Public sector cuts? Bring on the interims

For the first time since tracking began in 2006, the number of public sector interim management placements has outstripped the demand in the private sector.

For the first time since tracking began in 2006, the number of public sector interim management placements has outstripped the demand in the private sector. According to the Interim Management Association’s (IMA) Ipsos MORI report, 51% of all completed interim assignments in the second quarter of this year were in the public sector, up from 43% in Q1.

Great news for public sector interim specialists, as well as the interim agencies placing them. Or is it?

With provisional estimates revealing that in August the public sector had a current budget deficit of £12.8bn and a net debt of £804.8bn, Prime Minister Gordon Brown was forced to admit to the TUC on 15 September that he would “cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets” throughout the public sector. And later that week, Chancellor Alistair Darling began meeting cabinet colleagues to thrash out where possible savings could be made.


With cuts in spending inevitable, organisations will be under pressure to work smarter — and that’s where specialist interims come in


So what will the effect of proposed cutbacks have on interim placements within the public sector?

I’m a bit cynical of Gordon Brown’s

Tom Brass, chairman of the Institute of Interim Management, is not convinced such cuts would take place this side of the general election. “I’m a bit cynical of Gordon Brown’s use of the ‘c’ word,” he told Recruiter. “These proposals for cuts will probably not be fully published until after the election next year.”

However, he concedes that any reform of the public sector would be an opportunity for interims. “They are the experts who can achieve change quickly and then move on. However, as for the impact on the number of interims, I think we have to wait and see.”

Gwen Carter, director of Capita Interim Management, which specialises in placing interims solely in the public sector, also agrees that the situation regarding proposed cutbacks and the use of interims is hard to call. “Where’s my crystal ball?” she quips. “The public sector hasn’t been hit as badly as the private sector thus far, because public sector budgets are set that much further in advance. The next quarter will be the most telling for Capita.

“The cutbacks could have either a negative or positive effect on interim usage. In some organisations, they could cut back on permanent positions and become so lean that they would eventually have to go to the market for an experienced interim.”

Although interim placements in the public sector is a relatively small part of our business

Ian Gooden, director of resourcing solutions at HR recruiter Chiumento, says that the public sector is looking more and more to private sector expertise: “Although interim placements in the public sector is a relatively small part of our business [20%], over the past 18 months it’s been increasing. We have picked up more assignments.”

With the figures supporting the rise in interim use by public sector organisations, Paul Botting, chair of the IMA, says that over the past few years the public sector has bought into and its wide-ranging expertise in everything from change management, finance, procurement and CEO support to turnaround support. “With cuts in spending inevitable, organisations will be under pressure to work smarter and more efficiently, and that’s where specialist interims come in,” he explains.

Interim experts believe that it’s wrong to talk of public sector cuts. The key focus should be on efficiencies and improving productivity and structures.

“Rather than the negative vibe surrounding cuts, the focus should be on looking to interims to improve the capabilities and skills [in an organisation]; they are an integral part of management,” explains Clive Bennett, client services director at executive interim provider Brooklands Executives.

Mike Hollin, head of public practice at interim provider Alium, also believes a more positive approach is called for: “The so-called cuts that are spoken about are, in fact, a massive opportunity for public sector transformation. The organisation of the public sector was fine for the late 20th century, with government departments operating in separate silos. Shared services are needed and the outcome would, of course, be cuts but it would make the public sector more streamlined and more cost-effective.

“There’s a huge opportunity for the interim community to provide value for the tax payer, because as a tax payer myself it really grates when I see inefficiencies,” he told Recruiter fervently.

Charles Russam, chairman of interim specialist Russam GMS, also thinks the negative perceptions around the ‘c’ word are misplaced: “What I think they [politicians] will genuinely try to do is to create efficiencies as opposed to reducing the level and quality of services. Interim management has a legitimate and compelling argument to be part of this process.”

Although he doesn’t know what effects cuts in public spending will have on interim placements, Russam believes it will reduce interim management volumes, though this may be mitigated by a substitutional switch away from consultancy.

Alium’s Hollin agrees: “Historically the public sector turned to consultancies for advice as well as delivery; whereas interims charge a third of the day-rate as consultancies.” Bennett also says organisations need to think about their use of consultancies. “Although the perception of cuts would involve reducing consultancies, and interims would be included in that, wiser heads know they can’t do without them. Unions don’t differentiate between interims and consultants.”

But he argues: “Interims are part of the solution — their success depends on delivering the brief they’ve taken on, so it’s imperative they do a good and efficient job.”

Government agencies

Nick Diprose, managing director at BIE Interim Executive, believes that consultants, which cost the public section millions of pounds, will go. However, this will mean more “heavyweight interims”: “Government agencies can’t survive without pulling in people who can come in from a standing start and hit the ground running.”

The reliance on consultancies certainly seems to be changing, particularly in the NHS. In April, public service improvement company Solace Enterprises and government body NHS Employers launched NHS Flexible Resourcing, a joint venture focusing on providing interim senior management in the top three or four tiers in the NHS.

Rita Sammons, director at Solace Enterprises, told Recruiter that the actual way that interims are used is changing.

“The trend across the public sector, not just in the NHS, is for less use of consultancies when times get tough,” she explains. “The NHS is looking for more innovative solutions, increasingly using interims for service review and restructuring assignments — change management-type roles in preparation for a new person coming in.”

At Camden Council, resourcing manager Suraj Pandit says the council typically uses interim professionals in a senior management capacity to manage a period of change. He is continually reviewing the way the council uses interims.

“Any future cutbacks will reshape the use of interims,” he says. “Rather than cuts, public sector organisations will have to use resources, including interims, more wisely as and when required. Measures taken over the next 10 years will make for a leaner public sector. Councils need to confront the challenges and Camden Council is getting better at developing a workforce to help achieve this.

“If we don’t have the skills in-house, then we’ll go to specialist interim recruitment agencies. It’s all about using resources wisely, project by project. Our staff are committed to make a difference to people’s lives and future interims should buy into this ethic. Any interim we use needs to have the Camden Council passion,” he explains.

With no one claiming to predict the future, short term the view is that more interims will be needed to help drive forward the much needed efficiencies in the public sector on which everyone is agreed.

Revenue growth of almost £4m in Norman Broadbent year-end results

Norman Broadbent has revealed its best financial results in over a decade.

Financials 27 March 2024

APPOINTMENTS: 18-22 MARCH 2024

This week’s appointments include: Heidrick & Struggles, Institute of Student Employers, QLM Search

People 18 March 2024

APPOINTMENTS: 4-8 MARCH 2024

This week’s appointments include: greenbean, NRG, Pertemps, The IN Group

People 4 March 2024

NEW TO THE MARKET: 4-8 MARCH 2024

This week’s new launches include: Connect Appointments, Eventus Recruitment Group, Granger Reis, Localyze, The Intersection Network

New to Market 4 March 2024
Top