The Government notes the report on GBC of the Principal Auditor’s review of Early Exit Schemes. Whilst the Government fully supports and respects the importance of thorough auditing processes and the work of the Principal Auditor and his team, the Government is concerned that certain aspects of the report do not present a true, holistic reflection of the Government’s policy and the impact of the scheme on the Public Service as an organisation, both at systemic and operational levels.

It was actually the GSD Government that negotiated with Unite the Union to implement the Early Exit Schemes that have delivered the greatest reduction in staff levels and have cost the most, just weeks before the 2011 General Election. These schemes set a benchmark that was later used for other similar schemes.

The public works department at the time had 182 employees, and was replaced by the Housing Works Agency with 160 employees.  Since then, as a result of the Early Exit Package the number of employees has declined to 80.

The Principal Auditor says this has resulted in outsourcing of maintenance work and in the light of this extra expenditure questions the rationale for introducing the Early Exit Package.

The use of Private Sector Contractors appears to have been the rationale of the GSD Government for introducing the scheme in 2011.

If the Principal Auditor had gone back to the origin of the policy he would have realized that this was the case.

In 2011 the workforce in the Housing Works Agency were also given a pay rise of 25%, as a productivity bonus, for their cooperation in allowing private construction companies to do maintenance of Government estates.

The GSD agreement continues in force and has been honoured, as it has to be, by the present Government.

These factors increase considerably the cost since 2011 of the implementation of the GSD Early Exit Scheme.

The GSLP/Liberal Government has never initiated an Early Exit Scheme of our own accord, and each of the schemes entered into have been at the behest of Unite the Union or the workforce.

The GSLP/Liberal Government has, nevertheless, made use of Early Exit Schemes as a vital component of its human resource strategy, providing opportunities for voluntary exits while maintaining operational efficiency and supporting workforce transition and outsourcing of functions to deliver long-term efficiencies.

With this in mind, the Principal Auditor’s report has raised some issues that the Government wishes to clarify, not least because some relate to specific, potentially identifiable individuals who do not deserve to be negatively reflected upon.  

Discriminatory Implications on Age Grounds

The Government is concerned that the Principal Auditor’s conclusions may inadvertently suggest that an employee of normal retirement age as laid out in Government General Orders should not have access to such schemes. The Government’s position is that this would be tantamount to discrimination on the grounds of age, which is now illegal. It is now contrary to law to force an employee to retire based on their age alone.

The Government’s Early Exit Schemes are therefore designed to be inclusive and non-discriminatory, with eligibility criteria based on factors such as tenure and organisational needs, rather than just age. The Government is committed to promoting a diverse and inclusive work environment where all employees are treated with dignity and respect, regardless of age.

Misinterpretations

With the greatest respect to the Principal Auditor, the methodology employed in the audit process means that certain key data points may have been overlooked or misinterpreted. The report’s conclusions do not accurately reflect the comprehensive nature of the Early Exit Schemes on a holistic and operational level.

A driving factor for many of the schemes was the rejuvenation of the workforce or the outsourcing of function, which are both extremely difficult to implement without the buy-in of the workforce and its trade union. Where positions have been filled after an individual or individuals have left on an Early Exit Scheme, a compensating saving has been achieved from other government departments, agencies or authorities, which amount to real savings across the board.

Voluntary Separation Agreements

The Government also wishes to explain its position on Voluntary Separation Agreements (VSAs). This is a legal document between an employer and an employee, allowing the employee to resign from their position with no obligation or penalty. These agreements have been used when positions have been eliminated either directly or indirectly, and have delivered tangible long-term savings. VSAs are a widely used tool across different industries and are crucial when considering reform.

It is also important to state that every Early Exit Scheme agreement has been shared with the Principal Auditor prior to its implementation and not signed off until HIS input was considered. 

Furthermore, no payment resulting from an EES or VSA is paid by the Treasury without first being scrutinised and approved by the Principal Auditor, and consequently he would have had the powers to stop such payments if he felt that they were not appropriate. 

The Chief Minister, the Hon Fabian Picardo, said: ‘It is important to understand the conclusions of the Principal Auditor’s report with the full context of how and why Early Exit Schemes are agreed to by the Government, and the holistic, organisational impact that they have across the Public Service. That every EES and VSA is analysed and approved by the Principal Auditor before any payments are made is further vindication that these agreements are necessary tool of organisational development, efficiency and reform. That is not to say that we cannot continue to improve how these agreements are done, and to improve how we serve the public and how we manage our employee bank. For that, I obviously welcome the Principal Auditor’s report in this area, as I do in all others.’