The coalition is winning on redundancy; it should be generous

The wrangling between the government and the unions over the civil
service redundancy scheme is slowly turning into a full-scale
industrial dispute – and one with the potential to cause misery all round.

    The government doesn’t want this argument: it has enough on its
plate without seeing public services seize up in a series of strikes and
demonstrations. The public, scarred by their own recession-related
troubles and increasingly dependent on those services, don’t want
them disrupted either. And five of the six civil service unions came
to a compromise with the last government months ago, and counted
themselves lucky to have a pretty good deal in place before the Tories –
with their much more robust approach to the unions – came to power.

    However, the PCS wanted more. It’s not clear what Mark Serwotka
hoped to achieve by killing the reformed redundancy deal – after all, the
other unions had long been warning that if the unions took the judicial
route, the government would take the legislative one – but he can rely
for support on a genuine anger felt across the public services. Thousands
of staff face losing their jobs because the government has picked up the
tab for a recession caused by over-powerful markets and over-greedy
financiers. They think that this is unjust – they’re right. Many also think
that these cuts can be reversed – and here, unfortunately, they’re wrong.

    This government – Tories and Lib Dems alike – is now utterly tied
to its agenda of massive cuts in public spending. And whether you think
the policy is well-judged or not (this newspaper has argued that the risks
probably outweigh the dangers), the coalition will not allow itself to be
blown off course by union opposition.

    The Cabinet Office knows that the unions are deeply divided, with
the five smaller unions angry that the PCS has wrecked their agreement.
It knows that, in the threat of legislating to write a new settlement, it has
a powerful weapon. And it knows that the public, having experienced
redundancies and pay cuts across the private and voluntary sectors, will
have little patience with public employees reluctant to swallow the same
medicine. In short, it has the upper hand; the unions will have to settle.

    However, there is another factor. The government has big ambitions
for reforming public institutions; for encouraging inventiveness and
creativity among civil servants; for freeing officials to innovate in the
pursuit of efficient and effective services. It won’t get far on this agenda
if its workforce feels bullied, cheated and resentful. So there is an
incentive for the Cabinet Office to compromise, moving far enough
on the core issue – the caps on compulsory and voluntary redundancy
payments – to make the inevitable redundancies affordable from the
Treasury’s perspective, but bearable from the staff ’s.

    This dispute has already proved unpredictable: the PCS’s court victory
surprised many. And while strikes look likely, they are not inevitable. After
all, the Cabinet Office has just seized a big chunk of ground on redundancy
payments; if it gives a little back, we might find a happy medium.