International Labour Process Conference 2011

International Labour Process Conference 2011

Bob Carter, Andy Danford, Debra Howcroft, Helen Richardson, Andrew Smith and Phil Taylor

State sector ‘modernisation’, labour process change and trade union responses. The case of HM Revenue and Customs.

The Coalition government in Britain has, largely successfully, transmuted the crisis that emerged from massive liquidity problems and potential collapse of the banking sector into a problem of too much public expenditure (Irvin et al. 2010). Labour, the argument goes, had through uncontrolled public spending left the incoming government with a massive deficit and the prime task of responsible government policy is to lower and then remove the deficit with the bulk of reduction to be achieved through cuts in spending on public services. Hence the 2010 comprehensive spending review (CSR) sought to reduce the costs of administration in government departments. Chancellor George Osborne estimated that 490,000 public sector jobs would be cut over the five-year period. There are enormous doubts about the Coalition’s argument, not least because the deficit was caused largely by a shrinking tax base rather than a change in expenditure patterns, a problem that will be exacerbated by cuts and rising unemployment (TUC 2010).

Whatever the claimed novelty of government economic policy, its political presentation masks continuities with those of the previous Labour administration in the area of concern here – the civil service and particularly HMRC. As a result of the 2010 CSR there is a planned 25% spending cut at HMRC over the four years covered by the review. Lesley Strathie, HMRC’s Chief Executive and Permanent Secretary, informed PCS in October 2010 that there would likely be 19% average cuts across all HMRC departments (PCS GEC 2010). By April 2015, there will be 56,000 full-time equivalent members of staff, a 16% reduction from the current number of 67,500. Despite the severity of these reductions, however, they are in line with an already established trend. Since its formation in 2005 the department has lost 25,000 staff.

No one has made the case that staff reductions are a result of the declining volume and importance of the work of HMRC. Each job loss therefore has implications of work intensification for remaining staff, increasing the significance of the nature of the labour process. PCS, the main union representing staff at HMRC is opposing these cuts but its record of responding to changes to labour process that area corollary of the cuts has been ineffectual. This article takes as its focus the difficulties that PCS members have encountered when opposing changes associated with the introduction of Lean, the principal management instrument for rationalizing HMRC’s tax processing work. In particular it seeks to explain why PCS, with a national leadership recognized as being left wing, with a union density of around 80% (Beale 2005), and with members taking action against Lean and expressing willingness to go further, has not been able to turn opposition into a force capable of securing from HMRC meaningful changes. Influences on union practice are examined, from union traditions and the effect of new leadership, through the end of partnerships with management and the reassertion of managerial prerogatives, to the union’s interpretation of organizing. Focusing on events leading up to and following a sectional PCS dispute, rich empirical data are then marshaled to examine the questions as to whether union reactions to Lean are the reassertion of older forms of relationships with employers that override the need to challenge even greater incursions into members’ workplace controls.

Job losses and the impact of Lean

As noted, over the last five years the department has reduced its staffing complement to just over 67,500. Staffing levels in the Civil Service have been under pressure since the publication of the Gershon Report on the efficiency of the public sector in 2004 and as reductions indicate the effects have been clear in HMRC. The methods to secure savings advocated by the report, namely the rationalization of staffing, closure and concentration of operating sites and the simplification of processes were those adopted by HMRC. More than 200 local tax offices have been closed and HMRC is in the process of closing or radically reducing the opening hours of 200 walk-in tax enquiry centres. A reduced workforce, concentrated into large processing sites, using simplified and standardized operations would, it was hoped, produce efficiency savings and a higher quality of service. Changes to the work process were introduced in 2006 under a programme entitled Pacesetter that had a number of components:Leadership Development; Operational Management;Lean; and Workforce Strategy and Capacity Management. Its objectives were to deliver 30% efficiencies in terms of headcount by the end of the 2007/2008 financial year, whilst improving the customer experience, quality and effectiveness. Of these components it is Lean that is central. As Radnor and Bucci (2007: 11) realize ‘OM/SL [Operational Management/Senior leadership] aims to ensure leadership successfully address cultural and behavioural challenges as a key to the ongoing sustainability of Lean. It focuses on performance’.

A series of papers (Carter et al 2010a; Danford et al. 2010) have shown that staff believed work in HMRC had been degraded through work study, the fragmentation of tasks, the routinisation of work though standard operating procedures, the issuing of arbitrary targets, hourly monitoring of performance and the increase in authoritarian management. The result has also led to increase health and safety problems and to poorer public service (Carter et al. 2010b; Carter et al. 2011). The question that has not been answered, and the subject of this paper, is why, despite overwhelming opposition from union members, there has not effective action against these changes.

Labour process and trade unionism

The labour process is integral to the experience of employees at work and conditions their willingness or otherwise to join unions and take action. However, as writings on union revitalization in the US demonstrate, there is a disjuncture between labour process concerns and concerns with unionization. Despite arguing that links remain through a number of individual texts, Burawoy (2008:383) notes; ‘Critical labor studies turned from the degradation of work and its regulation to an open attempt to reverse the decline of unions’. In Britain, there are writers influenced by the US literature focusing on union revitalization and attempts to implement the ‘organising model’ (Heery 1998; Carter 2006; Holbrook and Simms 2010, Gall 2009): again, however, there few connections are made to developments within the labour process (exceptions being Fairbrother 2000; Danford et al., 2002; Taylor and Bain 2001). Conversely, the larger group of writers interested in labour process theory maintains a focus largely unconcerned with organized responses of labour. The recent volume produced by the organizers of the International Labour Process Conference (Thompson and Smith 2010), for instance, contains no substantive treatment of trade unions and there is no single reference to them in the index. A defence of this latter position is possible since the practice of academic concerns has come some distance from classic accounts such as Working for Ford (Beynon 1973) and Living with Capitalism (Nichols and Beynon 1977) a movement that itself reflects the fact that so little of organized labour action centres on controlling what happens at work as opposed to how much is paid for it. Reviewing call centre trade unionism, for instance, Taylor and Bain stated that ‘New agendas need to include the range of issues and concerns which arise directly for the nature of the call centrelabour process and which systematically challenge management-defined frontiers of control (2001: 62). It is a judgement that could be generalized beyond call centres.

Public Sector and workplace control

The kind of work that people perform and the organizations in which it takes place influence the nature of trade unionism. The public sector has seen wide-ranging changes to the way it is organized in the last 30 years. Organisations have been fragmented with business units set up to reflect purchaser provider splits. New Public Management centralized control while devolving accountability for the achievement of economy, efficiency and effectiveness distilled in to arbitrary targets. With these changes work and workforces have been restructured through the over-riding demands of ‘modernisation’ and yet trade union responses have been ineffective. Periodic action over pay has occurred but there has been lack of union focus and concern with labour process issues. Public sector industrial relations have long been characterized as bureaucratic, centralised and remote from the workplace (Fairbrother 1994) but Taylor (1999) criticises public sector unions for effectively ‘legitimating the process of neo-liberal restructuring’ by remaining ‘ideologically committed to increasingly inefficient, ineffective and alienating public services’ (190). Clearly, whatever union defence was mounted, ideological or otherwise, public service provision was nevertheless restructured through privatizations, fragmentation and in the civil service the establishment of Agencies.

According to Fairbrother (1994; 2000) these very changes would provide the seeds for workplace-based union renewal. As managers took advantage of their new ability to make local decisions, workers would throw up local organization to resist them. While Fairbrother’s characterization of public sector unions as relatively remote and unresponsive organizations based on national bargaining was largely correct, his conviction that the devolving of decision-making would give impetus to a new participative union form was over optimistic and the evidence of actual renewal proved scant (Gall 1998; Carter 2004). The decentralization of accountability and centralized decision-making marginalized unions at national level and bypassed them locally by ignoring previously established workplace consultation processes. The bureaucratic procedures of Whitley that were once held to hold back the development of rank and file unionism (White: n.d.) were dismantled from above in a context of rising management power, further weakening the voice of local labour.

The rise and fall of partnership between HMRC and PCS

There is no one public sector labour process and workers’ experiences of changes in the form and content of work have not been uniform. Like many other sections of the Civil Service, however, staff at HMRC had been subject to an increasing pace of change from the 1980s as costs were cut and increased managerial control exerted pressure for increased productivity (Beale 2005: 140). No major conflict followed these changes for two reasons. Job losses were ameliorated through natural wastage, recruitment restrictions and voluntary redundancy lubricated by a relatively generous compensation scheme. Secondly, the union operated with policies that reflected de facto partnership working with the employer. Beale (2005: 143) notes that in the 1990s the union had ‘established joint union-employer implementation on a range of key new management practices, which promised to deliver substantial cost reductions, increased productivity, restructuring and reorganisation’. By 2000, encouraged by the New Labour Government, this approach had been formalized in a Modernisation Agreement. Nevertheless, there were tensions within the union, and between the union and employers, throughout the period. Beale details workplace resistance and the growing appeal of the left within the union opposed to partnership working. In addition, payment systems and levels and the lack of employee involvement were also obstacles to partnership. While the latter was easy to ignore, the union could take up the former without ever threatening the power they had ceded to management to alter the labour process.

The managerial impetus for labour process changes in HMRC was strengthened by the opportunities arising from the merger of HM Inland Revenue and HM Customs and Excise in 2005. The union, however, gave all appearance of continuing its orientation as if changes were of little concern, leading Fisher (2004) building upon Taylor’s (1999) arguments, to claim that there was a ‘crisis in civil service trade unionism’. Fisher’s focus is on the experience of PCS in civil service call centres, but the judgement is general: ‘There are arguably few workplaces where trade unions have less routine experience of contesting and redefining the frontiers of labour process intensification and control than those within the British civil service’ (2004: 158). Union focus was on pay and privatization rather than on concerns ‘immediately connected to changes to the detailed structure of administrative labour processes’ (158) and ‘union members within the Agency had little experience of negotiating and contesting those issues, such as control, skill and substitutability, which tend to accompany elemental changes to established labour processes’ (166). As a consequence the union displayed ‘too uncritical understanding of the significance and future potential for the degradation and devaluation of work presented by those new elemental forms of the white-collar labour process embodied in call centre work’ (159).

Fisher explained the union’s position through Hyman’s idea of a ‘productivity coalition’ between some managers and union officials. Cooperative relations could be maintained by ‘presenting the Agency as a department productive and innovative enough not to warrant further cuts or privatization, and worthy of being awarded new work by ministers’ (166). In addition to the job security that this strategy promised, it gave the union the space to argue for the need for motivated staff maintained by higher pay and promotion opportunities. The corollary of this stance was, according to Fisher, a civil service unionism that continued ‘to consist of typically inactive memberships led by national officials committed to compromise, rather than confrontation’ (165). The nature of the relationship between HMRC and senior national officials of PCS was, however, threatened by a number of connected developments. The implicit partnership between PCS and management inherent in the productivity coalition had material roots and benefits in the form of relatively high job security and the terms of voluntary severance and while it was the case that ICTs had increased the possibility of standardization and work measurement, these options had not been exercised. Some of these features were progressively eroded by the determination of the government to force through cost savings, through office closures, job losses, and increased productivity, changes making consensus much harder to achieve. In response to the changing relations at the workplace the union had also swung to the left symbolized by the election of Mark Serwotka on a platform of explicit opposition to partnership working in 2001, a swing consolidated in 2003 by victory of the broad left in the national executive committee elections. The end of partnership and the centralization of union resources and decision-making held out the possibility that the disjuncture between national officials and local activists could be addressed. Indeed this possibility has been fulfilled according to Upchurch et al. (2008) who claim that there is now a congruence of activists and the leadership of PCS. PCS is characterized as adopting the ‘organizing model’ of trade unionism with the suggestion that remobilizing its forces entails being less bureaucratic and more democratic, and adopting more aggressive tactics against recalcitrant employers.

From the above review of the literature on PCS and more specifically where available on the union within HMRC it is clear that it had a strong tradition of conservatism marked by a cooperative stance towards management that resembled a partnership approach. In return for relative security of employment it was willing to sanction initiatives to increase productivity and cut costs even where it lessened their members control over the labour process. The success of the left, explicitly opposed to partnership working is marked by more radical policies in the political sphere and a willingness to support industrial action over national unifying issues. What is less clear is whether support is forthcoming for more sectional disputes that focus on control of the work process. Elements of the older tradition of continuing to cede control at workplace level, and the disjuncture between national and local priorities, might result in the retention of public sector jobs the quality of which leaves the workforce disillusioned with both their employer and the union. This possibility is explored through the tensions that were between activists and members hostile to the introduction of Lean and willing to take action, on the one hand, and the structures of PCS that have frustrated its members’ feelings.

Research design

The research was conducted in 2008-9. Six HMRC sites were selected as those central to processing work and subject to new lean procedures (Cardiff , East Kilbride, Leicester, Lothians, Newcastle and Salford). Initial access to the research sites was facilitated by the PCS (Public and Commercial Services Union) and we began by interviewing branch representatives (across grades and functions) from each of the sites. This cross-section of staff primarily involved those working at the ‘frontline’ within processing, although a number of line managers were also interviewed. All of the 36 interviews, lasting between 1-3 hours, took place with either an individual or a small group of employees, were primarily based on-site and were recorded and then later fully transcribed. The interviews focused on key themes, providing HMRC representatives with the space to raise their own issues relating to their work experiences with lean. This paper focuses on experiences of the Lean industrial dispute. Additional interviews were conducted with three members of the PCS Group Executive Committee with a prime focus on the dispute.