Employment advice and conciliation body deemed cost effective

The government recently announced extra funding and an enhanced role for the state-funded Advisory, Conciliation and Arbitration Service (Acas), enabling earlier and more flexible conciliation in individual workplace disputes and expanded advice services. This follows an independent study, published in November 2007, which found that activities of Acas have a positive and substantial impact on the UK economy, generating benefits worth almost GBP 800 million (€1.07 billion) a year.

In November 2007, the National Institute of Economic and Social Research (NIESR) published an independent evaluation (446Kb PDF) of the economic impact of the employment relations services provided by the Advisory, Conciliation and Arbitration Service (Acas). The report was commissioned by Acas, against the background of cuts to its budget and resulting job losses in the period since 2003–2004.

Role of Acas

Acas is an independent, state-funded body, whose council comprises leading figures from business and trade unions and other employment relations specialists. Its aim is ‘to improve organisations and working life through better employment relations’. The organisation provides a range of services, including employment relations advice, training, conciliation in individual and collective workplace disputes, mediation and arbitration.

Acas has approximately 730 staff based in 11 main regional centres throughout England, Scotland and Wales, with a head office in London.

Key findings of report

The report found that Acas has a positive and substantial impact on the UK economy, generating benefits worth almost GBP 800 million (about €1.07 billion as at 12 February 2008) a year. It estimates that the economy benefits by over GBP 16 (€21.47) for every GBP 1 (€1.34) spent by Acas.

The report analysed six key areas of Acas activity in the period 2005–2006 – the most recent year for which complete data were available. These six areas relate to:

• conciliation in individual workplace disputes that are the subject of actual or potential claims to employment tribunals, with a view to reaching a settlement before the case is heard by a tribunal – in this respect, Acas provided conciliation services covering some 141,000 individuals in the 2005–2006 period;

• conciliation in collective industrial disputes – Acas provided services in 952 disputes within the same period;

• the Acas helpline – in 2005–2006, the helpline handled 908,553 requests for advice from employers and employees;

• its website, publications, newsletters and other communications activities;

• workplace projects – 319 of which were conducted in 2005–2006;

• training – 791 open access events were held in 2005–2006, along with 1,676 organisation-specific events.

The report estimated that Acas’s efforts in resolving individual and collective disputes at work resulted in immediate savings to the economy of GBP 313 million (€419 million), while the advice and guidance provided to employers and employees contributed a further GBP 475 million (€637 million). Savings in management time, and reductions in the costs of recruitment and absence, were among the benefits for businesses arising from Acas’s activities. At the same time, employees benefited, in particular, from better employment prospects and avoiding losses in earnings. Taxpayers benefited from lower employment tribunal costs.

The report focused on the direct and immediate benefits of Acas intervention, rather than on the longer-term and wider economic advantages of an improved employment relations climate. Nevertheless, the report noted that, in addition to the short-term direct impact of its activities worth nearly GBP 800 million (€1.07 billion), Acas’s activities have contributed to a reduction in absenteeism and an increase in foreign direct investment, ‘both of which add hundreds of millions of pounds to national output’.

Reaction to findings

The Chair of Acas, Ed Sweeney, commented: ‘In business terms, this level of return is impressive and testament to the expertise and diverse services being delivered.’

The Minister of State for Employment Relations and Postal Affairs, Pat McFadden, highlighted that Acas has played a valuable role in helping to resolve disputes in the workplace with positive benefits to the economy. He added: ‘Employment disputes are stressful for employees and costly for business. It is in everyone’s interest to resolve problems quickly and without involving employment tribunals wherever possible.’

Additional resources earmarked for Acas

In February 2008, the government announced that Acas would receive up to GBP 37 million (€49.6 million) in extra resources over the coming three years, to enable Acas to pilot conciliation provision in the earlier stages of disputes and to fund an expanded and enhanced helpline and advice service. The expanded and modernised Acas advice service will be widely promoted and have more capacity to provide employment advice to employers and employees and their representatives than the current Acas helpline.

Acas’s role will also be enhanced by the Employment Bill (145Kb PDF), currently going through parliament (UK0712019I). The legislation will remove restrictions on the time periods during which Acas conciliation is available to the parties involved in employment tribunal cases, enabling Acas to conciliate at any time until a tribunal reaches its verdict.

Mark Hall, IRRU, University of Warwick