Role and Operation of the States Employment Board (R.35/2019): Executive response with comments of the Public Accounts Committee

STATES OF JERSEY

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ROLE AND OPERATION OF THE STATES EMPLOYMENT BOARD (R.35/2019): EXECUTIVE RESPONSE WITH COMMENTS OF THE PUBLIC ACCOUNTS COMMITTEE

Presented to the States on 28th May 2019 by the Public Accounts Committee

STATES GREFFE

2019  R.35 Res.

FOREWORD

In  accordance  with  paragraphs 64–66  of  P.56/2018,  the  Code  of  Practice for Engagement  between  Scrutiny  Panels  and  the  Public  Accounts  Committee'  and the Executive'  (February 2018),  the  Public  Accounts  Committee  presents  the Executive Response to the Comptroller and Auditor General's ("C&AG") Report on the Role and Operation of the States Employment Board' (R.35/2019, presented to the States on 29th March 2019).

Comments of the Public Accounts Committee

1. The  Employment  of  States  of  Jersey  Employees  (Jersey)  Law  2005 established the States Employment Board ("SEB") as the statutory employer of all States employees. It is chaired by the Chief Minister, or their nominee, and comprises 2 Ministers or Assistant Ministers and 2 other members of the States Assembly.
2. The C&AG's Report, which was published on 29th March 2019, recommends a fundamental review of the framework for the oversight of human resources of the States. Noting that staff costs make up over 30% of States expenditure, the PAC welcomes the Executive Response which recognises the scale of the change needed. The corporate HR function has been under-resourced, and this needs to be addressed as a matter of urgency.
3. The PAC recognises that the C&AG's Report, whilst critical of the structures, design arrangements and governance of SEB, does not blame the Board's shortcomings on the individual members. There has been no comprehensive review  of  the  operation  of  SEB  since  its  establishment,  and  the  current legislation  and  governance  arrangements  are  no  longer  fit  for  purpose  to enable  SEB  to  discharge  its  duties.  The  PAC  understands  that  any  new members of SEB would face the same problems and difficulties that current members have faced, due to the existing framework. It also notes that the SEB members  have  co-operated fully with the  C&AG in working through the ramifications of the report, culminating in the comprehensive response which accepted all the recommendations.
4. The PAC concurs with the C&AG's statement that formulation of a People Strategy' is essential to help set the direction for the future. The strategy should include the States' future workforce requirements, the assumptions, values,  beliefs  and  aspirations  which  guide  SEB  as  an  employer,  and information on how SEB intends to discharge its statutory duties. This should be linked to key strategic HR policies.
5. The Executive Response indicates that most of the recommendations accepted by the Government are to be implemented by the Director of People and Corporate Services. The PAC notes that the current holder of this post has been  appointed  on  an  interim  basis,  and  is  therefore  concerned  that  the necessary changes will be delayed when a new Director is appointed. The Director, together with the Chief Operating Officer and Director General, will need to monitor and provide assurances to the Board that improvements are not just initiated, but also sustained.

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R.35/2019 Res.

6. The SEB should focus on key strategic areas; for example, monitoring the benefits secured by organisational change, controls over the total number of people employed, and staff training and development. It should have access to up-to-date information and therefore be able to know how well people are performing,  and  whether policies are aligned to the  overall values of the organisation. It should also concentrate on the development and maintenance of Employment Codes of Practice with supporting HR policies and guidance, and developing robust arrangements for ensuring the health, safety and well- being of employees. Focussing on these areas and developing an effective way to monitor implementation will enable the SEB to effectively discharge its duties as the employer.
7. The PAC will invite members of SEB, the Director General, and other senior officers charged with implementing the recommendations of the C&AG, to a meeting in early 2020, to update the Committee on progress.

Senator S.C. Ferguson

Chairman, Public Accounts Committee

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R.35/2019 Res.

States Employment Board

The States Employment Board response to the C&AG audit Role and Operation of the States Employment Board

Contents

1. Executive Summary ...................................................................................3.
2. Findings in the Report

1. What the C&AG review set out to do ......................................................5.
2. Why this review was important ...............................................................5.

3. What the response is to the findings ........................................................5.

4. How the findings of the reivew will be considered ..................................6.

1. Legislative, deisgn and governance arrangements ................................6.
2. The People Strategy ...............................................................................7.
3. Working practices – common themes.....................................................8.
4. Board Development ................................................................................9.
5. Identyfying quick wins.............................................................................9.

5. Resources .................................................................................................10.

6. Timelines for delivery ...............................................................................10.
7. Conclusion ................................................................................................11.

1. Executive Summary

This report and action plan is a response to the findings of the Comptroller and Auditor General (C&AG) in the report entitled Role and Operations of the States Employment Board' (SEB) which was published on 28 March 2019.

Due to the timing of the C&AG's review, SEB members were unable to participate however, SEB have actively engaged with the C&AG to discuss the findings and to share the draft response to the audit before publication.

As part of their ongoing dialogue with the C&AG the Board recently met with her to discuss points of clarification within her report. During the meeting the C&AG emphasised that the context of her report was not about the current members of the board, rather she confirmed that it is about structures, design arrangements and governance, and the changes to these will enable the SEB to effectively discharge its duties as the employer.

The Employment of States of Jersey Employees (Jersey) Law 2005, was enacted 14 years ago and it is this law that established both SEB and Jersey Appointments Commission (JAC). A number of amendments have been made to this law which governs the functions of the SEB, however, this is the first review by the C&AG of this law and it is this statutory instrument that has been described by her as no longer fit for purpose.

The focus of the report deals with four areas of review:

• the effectiveness of the design of arrangements for appointments and employment of States of Jersey Employees
• the effectiveness of SEB in discharging its functions
• the effectiveness of arrangements for securing compliance with the Employment Codes of Practice issued by SEB and supporting policies
• and the effectiveness of arrangements for monitoring progress in implementation of the C&AG previous recommendations of human resources management.

The ambiguity of the design arrangements which SEB is governed by and articulated by the C&AG provides an evidence base and insight for framing a root-and-branch review of legislation, governance, strategic oversight and the Board's working practices. It is clear from the review that, over time, the current legislation and governance arrangements have become no longer fit for purpose to enable SEB to discharge its duties, nor do they represent how a modern employer makes decisions in relation to its strategic human resource management.

The States Employment Board has already recognised the importance of a People Strategy to act as a reference point for decision making. The People Strategy will also act as a tool to monitor and provide assurances to the Board that improvements are sustained across a wide and diverse range of initiatives, some of which are already underway. The People Strategy will form part of the Government Plan which will deliver the Common Strategic Policy of which one of the five ongoing initiatives is

"a modern, innovative public sector that meets the needs of islanders effectively and efficiently"; the People Strategy will contribute to that initiative.

In addition to the C&AG report, Team Jersey's partners, TDP, have published their independent Phase 1 report and recommendations, which will also inform the People Strategy. SEB, as the employer, welcomes the Team Jersey report recommendations and its continuing contribution to building a positive workplace culture across the organisation.

The SEB recognises that they must be supported by effective human resources management in order to discharge their duties and responsibilities. Accordingly they have requested that appropriate resources are provided to assist them to make the necessary changes. Without additional resources it will not be possible for officers to deliver the level of change required to respond effectively to the recommendations of both the C&AG and TDP.

SEB concluded that the report helped to shape their view in regard to the improvements they want to see as the employer. They concur with the findings in the report that this change will take time and it is not about short term fixes.

The States Employment Board welcomes the report and recommendations from the C&AG and this response acknowledges the commitment of the Board, and officers, to see through the changes to legislation, governance and working practices, all aimed to improve their ability to continue to provide strategic direction and oversight as the employer.

The States Employment Board thanks the C&AG, Karen McConnell, and her team, for their report and recommendations.

2. Findings in the report

1. What the C&AG review set out to do

On the 28 March 2019 the Comptroller and Auditor General (C&AG) published a report entitled Role and Operations of the States Employment Board'. The objectives and scope of the review was to evaluate performance in four following areas:

• the effectiveness of the design of arrangements for appointment and employment of States of Jersey Employees
• the effectiveness of SEB in discharging its functions
• the effectiveness of arrangements for securing compliance with the Employment Codes of Practice issued by SEB and supporting policies
• the effectiveness of arrangements for monitoring progress in implementation of the C&AG previous recommendations on human resources management.

2. Why this review was important

This is the first review that has been undertaken by any C&AG in relation to the

role and operations of the States Employment Board. A number of amendments have been made to the Employment of States of Jersey Employees (Jersey) Law 2005 which governs the functions of the SEB, however, this is the first review by the C&AG of this law and it is this statutory instrument that has been described by her as being no longer fit for purpose. The review found ambiguities and gaps in the structural design and governance arrangements, and no duty to monitor the human resources management compliance and effectiveness, especially in relation to the Codes of Practice.

3. What the response is to the findings

The current Board members were appointed following the election of a new Government and on taking up their appointment they recognised the need to improve current working practices. The new Board was also formed at a time when the public service was starting a significant period of change, in parallel with wide- ranging and complex pay negotiations, following the rejection by employees of the Workforce Modernisation proposals. The Board was therefore immediately dealing with a series of urgent and important issues, with little time to settle in and establish new Board working practices.

SEB recognised the criticality and complexity of the pay negotiations, and the Board's role in providing strategic direction and making evidence-based decisions. Often responding to the need to reprioritise the agenda, attending unscheduled meetings and juggling other items on the agenda. SEB has recognised the need for a fundamental review of the governance arrangements. The legislation and governance that the current SEB inherited, and is required to comply with, are no

longer fit for purpose and these sit at the heart of what needs to change, in order for the Board to discharge its duties more effectively and efficiently.  

SEB is taking the opportunity to raise the operating standards of its meetings and has given clear direction on its expectation. This covers such areas as agendas, minutes, timeliness of paperwork, reports that articulate the decisions required, and actions that are followed through.

SEB members adopt an agile, modern way of operating, making themselves available for briefings and discussions with officers, in order to improve timely decision making and ensuring that they are kept fully informed of any emerging matters that may require their attention. This style of working will need to be codified within any new governance arrangements and relationship with officers. Furthermore the Deputy Chair of SEB has been appointed as political lead for the People and Corporate Services team.

4. How the findings of the review will be considered

The C&AG recommendations, and an action plan detailing the responses, are attached to this response. The Board has categorised the findings into the following areas:

• The legislative, design and governance arrangements
• The development of a People Strategy
• Working practices – common themes
• Board development
• Identifying and implementing quick wins

The C&AG report has evidenced a number of weaknesses in legislation and governance, and the gaps in these arrangements have added to the ambiguity of how SEB operates. These are detailed in the recommendations and action plan.

The reference to the absence of oversight of Arms Length Organisations needs careful consideration, because SEB, in most cases, is not the employer of these organisations. However, the Board recognises that it is important to be involved in any reviews or changes to legislation as and where appropriate that may change the functions or duties of SEB. The Board are also aware that the C&AG is conducting a review in relation to Arms Length Organisations and are awaiting the publication.

1. Legislative, design and governance arrangements

The Employment of States of Jersey Employees (Jersey) Law 2005 established the States Employment Board as the Employer' and as a body corporate is delegated powers by the States Assembly to carry out its functions. A review of the Employment of States of Jersey Employees (Jersey) 2005 Law is being led by the Director General of Strategic Policy, Performance and Population who, along with the Director of People and Corporate Services, will work with SEB to develop an approach to this review.

This law covers the functions, governance, membership and operation of the SEB, and the functions and operating practices of the Jersey Appointments

Commission (JAC). This review is fundamental, because the law was enacted 14 years ago, and during this period a number of amendments have been made however, changes to employment matters have evolved since this time.

The ambiguities that the C&AG refers to are in part consequences of recent legislative changes, for example the establishment of a Principal Accountable Officer, the development of one government, and the fact that over the last 14 years employment law and best practice in relation to human resource management has changed considerably. Other considerations need to be factored in such as the demographics of the workforce and what the future generations will expecting from their employer.

The next generation joining the workforce is known as generation z' (born after 1995) now representing approximately 24% of the workforce worldwide. In the Government of Jersey this represents 1.3%. It is this generation that is demanding a different relationship with their employer. They are known as career multi-taskers' and will move seamlessly between roles and organisations, with the expectation that learning is a social interaction and on demand.

SEB are very much alive to the fact that, as the employer, it is this generation that they need to attract and retain, and changes to culture, policies, process and systems need to exceed their expectations.

Alongside the C&AG's review, and taking into account the legislative changes, SEB will be commissioning a review of its working practices to include how the Board seeks assurance and monitors progress against the duties it has delegated to senior officers to discharge on SEB's behalf.

2. The People Strategy

SEB has already identified the need for, and the time is right to develop a People Strategy. This strategy will form part of the Government Plan 2020-23, and will set out the vision for a workforce for the future.

As the employer SEB will be setting the vision and strategic direction and this will be codified within the strategy that will enable the organisation to learn and continuously improve.

Some elements of the People Strategy are already being developed. This tactical approach is being driven by the emerging needs of the organisation and the evidence that many of the human resources best practices are not in place. Where they are in place they are not linked to a wider strategy or are unsustainable in the current format. This reflects the findings of the C&AG report and with which SEB agree.

Although there is currently no overarching strategy in place, there is a considerable amount of work being undertaken with knowledge of how it will contribute to the strategy. The C&AG report mentioned that a People Strategy will provide SEB with the understanding of how everything fits together, ensure the focus is on the highest priorities, and that a balanced approach is taken between proactive and reactive matters.

The tactical approach already adopted has led to progress being made in the following areas:

• A new performance appraisal system is in place – My Conversation My Goals.
• A review of the organisation's employment policies is underway, aligning them to the work that Team Jersey is doing to develop a positive workplace culture. Early evidence of this are the new Bullying and Harassment, and Whistleblowing policies, which came into effect in January 2019. These policies importantly, include how an employee can raise their concerns via a dedicated speak-up line which is available 24 hours a day, 7 days a week, 365 days a year.
• A review of pay and reward has been commissioned by SEB and is to be completed by the end of 2019.
• Beginning to develop an approach and programmes for early careers, graduates schemes, apprenticeships and internships. This supports the need already identified to grow our own talent, and proactively looks at the age profile within the organisation.
• Investing in a digital learning platform, which will provide training and development for employees. It will be agile and efficient, deploying learning at a time and place to suit the needs of the organisation and employees. An example of this has been the GDPR training, which was rolled out in 2018.
• Exploring how we will grow our own talent and identify what support our people need to reach their career aspirations. This will link to the needs of the organisation through workforce planning, which will start in the autumn.
• We are improving our induction, so new employees are welcomed to the organisation, quickly feel part of the team and are able to start making a contribution.
• The recommendations from Team Jersey's Phase 1 report which is all about culture and systems change are being incorporated into the plan for a People Strategy.
• We are establishing and developing a leadership cadre which role models the aspirations, values and behaviours of the organisation.

SEB provides strategic oversight to these initiatives and is committed to monitoring the outcomes and benefits. The work already being achieved is putting in place the building blocks which can be reported against.

3. Working practices – common themes

There are 20 recommendations in the report. Two of the recommendations are in relation to the design arrangements which require a root-and-branch review of

the legislation, governance and functions of SEB in order for it to operate effectively as a modern employer. The third recommendation is the establishment of a People Strategy. The majority of the recommendations are about the effectiveness of SEB in discharging its responsibilities and these can be grouped into a number of common themes that provides SEB with corporate oversight and high level assurance.

Going forward SEB will receive a quarterly report including but not exclusive to,

• Management information tracking KPIs on human resources matters
• Health and Safety and Wellbeing
• Monitor and track the progress of audits that include human resources management
• A risk register of the human resources risks and issues at a corporate level
• People Strategy progress report
• An update from Team Jersey.

All of the above and other reports that are presented to SEB will provide the Board with strategic oversight and assurances that their delegated authority is being managed appropriately and evidenced. More importantly there will be early signs of where issues and risks are emerging and these can be dealt with in a timely way.  

4. Board development

SEB is committed to developing as a Board and as part of this review it will be working with its independent advisor and senior officers to develop a plan. In the meantime, where the Board considers they require training or development this will be provided as and when required.

The Board has already been developing its understanding of issues as they have arisen and members are diligent in their preparation for meetings and in seeking clarification when needed, and the questioning of officers in relation to their reports.

5. Identifying quick wins

• SEB is already raising the standards in terms of the quality of reports and evidence from officers prior to decision making.
• SEB recognises the need for a balanced agenda and has requested that officers work with the Board and the independent advisor to develop standing items, a report template, a forward plan and, where necessary, hold additional meetings to deal with one item which is a priority at the time.
• SEB has been involved in the approval of organisation change structures. SEB is seeing all the departments proposed Target Operating Models prior to the start of employee consultation. SEB's role in this matter has been to seek

assurance that employee policies and human resources management is being adhered to.

• The States Greffe has suggested there is an opportunity to improve the way that minutes and actions are recorded and will discuss a proposal with SEB at a future meeting.
• The next SEB annual report will be published in June 2019. The report format and content is being reviewed to take into consideration the recommendations of the C&AG. It is also proposed that in December 2019 an interim report is produced to represent the progress being made.
• A review of the employee policies has created policy families' and these are now aligned to the Codes of Practice. Policies are now developed using this framework, which provides a simpler way for SEB to discharge its duties through the Codes of Practice and employee policies.

5. Resources

The C&AG has confirmed that the corporate People Services function has been under-resourced and this needs to be addressed to help secure the changes urgently needed. The development of a comprehensive People Strategy to set the direction and drive implementation will also require funding for this to be achieved.

The States Employment Board has no allocated budget or dedicated resources to support the discharging of its duty. This is also the same position for the Jersey Appointments Commission.

Both the Board and the Jersey Appointments Commission (JAC) require a budget. The People and Corporate Service directorate has recently undertaken a comprehensive review of its budgets and is in the process of submitting a business case for additional funds. The business case includes a proposal to fund secretariat support for both SEB and JAC, funds for SEB to commission work, and funding for JAC to operate with independence.

A second business case is being prepared to fund the People Strategy and includes the resource requirements to fund C&AG recommendations.

6. Timeline for delivery

The timescales for delivery will be for the work to start in 2020. There is a significant amount of work in relation to the legislation and governance aspects and the benefits of the People Strategy will take at least 2-3 years before the real, sustainable, benefits are seen to be having a positive effect on the organisation and its employees.

7. Conclusion

The States Employment Board and officers have welcomed the C&AG's review. This response to her report and the robust action plan demonstrates the undertaking and commitment of the Board. Alongside this action plan the Board will continue to address current pressing issues and strengthen the progress already being made.

States Employment Board Response:

Review title: C&AG Review: Role and Operations of the States Employment Board - Executive Response to PAC by Monday 17th May 2019

Summary of response See attached.

Action Plan

Recommendations not accepted

After clarification with the C&AG on the interpretation on the People Hub there are no rejections to the recommendations.