evaluation exercise on their budgets. That was, obviously, at an early stage of devolution. Some of the initial focus was probably on policy development. At that time, the Department was preparing for the 2000 comprehensive spending review. It would have been in that context that the issue was first raised.

71. Mr Hilditch: Paragraph 3.3 shows that a staggering 92% of professional and administrative posts were upgraded. One of the reasons put forward to explain that was that posts in the Library Service had been under-graded prior to 1995. On what basis can that be substantiated?

72. Mr Jack: The vast majority of Library Service staff are based in the branches. Of a total of between 800 and 900, approximately 630 full-time equivalent staff — probably somewhat more than that, because many work part time — work in the branch libraries. Therefore, a large proportion of Library Service staff who were covered by the job evaluation exercise would have been at a single grade of library assistant. That grade was one of the first generic job description evaluations that was carried out during that entire exercise. That particular grade was upgraded as a result of the job evaluation exercise, and that is why the proportionate impact on Library Service staff was so great.

73. It is important to point out that the job evaluation exercise took place at a time when the role of the Library Service was changing. There was computerisation, the introduction of the electronic libraries network, and so on, and the role of front-line staff was changing. They were working with customers to access information through computers as well as books. The job evaluation exercise introduced some flexibility in working hours and in other aspects of terms and conditions, which provided the opportunity to reassign staff from headquarters to front-line services. That has resulted in a shift of resources from administration to the front line.

74. Mr Hilditch: Are you saying that Library Service staff were under-graded, compared to other board staff?

75. Mr Jack: The job evaluation exercise carried out in 2000 concluded that the staff at that level should be regraded. The Department subsequently verified those findings by commissioning a study by the Association of London Government, which confirmed that the job evaluation exercise had been carried out properly.

76. Ms McClenaghan: The Department of Culture, Arts and Leisure commissioned the Association of London Government to verify those findings. It is helpful that the Audit Office report acknowledges that both the methodology and the outcome were validated by that study. The job evaluation scheme was ambitious, but it was needful and complex. Not all of local government has engaged with it on a wholesale basis. To tackle it in 1995 at the direction of the Department was, if not audacious, needful. As Mr Haire has emphasised, the job evaluation exercise has prepared the way for the introduction of the education and skills authority, as many of the difficulties around equivalence between jobs will have been dealt with already.

77. Mr Hilditch: Paragraph 3.5 of the Audit Office report states that, as a result of the job evaluation exercise, staff are more flexible in the way in which they can be deployed. How did that work in practice? I would like to see hard figures on the savings that have been achieved. If that is not possible today, perhaps you could provide those figures to the Committee.

78. Mr Jack: I should be able to provide you with some figures. Some of the ways in which flexibility was introduced related to working hours and to redeploying staff from headquarters to branch libraries, either on a temporary basis to cover absences and vacancies, or on an ongoing basis to shift some posts so that they provided both a front-line and an administrative service.

79. Since 2000, there has been a reduction in the number of Library Service staff from around 775 to around 730 full-time equivalents. The number of front-line staff has remained constant at around 630. Therefore, the number of administrative staff in Library Service headquarters has been reduced by one third.

80. Mr Hilditch: Paragraph 3.9 of the report states:

“the overall exercise resulted in a higher proportion of upgraded posts than might have been expected”.

81. What was the Department’s view of this finding?

82. Mr Jack: The Department agrees that the level of regrading was higher than had initially been anticipated. The pilot exercise in late 1993 and early 1994 underestimated the proportion of staff that would be regraded. That pilot did not include any specific analysis of Library Service staff in isolation. However, library staff were the first group to be evaluated on the basis of a generic job description. That was really the first outcome of the job evaluation process, which highlighted — not just for the Department of Culture, Arts and Leisure, but also for the Department of Education and the education and library boards — the potential scale of the upgradings that would result from the evaluation. It goes back to an acceptance by all those bodies that the initial exercise could have been better scoped and project-managed.

83. Mr Lunn: My question is mainly about the variances in the number of people upgraded across the various boards. In some cases, those variances are quite amazing. Paragraph 2.34 of the report shows the variation between the Western Board, which upgraded 63% of staff, and the North Eastern Board, which upgraded 48%. Given that those staff are supposed to be doing the same job, how can such variations occur?

84. Mr Haire: I must admit that, reading the report for the first time, I was struck by exactly the same point. One issue is that, since the 1970s, the five boards have taken significantly different routes and developed different processes as regards their work. They have been organised in subtly different ways. The figures for three boards are fairly comparable, and I wonder whether those organisations developed parallel to one another in some ways. However, some boards grew in very different ways and different types of work involved different processes.

85. I am aware that it was only relatively recently, for example, that the Southern Board integrated the human resources function for schools with that for the rest of the staff. In other boards, those two areas were integrated in another way. Therefore, structures and organisation of work have always been different.

86. Of course, for a long time, there was no effective system for grading jobs. That is one of the reasons why the Department asked for a job evaluation to be carried out — to get a bit more system and structure. That process found that the organisations were somewhat different from one another, and the evaluation has helped to sort out some of the disparities. Remember, this is not one organisation but five separate employers. They work together in some common areas, but each board has the right to make decisions on how it organises its work.

87. The issue behind all of this is that the Department must keep challenging boards about the unit costs of their services and how they are carried out, and it must require that better benchmarking be carried out. As we reorganise and move forward, the education and skills authority will not only have to bring together those services and get them better organised, but also benchmark itself against comparable organisations so that we can be assured that the best unit processes will be in place and that resources will be used in the best way possible.

88. Ms McClenaghan: I must emphasise that, when the boards were established in 1973, they were set up as five local education authorities; they were recognised as distinct bodies from the outset. They delivered different services in some cases, and they clearly delivered even the common services in quite different ways. The nature of the delivery of those services was very much influenced by geographical location, and also by the fact that 40% of board members are local representatives. We therefore had — and continue to have — a very strong commitment to serving our local communities.

89. In that instance, one can see how services would have a distinctive local characteristic. Job titles might have been the same across a number of boards, but duties and levels of responsibility could have been different. Those duties and titles would have been recognised by the individual boards. It was clear in the late 1980s that that could not persist, as legislation increasingly required the boards to do the same things in curricular and other regards. That was why job evaluation was seen to be critical to continuing best management and efficiency in the delivery of services.

90. Mr Lunn: In paragraph 2.36 — the Department’s explanation of the variations — I noticed the comment that three of the five boards were very close and differed by only 3% or 4%, while the other two boards differed by only 1%. In retrospect, is that a very clever comment? It does not really disguise the fact that the variation between the highest and the lowest was 15%. In particular sectors, the variations ranged up to 40%.

91. Mr Haire: I take the point that the way in which the argument is put begs several other questions. I hope that some of the points that I have made explain some of these disparities. We are not looking at exactly the same units and types of work being done in exactly the same way. From 1973 until the period of the review, none of the boards had systems to examine the grading and organisation of their work, hence the disparities.

92. Mr Lunn: Did the Department have an opportunity to challenge those variations at an early stage?

93. Mr Haire: The work goes back some time. However, the job evaluation process is structured and robust. The external experts from the Association of London Government evaluated how the system worked in the Department of Culture, Arts and Leisure, and that indicated that the scheme was being run rigorously and capturing fairly what was happening in the system.

94. To turn the argument round, many staff were being underpaid. Eighty-five per cent of the staff are female, and many of them work part time. We now have a system to evaluate the grades systematically and to ensure fair pay. The other side of the coin is that fairness has been achieved through this process.

95. Mr Lunn: According to paragraph 2.41, the chairman of the re-evaluation panel expressed grave concern about the payroll staff appeal decisions. I am interested in your views on his opinion that the scheme was being misused. Are you satisfied that there are no other such cases? What do you think of his comments?

96. Mr Haire: That is a matter of deep concern. It goes back to the point that the South Eastern Board’s payroll system was different to those operating in three of the other boards. The Belfast Board follows a similar model to that used by the South Eastern Board. The idea was that multi-skilled staff would be distributed throughout the system, as opposed to a traditional hierarchical system with layers.

97. The senior management said that they and the staff of the South Eastern Board payroll section were very concerned about that process. There was an appeal. The staff did not have trade union representation, because they had left the union, and there was a question about who would represent them. The scheme did not say that they could not be represented by senior management and, in the event, they were represented by a member of senior management. One of the chairman’s key concerns, noted in paragraph 2.41, was that this approach was wrong and inappropriate. We have made clear — as has been noted in the recommendation in paragraph 2.48 — that this matter has been extensively discussed within the board; that we know of no other case like it in the process; and that it should not happen.

98. It is a complicated issue for us, because we are concerned that members of staff should have the right to be represented by someone. We have to ensure that that is possible. However, we have made sure that this does not happen. There are two big, generic competitions out there, and there are only 41 individual ones in the present structure, as we understand it. We do not know of any other such case. I stress that the lessons about the nature of representation, and the concerns that the chair represented in paragraph 2.41, have been taken into account.

99. Mr Lunn: Paragraph 2.44 states that the Belfast Board followed the South Eastern Board’s example by upgrading its payroll staff — although the other three boards did not. Can you tell me why the Southern Board, and the other two boards, chose not to follow the Belfast Board’s example?

100. Ms McClenaghan: The difference was one of activity. In our board, and in the other two boards, the role of the payroll staff is different, as is reflected in their differing job descriptions. They carry out different tasks. They are exclusively engaged in ensuring that pay is issued. Therefore, the job evaluation for them came out at a lower level than in the two boards where there were significantly higher duties to be performed.

101. Mr Lunn: My original question was about these basic variations. Mr Haire was quite clear that those variations occurred because the various bodies were autonomous and, therefore, the duties were different; the job descriptions were different; and the terms and conditions were different. It does not tally with me that one board simply follows another, as regards its payroll staff, and just read across the amounts of pay without a further re-evaluation.

102. Mr Haire: They would only have done that if the job descriptions — which are how they organised the work — were the same as those of the South Eastern Board, as opposed to the other boards. They could only do that if that was what was actually happening in their units. If that was the right description, then they could say that it was comparable. The central management support unit in Armagh has the job of checking whether that is correct — that the process has been done correctly in that way. It is the responsibility of the Belfast Board’s accounting officer, if that is the way in which he organises work, and those are the correct job descriptions of that work. That is the way the process works. The boards are regarded as separate employers.

103. Mr Lunn: You are satisfied — having scrutinised that situation — that the job descriptions for those staff in the Belfast Board were broadly similar to those of the South Eastern Board?

104. Mr Haire: It is the role of the central management support unit to make sure that the process is absolutely fair. Those are important issues. As we go towards the establishment of the education and skills authority, payroll will be one of the issues that has to be done in a single system. It is an obvious issue where we can, perhaps, make economies in other systems and work out processes. We have to return to the basic issue of why one needs different systems. We need to get the best resource organisation done in that way, so that we can maximise the amount of money in the classroom. That is what this should be about. It is one of the key areas on which we are focusing. Therefore, this will have to be looked at again, in a process that I hope will also deal with those issues.

105. The Chairperson: Do we have to return to the payroll staff in the five boards, even after the job evaluation, as we move into the education and skills authority?

106. Mr Haire: Clearly, in large areas, they are comparable. They have their pay systems at the moment. Undoubtedly, one of our reforms, in setting up the education skills authority, will be to look at a lot of different processes. The good thing is that we have job descriptions and pay systems. The Department must make decisions on how that is done. Undoubtedly, that is a new stage of reform, which will bring some changes. At least we have a much more comparable system than we had, say, 12 years ago. All organisations are in constant change. That process never stops. The job evaluation scheme that was chosen is a robust scheme that provides a good basis for the education and skills authority and ongoing work.

107. Mr McGlone: I want the Department to shed a little clarity on the classroom assistants’ claims. Earlier, Mr Haire referred to understanding the budgetary implications. With regard to the business case for the job evaluations, management recognised that there was disagreement about the accuracy of the cost estimates. Do you think that that would prove a wee bit more difficult? There are conflicting figures as to whether there are 6,800 or 7,200 classroom assistants, which, obviously, has clear budgetary ramifications and difficulties. I would appreciate it if the Department could shed more light on that.

108. Furthermore, with regard to the resolution of the problem, how does the Department respond to the claim that, potentially, under current proposals, a lot of people will be put on protected pay? In fact, it is estimated that 68% of classroom assistants could potentially be put on protective pay. The reason that I hang my hat on that is because, earlier, the Department referred to the fairness of any pay negotiations or settlement. Given the number of classroom assistants who are female, that could potentially widen the gender pay gap. Can the Department clarify those issues?

109. Mr Haire: The boards pay the classroom assistants and, obviously, they have the payroll details of exactly whom they are paying. They have assured me that they have detailed knowledge of the exact number of classroom assistants, many of whom are part-time workers. Obviously, comparing them to full-time equivalent jobs requires a lot of detailed work. That work has to be backdated to 1995 in order to check people’s employment history, which will have changed considerably during that time. It took almost half a morning to work through one case and to ensure that it was done absolutely correctly.

110. The process and calculations have been carried out carefully. Ms McClenaghan has emphasised that. The process must be carried out and the checks done. People are entitled to that pay, and resources must be found. In order to tackle the issue, the Department of Education and the Department of Finance and Personnel have stressed to the boards that they must have the best estimates on that.

111. It is important that people’s pay is protected. However, I am not sure what that will mean for the largely female workforce or how the process will affect equality objectives.

112. Mr McGlone: If someone is on protected pay, is that because he or she could potentially be downgraded in the order of things? I appreciate your answer, but is the number of classroom assistants 6,800 or 7,200? Obviously, if the Department is going into negotiations with a figure of 6,800, a smaller budget is needed.

113. Mr Haire: Pay protection exists to provide cover for people during the process. It is an important equality objective.

114. Mr McGlone: If their job is downgraded, or the scale is wrong.

115. Mr Haire: That would be the logic.

116. Mr McGlone: I am trying to get this clear in my own mind. My first concern is about the figures. As public representatives, we receive representations from various parties, and clearly we want to ensure that any information that we have is factually correct.

117. Ms McClenaghan: I am, of course, familiar with the figure of 6,800. The latest briefing that I received was that there were 6,795 classroom assistants. Of course, that will vary a little from day to day as additional classroom assistants are appointed. This matter largely concerns additional classroom assistants, rather than any decrease in their number. I am not familiar with a number that is over 7,000. Clearly, we take our figures from the payroll of the five boards, so it should be accurate; there is no reason to doubt those figures.

118. On the matter of protection, the job descriptions under the three salary scales, which were agreed with the trade unions, give different hourly rates. In some cases, there are classroom assistants who, under the current terms and conditions of salary, will be in receipt of higher hourly rates. They will remain protected. This issue is very complex, and it offers great capacity for the protection of pay. It is estimated — and this can only be in general terms — that about 50% of classroom assistants will be on protected pay.

119. However, as I said in answer to an earlier question, the assessment of individual classroom assistants will turn entirely on what he or, in the majority of cases, she is doing, and the evaluation that the school principal arrives at about those duties in relation to the job descriptions for the three salary points or scales.

120. There will be continuing protection, and it is both needful and important for the individual that the protection arrangements are very comprehensive. We have all been trying to get that message out to classroom assistants. Some of their very real and understandable fears should be assuaged by the knowledge that there are comprehensive protection arrangements for pensions as well as for the hourly rate.

121. Mr McGlone: Thank you for that answer.

122. Paragraph 3.14 states that:

“the Association of Chief Librarians (NI) requested that the Central Management Support Unit for the Boards undertake a Public Library staffing study. A draft report was produced in September 2004. This report, however, was not completed as the Chief Librarians considered some of the recommendations to be unrealistic.”

123. Can you elaborate on the problems with the report? How have those problems been overcome?

124. Mr Jack: It is correct that a draft report was produced in September 2004. Some of its recommendations, which were made at a time when there was a pressure to live within the libraries’ budget, made assumptions about staff numbers, and the chief librarians, as the managers of the service, considered those numbers to be unrealistic. Recommendations were made to increase the number of staff, but those could not have been delivered within the budget that was available at the time.

125. Throughout that period — and since — the Department and the boards have worked together to prioritise front-line services. Although that particular report was not completed, as I mentioned before, there has been a reduction in the number of headquarters administration staff in the Library Service — from around 150 to around 100 — while the number of staff in the branch libraries has been protected. There were about 630 such staff at the beginning of that period, and there are around the same number now.

126. Pressure has been exerted in other ways, for example, through the policy framework ‘Delivering Tomorrow’s Libraries’, which was published in 2006. It gave priority to front-line services such as books and other stock; for instance, in 2000, the level of expenditure on those services was £1·03 for each member of the population. The figure for this year, which was set as a target in ‘Delivering Tomorrow’s Libraries’, is £2 a head. Therefore, there has been a significant shift of resources in the Library Service towards front-line services.

127. Although that specific report was not completed, other processes were aimed at achieving efficiencies and prioritising front-line services.

128. Mr McGlone: Paragraph 3.15 of the report states that the Department of Culture, Arts and Leisure did not seek to confirm that staffing levels in the Library Service were not excessive. Do you find that surprising? Surely it was the Department’s responsibility to ensure that that had been done.

129. Mr Jack: The boards and the Department are responsible for ensuring that staffing levels are not excessive. However, the context of that period was that the Budget settlement was driving the Department towards achieving efficiencies. Therefore, the search for efficiencies was ongoing throughout that period.

130. Mr McGlone: Are you saying that it was an ongoing process throughout that period?

131. Mr Jack: Yes. Together with the boards, the Department delivered savings of a third in the administration headquarters staff in the Library Service, and there was a shift towards protecting the front-line services.

132. Mr McLaughlin: Mr Haire, I refer you to paragraph 4.14 of the report, which states that:

“The Department accepts that progress is slower in the early years and could be regarded as lacking a degree of management and control.”

133. Does that mean that your Department lacked control? Does that suggest that there was a largely hands-off approach until it became obvious that the boards were experiencing major problems in completing the scheme?

134. Mr Haire: The Department must share the responsibility for that because clear advice was provided. The joint committee agreed on certain processes, such as that an efficiency unit should be established for the process and that there should be a focus on generic procedures. However, from 1995 to 1997, that was not done. My reading of the files indicates that the Department was trying to press the boards on the establishment of the central efficiency units to which they had agreed, but that it was experiencing resistance.

135. Between 1992 and 1997, there had been a review of the boards’ structure, and there was a question about whether there should be fewer boards, and so forth. There was much debate and dissension at that time. Ms McClenaghan also emphasised the traditionalist concept of boards as separate education authorities and that they were separated by their distinctiveness. One reads in the files of a culture that rejects that proposal and considers that it is better to carry out the process alone. In hindsight, there should have been greater pressure on the boards to carry out the agreed processes. In 1997, they started to realise what the problems were. By 1999, they got to where they should have been in 1995 by establishing the central unit. The Department must accept both the lesson and its important role, which is to ensure that such processes are carried through because of the major financial implications that are involved.

136. Mr McLaughlin: Ms McClenaghan, can you offer any comments from the boards’ perspective?

137. Mrs McClenaghan: I share Mr Haire’s concern that until 1999, there was neither the desired degree of monitoring by the boards nor reporting to the Department. By 1997, the situation had improved slightly when two co-ordinators were appointed to manage job evaluation. Through those appointments, the Department declared that consistency and, as far as possible, uniformity were necessary. The central management support unit subsequently agreed a budget, which was well managed and which dealt, for example, with the single status. As Mr Haire mentioned, that was a considerable exercise within a two-year programme. Since then, it has been managed well. A timescale has now been set for completing job evaluations, and the board believes that it will be able to keep to that with a relatively modest budget.

138. Mr McLaughlin: Ultimately, however, the Department was the paymaster. Notwithstanding the traditionalists’ attitude about the independence of the boards — one of the consequences being a variation across the five boards in how they responded to similar circumstances — this is a major failing for which the Department should accept responsibility in a very forthright way.

139. Mr Haire: The issue of pay disparity goes back to 1973. By the 1990s, it became obvious that there was no system in place to justify the differences in salaries. Therefore, a job-evaluation system was established. You are right in saying that the Department should have ensured tighter timescales and a clearer process. It is only by 1999 that the process was rectified. The Department must recognise that one of its key roles is to ensure that there is clarity about the use of resources and staffing. We must get that right as we go forward in the next form of educational administration.

140. We must have a totally open system for understanding pay costs, having workforce strategies, and understanding such strategies in our budgetary process. That is an integral part of the way in which we deal with policy and strategy.

141. Mr McLaughlin: The Department tells us that this is a complicated and novel process, but a job-evaluation system is not a new process. Lessons that were learnt from previous experiences had been set aside. The process is complicated and novel because of the way in which we chose to implement it, rather than the process itself being inherently difficult to manage. Surely at that time the Department had as much access to experience and best practice as the boards. It had a responsibility to ensure that best practice was applied from the beginning, not four years into the project.

142. Mr Haire: I agree.

143. Mr McLaughlin: That is almost the straightest answer that I have had so far. If you could turn the clock back, what would you do differently?

144. Mr Haire: I would ideally like to turn the clock back to 1985 or perhaps even further. A key part of the process relates to the fact that work should have begun on the introduction of efficiency and staffing units. Those systems should have been in place before a job-evaluation system was introduced; it is a complex process. It is important to have a central unit overseeing that system and to have timescales to try to move towards generic processes. All those lessons are key, and that issue should have been dealt with.

145. People did not realise the extent or implications of the exercise or how it was going to be carried out. Part of the pilot exercise, which involved 80 staff, showed that the process worked very well. People thought that it would inform them about cost issues such as funding. However, the pilot was a very narrow sample that involved many different groups of staff. Therefore, it was naive to think that that exercise would provide much more than an indicator.

146. People involved in the pilot exercise did not dispute the job descriptions; there was no debate about it because everyone knew that it was merely a pilot exercise. However, when it comes to the real thing, major problems arose, because those job descriptions are important to staff. A process that looked simple on paper becomes much longer in practice. Therefore, there was a question about understanding those issues and using adequate resources to drive it forward.

147. Mr McLaughlin: You have addressed the issue of setting time limits. We are actually facing another evaluation process. I am reminded of the Forth Bridge — when painting finishes at one end of it, it begins again at the other.

148. Mr Haire: I do not think that you go the whole way back to the start of the process. There will always be individual jobs or small issues that will change in an organisation and that will have to be tweaked at the end. However, one does not have to do a full paint job the whole way across. I am simply saying that that would be a natural part of the process because the margins of organisations and jobs shift. I should point out that 94% of the work has been achieved and the other 6% is clearly in our sights.

149. Mr McLaughlin: I hope that the methodology will be based on the generic job description.

150. Mr Haire: There will always be individual cases that do not fit as well into that process as others. Clearly, once the education skills authority is established, it may be able to ensure that job descriptions are more generic.

151. Mr McLaughlin: Is the actual conduct of the review sufficiently independent? I am referring to the re-evaluations, the evaluations, and the appeal process that is associated with it. You did not mention whether that was the case.

152. Mr Haire: Certainly, the trade unions seem to feel sufficiently confident that the appeal system will be fair to staff. It is quite a detailed process that includes both pre-appeals and appeals. My understanding is that the unions feel satisfied with it. In that way, there is independence to give individual members of staff —

153. Mr McLaughlin: Could you describe the composition of the evaluation panels and the appeal panels?

154. Ms McClenaghan: One of the co-ordinators will serve on the appeal panel — that is, one of two of the central management support unit. The local job evaluation officer will also serve on the panel.

155. Mr McLaughlin: Are they senior management personnel?

156. Ms McClenaghan: They hold relatively senior positions. Above all, they are experienced, and they deal across the whole realm of job evaluation. Therefore, their experience is not particular to one board; they have a wider board experience.

157. I hope I am not distracting the Committee by reminding myself — and others — that one of the benefits of job evaluation is that we no longer have equal pay claims. Since 1995, we have not been troubled —

158. Mr McLaughlin: I know that. However, I am asking about the composition of the re-evaluation panels and the appeal panels. That is what I specifically want to know.

159. Ms McClenaghan: It is as I have described it. It has local representation from the job-evaluation officer, a representative from the central management unit —

160. Mr McLaughlin: Is that one person, in each case?

161. Ms McClenaghan: Yes. That is one person in each case.

162. Mr McLaughlin: Is that it — two people?

163. Ms McClenaghan: No. There are more than that; there is trade union representation.

164. Mr McLaughlin: Could you tell the Committee the entire composition of the panel, so that it is clear? How many people will be on the panel, and where will they all come from?

165. Ms McClenaghan: I would prefer to answer that in writing through Mr Haire. I will give you some examples then.

166. The Chairperson: Does the composition vary according to circumstances? Without naming individuals, does a set panel exist, so that we could know of the positions that its members hold? I think that Mr McLaughlin is trying to make that point.

167. Mr McLaughlin: It is amazing that a straightforward formula is not applied in general.

168. Ms McClenaghan: There are relatively few appeal panels that have occasion to meet, and I am not sufficiently familiar with them to be assured of any answer that I could give.

169. Mr McLaughlin: OK. What about the evaluation panels?

170. Ms McClenaghan: I will give the same response.

171. Mr McLaughlin: You do not know the answer? Mr Haire, do you know?

172. Mr Haire: With regard to the re-evaluation panels, the text refers to the use of evaluators from other boards and the CMSU group, which carries out such work.

173. Mr McLaughlin: Is that on the trade union side?

174. Mr Haire: I would have to write to you about how the trade unions are involved in that work.

175. Mr McLaughlin: How independent is that? In deciding to draw lessons for the future, should we continue with that system? I realise that I am probably impinging on someone’s time, but I am concerned about the issue because there might be an automatic collateral impact on line managers if posts are regraded. The line manager concerned would then be dealing with a different set of circumstances — a different set of job descriptions and responsibilities. Does that get picked up as a result of a re-evaluation of that particular line-management post, or is it, in fact, automatically and incrementally adjusted? Does that not raise a question about the independence of the process? There was an example of a senior manager representing appeals, the result of which was the wholesale upward regrading of posts and the panel’s chairperson expressing concerns that the system was being abused.

176. Mr Haire: In that case, the senior manager who was involved was not the direct line manager.

177. Mr McLaughlin: I do not argue with that. However, he was a member of management.

178. Mr Haire: He was very much directly involved to ensure that there was not a collateral impact on the individual and that he or she would not have been affected in any way. The Department will write to the member with information on the detailed point that he has made.

179. Mr McLaughlin: Will the Department express in writing whether there is automatic and collateral incremental adjustment of line-managerial posts?

180. Mr Haire: The Department will certainly respond in writing on that detailed point. I understand the member’s concerns.

181. Mr McLaughlin: In order to plan for the future, the Department and the Committee will have to decide whether, in fact, sufficient independence and objectivity exists in the process.

182. Ms Purvis: I beg the Chairman’s indulgence. Some interesting points have been raised that I want to unpick, if I may. I want to return to Mr McGlone’s point about equal pay. The job evaluation exercise was intended primarily to guard against equal pay claims. Mr McGlone mentioned that as a result of the offer that is currently on the table, 68% of classroom assistants, the majority of whom are women, would be on pay protection. Ms McClenaghan mentioned a figure of 50%.

183. Figure 1 on page 22 of the report shows that the percentage of posts that were downgraded was 3%. The figure for classroom assistants who will be on pay protection — which is, in effect, a downgrade — is 50%. Will that not widen the gender pay gap? Given that the offer has not been universally accepted, will that not leave the boards open to equal pay claims?

184. Mr Haire: I will respond first, and I will then ask Ms McClenaghan to come in on the matter. One must be careful when considering those groups and comparing the figures. It has been recognised that the equal pay issue is a key driver of the entire process. An equality impact assessment of the job evaluation is nearing completion. The central management support unit has tried to keep closely involved in equality and equal pay issues throughout the process in order to ensure that it is seen to be robust with regard to gender. For example, work that was done by the Association for Public Sector Excellence in consideration of the proposed allocation for classroom assistants in order to benchmark it against other, similar offers throughout the United Kingdom shows that the association is happy with the proposal’s robustness and emphasises that it is at the upper end of offers for classroom assistants.

185. Ms McClenaghan: That, indeed, has been the outcome. Although it is still described as being in the market, it is at the higher end of the market. Therefore, one could make the point — reluctantly, perhaps — that so much protection is a statement that the current level of pay is relatively favourable.

186. Forgive me; I do not quite understand the point that was made about equal pay with regard to classroom assistants. Can the member explain it to me further in order that I can give her an answer?

187. Ms Purvis: According to the report and to yourselves, the main reason for carrying out the job-evaluation exercise in the first instance was to guard against equal pay claims. It seems that half of the classroom assistants — your figure is 50% — will be downgraded. The majority of classroom assistants are women. Does that not widen the gender pay gap? Does it not leave the boards open to equal pay claims?

188. Ms McClenaghan: We must remember that the determination of the job description, but, more particularly, the determination of the salary placings, were agreed with the trade unions. It was not, therefore, in their view, a concern for equal pay that those three salaries were chosen as appropriate for the classroom assistants. Like management, they would have recognised that the duties carried out by classroom assistants could be equated in job evaluations with other posts where the recipients were on those salary placings.

189. Ms Purvis: Those were salary placings that did not include change to the hourly pay-divisor or historical terms and conditions. I will leave it at that.

190. Moving on to other questions, paragraph 5.7 deals with the pilot exercise that proved to be flawed. Colin Jack referred to the exercise that was carried out in 1993-94. Had that been picked up at an earlier stage, the financial implications of the whole job-evaluation scheme could have been much better assessed.

191. Mr Haire: I agree with you. Initially, in the period 1995-97, the boards focused on individual cases. It was a slow process: they were processing only 200 or 300 each year at that stage. The shift was first identified in the processing of the librarians, the first large, generic group. That had an impact in 2000-01; it was only then that the boards realised the implications. However, that was a long way into the process.

192. Had the boards chosen some stronger generic unit earlier in the process, they would have discovered sooner the key cost drivers in the process. Lessons should have been learnt earlier: generic groups should have been selected in order to get a better sense of the process.

193. In the first five years, boards were absorbing the job evaluation costs of individual cases. However, the real issue was off their radar. People were being absorbed into the system, and more significant issues escaped them. From 2001 onwards, the Departments corrected the system, and from that time the process of monitoring generic groups was pushed strongly — except where, for various reasons that have been accepted, they had to go the other way.

194. Ms Purvis: On the subject of the boards absorbing the costs between 1995 and 2000, paragraph 5.8 of the report states that both Departments provided additional funding of £124 million. Does that not surely mean that because the boards absorbed those costs between those years, the total cost is substantially higher?

195. Mr Haire: The number of cases involved is about 1,500. Only some of them — 50% — will have been upgraded in the process. I am not sure how much more of the cost of upgrading the boards would have been able to absorb. Some of the £124 million relates to the boards’ recurrent costs, and as we have emphasised, approximately £75 million concerns the current allocations. The figure of £49 million represents the uplift. Therefore, the relative size of the upgrade would

Session 2007/2008

Seventh Report

Public Accounts Committee

Report on Job Evaluation in the Education and Library Boards

Together with the Minutes of Proceedings of the Committee relating to the Report and the Minutes of Evidence

Public Accounts Committee Membership and Powers

Table of Contents

Report

Appendix 1:

Appendix 2:

Appendix 3:

Appendix 4:

List of Abbreviations used in the Report

Executive Summary

Inadequate Planning Undermined the Job Evaluation Scheme

The Scheme has Taken Over a Decade to Implement

The Independence of Evaluation and Appeals Panels

There was Ineffective Financial Management

There was Insufficient Linkage to Productivity and Efficiency

Weaknesses in Departmental Oversight

Summary of Recommendations

Inadequate Planning Undermined the Job Evaluation Scheme

The Scheme has Taken Over a Decade to Implement

The Independence of Evaluation and Appeals Panels

There was Ineffective Financial Management

There was Insufficient Linkage to Productivity and Efficiency

Weaknesses in Departmental Oversight

Introduction

Inadequate Planning Undermined the Job Evaluation Scheme

Flawed pilot exercise

Recommendation 1

Absence of proper planning

Recommendation 2

Failure to adopt lessons and recommendations

Recommendation 3

The Scheme has Taken Over a Decade to Implement

Timeframe of implementation

Recommendation 4

Variations between Boards

Recommendation 5

Recommendation 6

The Independence of Evaluation and Appeals Panels

Recommendation 7

22. The Committee recommends that fully independent members with no trace of vested interest in the outcome should have the majority of seats on evaluation and appeals panels.

Recommendation 8

Recommendation 9

27. In agreeing any future job evaluation arrangements departments should ensure that they make use of skilled negotiators to ensure that a fair balance is struck between the interests of taxpayers and employees.

There was Ineffective Financial Management

Inability to provide actual cost details

Recommendation 10

30. The Committee urges the Department to ensure that, in future, the financial impact of major schemes is assessed and planned for at the outset. The Committee also recommends that regular review and monitoring measures are put in place to facilitate proper financial control by the Department.

The absence of business cases

Overspends in two Boards

Impact on Northern Ireland Block Funding

Recommendation 11

Recommendation 12

37. The Department must ensure that the new Education and Skills Authority adheres to the highest standards of financial management from the outset.

There was Insufficient Linkage to Productivity and Efficiency

Recommendation 13

41. The Department needs to be much more alive to the potential for achieving efficiencies. The Committee recommends that challenging and efficiency targets are set. The Committee would like a progress report on this in twelve months time.

Moving towards the operation of the Education and Skills Authority (ESA)

Recommendation 14

There is a need to benchmark administration costs

Recommendation 15

Weaknesses in Departmental Oversight

The Department adopted a “hands off” approach in the implementation of the scheme

Recommendation 16

Appendix 1

Minutes of Proceedings of the Committee Relating to the Report

Thursday, 29 November 2007 Senate Chamber, Parliament Buildings

5. Evidence on the NIAO Report ‘Job Evaluation in the Education and Library Boards’

Thursday, 24 January 2008 Room 144, Parliament Buildings

8. Consideration of the Committee’s Draft Report on Job Evaluation in the Education and Library Boards.

Appendix 2

Minutes of Evidence

29 November 2007

Report on
Job Evaluation in the
Education and Library Boards

Together with the Minutes of Proceedings of the Committee relating
to the Report and the Minutes of Evidence

Public Accounts Committee
Membership and Powers

Thursday, 29 November 2007
Senate Chamber, Parliament Buildings

Thursday, 24 January 2008
Room 144, Parliament Buildings