Civil service employment faces change

Download article in original language : FR0407104FFR.DOC

In 2004, French civil servants are experiencing a pay freeze, while only half of those who retire are being replaced. The industrial relations climate is thus tense, against a background of future uncertainty and change. The civil service's share of public expenditure is being questioned, while a huge wave of retirements among civil servants is due over the next five to 10 years. At the same time, new management methods and performance-related pay systems are being introduced. This article reviews the situation in summer 2004.

The development of public spending has been subject to increasingly close scrutiny in France lately. The debate has taken a dramatic turn recently due to an official rebuke for the government from the European Union over the public spending deficit, a stringent audit from the French Court of Auditors (Cour des comptes) and widespread claims in the financial press that the government has lost control of the state budget. Although the main cause of the public deficit can arguably be attributed to a fall in income, the political debate has focused on expenditure, and civil service employment has come under scrutiny. The government announced two flagship policies in this area in autumn 2003 (FR0310103N): a civil service pay freeze for 2004 (after a very small increase in 2003); and the reiteration of an earlier decision not to replace 50% of civil servants who retire (FR0211106F). The first commitment looks certain to be honoured, but the second seems to have got off to a bad start.

Resistance to staffing cuts

According to commentators, announcements of civil service staffing cuts have taken on a ritual character, as have failures to carry them out, and this weakens their scope for effectiveness. In 2003, the announcement of a policy of not replacing one retiring employee out of two in practice meant only 4,500 positions being lost (ie the equivalent of not replacing around one retiree out of 12), which was a minor reduction compared with the public spending deficit. Application of the 'one out of two' rule in 2005 would have meant a workforce reduction of around 25,000 jobs, but on 27 June 2004, the junior minister for the budget, Dominique Bussereau, announced his intention to cut only 17,000 positions (ie one third of the number of retirements). A public debate between government ministers ensued, with some opposition to cutting employment levels in the armed forces and state education system. As these two ministries are the main employers in the central government civil service, the number of positions cut may well be fewer than the 17,000 announced.

The debate on the development of the civil service is not confined to spending considerations, however important they may be. The civil service is comprised of three branches; the central government civil service, with approximately 2 million employees (not including the armed forces); the local and regional government civil service, with 930,000 employees (not including 300,000-400,000 workers without full civil servant status); and the public hospitals, with a little under 900,000 workers (almost 100,000 of whom do not have full civil servant status).

Many important changes are imminent for the whole civil service workforce over the next few years. First, it is older than the average for the active population, with a higher proportion of over-50s. Prior to a pension reform in 2003 (FR0309103F), there were many retirements forecast, these being distributed unevenly across the branches, with the central government civil service hardest hit (a peak of retirements was expected in 2008), whereas the local and regional government and hospital civil service were to experience a smoother trend in the number of retirements as time progressed. Although the latter sector has a younger profile, many of its employees can retire at 55. In the central government civil service, the Ministry of Education accounts for just under half the total staff. It was expecting large-scale retirements around the 2008-10 period, as was the Finance Ministry, both of which have been recruiting more than the other ministries over the last 50 years (see La Fonction publique face au défi démographique[The civil service under demographic challenge], Observatoire de l’emploi public, April 2002), but the reform of the pension scheme may well alter the schedule for these expected retirements.

Effects of pension reform

The pension reform law adopted in August 2003 should slow down the expected wave of retirements by extending the length of service required for a full pension to 40 years, and creating a punitive deduction for early retirement. However, in June 2004, the government extended a provision of the 2003 reform allowing early retirement for people who had begun their working lives at a young age (FR0312102N) to the civil service. Previously, this provision had applied only to the private sector. Nevertheless, this provision will be applied to the civil service in a minimal way, mainly to keep costs down, and this has provoked hostility from all the civil servants' trade unions, even those that had agreed to the 2003 pension reform. The restrictions applied to the implementation of this new policy in the civil service should slow down the volume of retirement but are likely to leave present acute problems in recruiting replacements untouched. In 2002, 81,000 retirements were recorded in the three branches of the civil service, and this was just the beginning of a rising tide. In the central government civil service alone, 65,300 staff retired in 2003, a further 71,000 are forecast to go in 2004, and 84,000 will retire in 2009, almost 35,000 from the Ministry of Education. Over the next five years, the civil service ministry estimates that 300,000 new staff will have to be recruited across the three branches. Over the same period, the private sector will also experience some problems hiring young graduates. There will therefore be competition between private and public sectors to attract the best recruits, a race in which the civil service will not be starting as favourite.

Aware of what is at stake, the civil service minister, Renaud Dutreil opened France's first 'public sector jobs fair' on 1 June 2004 in Paris, at which various ministries, local and regional councils and hospitals presented the occupations in their branches and the relevant training channels . Such initiatives appear to be aimed at thwarting the effects of the dominant discourse within government on civil service employment. According to the minister himself, who says that he is 'isolated' within the government on this point, the current discourse of falling staff numbers is totally 'counter-productive'. In a recent opinion poll conducted by IPSOS for Le Monde and the Gazette des communes, 51% of young people questioned thought the civil service would be recruiting fewer people in the future, whereas according to the minister’s comments, it will actually be hiring more people than ever before, even taking into account the objective of cutting positions announced earlier. Prescriptions for short-term problems in this area run counter to medium-term necessities, according to observers. Tensions are also expected in other areas, for example between the necessity for recruiting high-quality staff and what is seen as the dominant discourse of downplaying the importance of public sector activity. The attractiveness of employment in the civil service will, it is argued, be determined by the degree of value placed on its work, with fears that a downgraded civil service will be widely seen as a last resort by those who fail to get work elsewhere.

Very gradual change

Elements of performance-related pay have already been introduced for some high-ranking civil servants at decision-making levels. It has now been announced that, at lower levels within the civil service and even at the lowest grades, some existing bonuses will henceforth be granted on the basis of collective performance. These performance-related pay measures, pioneered in the police force, have raised many problems and encountered the distrust of trade unions. A reform of state budgetary procedure currently going through parliament will introduce performance indicators related to the implementation of assignments and public action programmes. This new logic of evaluation is supposed to be a key element in new civil service management methods, and in the long term aims to enable each worker’s - or at least each unit’s - contribution to the effectiveness of the whole to be assessed more accurately.

Commentary

The changes in civil service employment outlined above have been greeted in a variety of ways by employees and trade unions. Although the need for change is acknowledged, the methods proposed have encountered a good deal of scepticism. In the short term, the decisions not to raise the pay of civil servants in 2004 and to make staffing cuts have created a tense atmosphere in a sector where the level of social dialogue has traditionally been poor.

The attitude of those at the top of the civil service hierarchy, the way indicators are decided upon and the means of evaluating results are all unresolved issues that point to many debates in the months ahead. The policy that has been in place for several years, referred to as 'budgetary regulation', is not the ideal framework for carrying out such changes. The changeover from one generation of civil servants to another, the issue of training, and the levels of pay and prestige accorded to the civil service, together with sluggish levels of spending and wide-ranging changes in management methods, will subject the French civil service to profound changes for several years to come. (Jean-Marie Pernot, IRES)