THE EUROPEAN CENTRE OF EMPLOYERS AND ENTERPRISES PROVIDING PUBLIC SERVICES. Anticipation of Change in Public Services

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1 THE EUROPEAN CENTRE OF EMPLOYERS AND ENTERPRISES PROVIDING PUBLIC SERVICES Anticipation of Change in Public Services

2 Now more than ever, Public Services are under strong pressure due to the economic and financial crisis on the one hand and increased expectations from citizens on the other. Business as usual is not an option and Public Services are continuously confronted with doing better with less. Against this background, CEEP worked with ETUC and the sectoral social partner organisations in education, electricity, healthcare, postal services, public transport, railways and public administration to improve expertise in anticipation, preparation and social support during restructuring of Services of General Interest (SGIs). The aim was to provide a forum where the social partners in SGIs could discuss these themes in depth. On the employers side the partners included CEMR, CER, EFEE, Eurelectric, HOSPEEM, PostEurop and UITP. On the Trade Unions side, EPSU, ETF, ETUCE Eurocadres, Uni-Europa worked in the project. This work was possible thanks to the EU funded project Anticipation of Change in Public Services aiming, among other things, to bring together CEEP and European level employers organisations in SGIs into a Public Services Employers Forum. The Forum is designed to improve the quality and output of the European cross-sectoral and sectoral social dialogues related to SGIs. This shall be done by providing a new employers Knowledge Exchange facility. The Forum will also improve the voice of Public Services employers in the cross-sectoral social dialogue providing them with the opportunity to better coordinate their approach to the content and outcomes of the process. We have been working hard in recent years to shape the content and outcomes of the cross-sectoral social dialogue. Our aim was that it better serves and reflects the needs of Public Services organisations that employ almost a third of Europe s workforce. Ralf Resch, General Secretary of CEEP Public Services: a pillar of the European economy Public Services, also known as Services of General Interest (SGIs), are services whose provider is entrusted by a public authority (national, regional or local) with specific missions of general interest. These services can either be of economic or non-economic nature and their missions can include Public Service Obligations or Universal Service Obligations. They include services that are essential and strategic for the economy and for society such as: energy, public transport, postal services, education, etc. Public Services in Europe provide services to approximately 500 million inhabitants in Europe, ensuring the supply of key essential services. More than 500,000 enterprises provide these services. SGIs are a key element of the European economy both directly and indirectly. Directly, they contribute to more than 26% of the EU27 GDP. Indirectly their impact is even higher. Public Services consequently are of major importance when it comes to industrial relations and social dialogue: Public Services employ around 30% of the European workforce, corresponding to more than 64 million employees. Public Services are also essential investors as infrastructure networks contribute to more than 6.4% of total EU investments corresponding to more than 153 billion. 2 ANTICIPATION OF CHANGE IN PUBLIC SERVICES

3 Public Services: distinctive employment characteristics The experts report of the Anticipation of Change project identifies five key characteristics of employment in SGIs: SIZE Services of General Interest (SGIs) employ around 30% of Europe s workers and the impact of their efforts on both the quality of life of the population and the productivity and effectiveness of Europe s businesses is substantial. THE WORKFORCE The profile of the people who work in Public Services, the employment relationship they have and the nature of the jobs they do are distinctive. Public Services have been historically based upon long service, tenure-based career progression and, until recent years, protected from competitive pressures. The vast majority of jobs are strongly location sensitive and cannot be offshored in the manner that many manufacturing and technology based products and services increasingly can. Today older and long service employees face demands for improved service delivery using new technologies and management practices that are frequently heightening both the intensity and complexity of their work. TRADE UNIONS More than 50% of Europe s trade union members are found today in the Public Services and the trade unions play an important and influential role in the introduction of change. In SGIs, active social partners engagement in change is not just good practice, but is an essential part of the way of life. PREDICTABILITY Change is generally easier to anticipate in Public Services provision and the future directions of change are more certain than in other services. The evolution of the population and their demands are generally predictable; legislative change often has long lead times; international competition tends not to emerge or shift dramatically over short cycles; and technological change does not generally offer one supplier a substantial and rights protected competitive advantage over another. This gives Public Services leaders the opportunity to anticipate and the time to plan for change. It also means that the kinds of burning platform imperatives for change that often feature in the private sector model are much less keenly felt in Public Services. THE FUTURE Finally, and looking forward, Public Services throughout Europe face increasing pressure for change in terms of both the limits on public spending caused by today s enormous spending challenges associated with the financial and economic crisis of 2008 and 2009, and of population ageing increasingly affecting the nature and extent of demand for Public Services. These problems are already both extreme and acute in some of the EU s Member States. CEEP 3

4 Public Services: diverse backgrounds but similar challenges ahead On the basis of the project findings, although SGIs have varying characteristics and face a multitude of issues, common challenges apply to all: Security of future investment or financing For some years, governments have been struggling to balance a sustainable long-term approach to Public Services provision with the fiscal arrangements that support it while expectations from citizens towards essential services are rising. The economic and financial crises have put pressure on funding from public authorities, funding from citizens and the loans from banks, while the need for services remains high. Despite these serious limitations, the services still need to be provided and some of them on a 24/7 basis. How can continuous funding be ensured? How can continuous investment be ensured? How can purchasing powers of citizens be ensured if a higher part of their salary should be devoted to essential services (education, health, etc.)? Change of the nature of demand Citizens demands on Public Services are not just shaped by technological changes and the increased options it offers. They are also affected by the changing nature of the populations SGIs serve. The key themes here are population ageing and population diversity. Environmental issues Environmental issues represent a challenge also in the changes caused by higher environmental standards and the changes in the economy. This has an impact in terms of skills needed for all services. How to successfully integrate the ambitious environmental EU targets into the agenda? How to ensure to meet the new skills requirements? Technological change The changing nature of technology has influenced the expectations citizens have for all publicly provided services. Changing technology not only affects people s expectations relating to service provision but also increases the options for better service delivery. What will be the future needs in skills? Liberalisation, privatisation and increasing competition Sectoral liberalisation has led to the opening up of markets to new entrants with different practices and obligations. How to integrate the second-tier labour market into social dialogue? ISSUES, IMPACTS AND SOCIAL DIALOGUE OUTCOMES It is obvious that substantial change will happen, and it will continue to happen. But the extent to which the social partners can contribute to the better management of change in the interests of those who pay for Public Services, those who receive them, and the workers who deliver them, will be determined by the way social dialogue develops in the near future. During the Anticipation of Change project different sectors in SGIs compared issues that they are facing in terms of restructuring and anticipation of change. This led to the identification of similar themes and common issues: 4 ANTICIPATION OF CHANGE IN PUBLIC SERVICES

5 Similar themes The underlying themes of increasing competition and liberalisation; the modernisation of management and working methods; and the challenge of achieving more with limited or reduced resources were similar in all SGI sectors. Common issues The issues of current and future skills mismatch and of workforce demographics are common to most SGI sectors. Job losses were seen to be significant in each of the utilities sectors whilst shortages of workers were noted in health and education. Changing contractual relationships was CEEP specifically raised in postal services, public transport and central administration relating to workforce segmentation within and between organisations. THE EUROPEAN SOCIAL DIALOGUE ITS RELEVANCE AND IMPACT: WHY WE NEED TO WORK TOGETHER? The European social dialogue faces significant challenges that will need to be addressed in the near future. It is vital that SGIs employers work together to face them, overcome them, and as a result, create new opportunities. 5

6 Challenges HARD AND SOFT ISSUES All of the participating SGI social partners have undertaken work on equality, diversity and work-life balance issues and most have also worked on new skill development, transition management and employability. Whilst these issues are highly relevant to the challenges facing SGIs, there are other matters that are important to the current and future agenda that do not feature significantly. These include the management of job losses, outsourcing and increasing productivity. The analysis in the report explains that the social dialogue agenda in SGIs tends to be based more upon the selection of less controversial issues upon which a common view would be most likely. It also suggests that there are grounds for increased optimism in the recent work undertaken in electricity and post on identifying the future agenda and managing restructuring and outsourcing. This is unlikely to be easy, and today one or both social partners in some sectors feel either unwilling or unprepared to shift the agenda forward. Even where there is agreement, in some cases there are divergent views on the form any actions should take on difficult questions with trade unions typically looking for agreements and employers looking for softer forms of instruments. A failure to consider these issues together may however serve to divide rather than unite the social partners at a time when Public Services face significant pressures in these areas. PASSIVE AND ACTIVE OUTPUTS Not only do new issues need to be addressed, but the social partners should be more oriented to offering ideas and solutions rather than comments. When it comes to Public Services, the outcomes of today s social dialogue are more frequently joint advocacy statements aimed toward external stakeholders than they are toward developing a shared vision and diagnosis of future challenges and the development of practical tools to help deal with them. Advocacy on the importance of the provision of high quality Public Services and the need to manage change sensitively will remain important but the development of action-oriented solutions that can be picked up at other levels of social dialogue will become even more important to success. These challenges are being addressed by some SGI social partners and the way in which the social dialogue has developed over a relatively short time gives grounds for optimism. This is a pragmatic approach that needs to be developed further. Opportunities A PUBLIC SERVICES EMPLOYERS FORUM Public Services social partners share the view that they currently fail to exercise the influence that they might have on the shape and content of the crosssectoral social dialogue at the European level when the economic importance of Public Services and the size and distinctive nature of the workforces employed are considered. Looking back it is suggested that the cross-sectoral agreement on harassment and violence did not touch upon all the specific concerns many Public Services employers and workers face with respect to third party violence. Looking forward, work on flexicurity needs to capture the distinctive nature and challenge of flexibility and security in SGI workplaces. Moreover, the issue of jobs and the environment is at the heart of the agenda of SGIs that either see environmental issues as important to their future growth or for whom environmental issues are a substantial challenge to be addressed. In improving the voice of SGIs, most of the trade union participants in the project believed that better use of existing structures could facilitate solutions. Employers organisations on the contrary expressed the need to facilitate increased coordination and leverage at the European level. A Public Services Employers Forum would be the best way to go forward. LEARNING FROM EACH OTHER Whilst the challenges faced by SGI employers and the agendas and workplans of the European level crosssectoral and sectoral social dialogue committees in them were essentially similar, exchanges of information and best practice between them remain limited. SGI employers believed that the creation of a Knowledge Exchange facility, with an orientation toward anticipating change and managing it better, would help to deepen and improve the quality of the cross-sectoral and sectoral social dialogues. Report edited in the framework of a project co-funded by the European Commission. Sole responsibility lies with the author. The European Commission is not responsible for any use that may be made of the information contained therein. Partial reproduction of the information provided in this document is authorised provided the source and the commissioner of the report (CEEP) are mentioned. 6 ANTICIPATION OF CHANGE IN PUBLIC SERVICES

7 As we look forward, the fact that substantial change will happen is not questioned. It is generally agreed that in many cases the direction of change is clear. On the other side it is also evident that in many countries there are increasing tensions in the social dialogue environment associated with new financial challenges and their impact on Public Services terms of employment and working conditions. Increasing service delivery flexibility against a background of reduced income or security is a substantial demand to place on workers and poses a significant challenge to those involved in securing employee commitment to, and engagement in, the change process. The European social partners have choices in the way that they approach what will be a difficult future and the decisions that they need to make are not easy. Working together, the European employers in SGIs can contribute to the setting of a European context that contributes to the better management of change in the interests of those who pay for Public Services, those who receive them, and the workers who deliver them. The challenges in doing this should not be underestimated and we should be united in overcoming all potential obstacles. CEEP 7

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