Cabinet Office Review of the Civil Service Welfare Bodies
11 December 2009
1. Many of you will be aware – not least from the discussion at this year’s AGM/Conference, which was attended by Dusty Amroliwala from the Cabinet Office – of the review which the Cabinet Office have been undertaking of all the Civil Service Welfare Bodies.
2. When we met in Coventry in August, the review was in a close to final form, but had not yet been discussed internally within the Cabinet Office or with Sir Gus O’Donnell. In the event, finalising the report took longer than I think Dusty had anticipated at our AGM.
3. The review report is now, however, in final form and the Cabinet Office have had a chance to consider it. An extract from the report detailing the recommendations relating to the Fellowship is enclosed. There are two headline messages for the Fellowship:
a) that over time, the Cabinet Office will expect to withdraw progressively the Grant-in Aid from all the Welfare Bodies currently funded. Their intention is to do this in a managed way which minimises disruption. But the overall message is clear: the Fellowship, in common with the other Civil Service Welfare bodies, must prepare for a future in which financial support from the Civil Service no longer exits.
b) on the back of the report, the Cabinet Office is clearly concerned about whether the Fellowship would be viable in its current form without the funding. With that in mind, the Cabinet Office have asked us to pursue the possibilities for closer working (including a full merger) with the Civil Service Benevolent Fund. The Cabinet Office has however, said that it is open to any other options the Fellowship may wish to propose for its future.
4. With that in mind, the Board has commissioned a small subgroup – the Internal Review Group – to explore all the various options for the future – including those involving the Civil Service Benevolent Fund. That Group is keen to have your ideas and views on the future, which I am now inviting you to submit via Fellowship Office.
5. In the meantime, the Board has agreed a budget for 2010, which is now under discussion with the Cabinet Office. This offers, as Cabinet Office had requested, a small (5%) reduction in the amount of Grant-in-Aid for 2010, but will protect in full the funding available to Branches and Groups, on the basis that the funding we provided to you is core activity. In addition, during this period of uncertainty about the long-term future of the Fellowship, the Board has agreed to suspend temporarily one or two activities which commit us to the longer term. This means we will not be pursuing any new national fundraising activity, and that we will be suspending temporarily the acceptance of Life Membership subscriptions, on the basis that to accept such applications would be potentially misleading when the longer term future is unclear. New subscriptions and donations will continue unaffected, and my expectation is that you will want to continue your local fundraising too.
6. I know this introduces an unwelcome element of uncertainty for the future of the Fellowship. But it is also an opportunity to look again at what people most value from the Fellowship, and how we can enhance and preserve that. I hope you will contribute positively to that process by letting the Review Group have your ideas. The Board for its part will make sure that you are kept fully informed as its thinking – and discussions with Cabinet Office and CSBF – progresses.
KATRINA WILLIAMS
Honorary National Chairman
EXTRACTS FROM THE REPORT OF THE CABINET OFFICE REVIEW OF THE CIVIL SERVICE WELFARE BODIES THAT RELATE TO THE FELLOWSHIP
SECTION 1: EXECUTIVE SUMMARY
Background
1.1 In early 2009 the Cabinet Office Civil Service Capability Group commissioned a review of three grant-in-aid funded Civil Service Welfare Bodies:
The Civil Service Benevolent Fund
The Civil Service Retirement Fellowship
The Civil Service Sports Council
1.2 In accordance with the terms of reference (Annex A), the review considered:
The ongoing case for funding each of the three Welfare Bodies
The level of funding, including options for filling a funding gap
Ways of funding the Welfare Bodies, and in particular the option of recharging the cost to Departments.
Ongoing case for funding
Recommendation 1 - Grant-in-aid funding for the Welfare Bodies should be continued at least in the medium term (to 2011).
1.3 There is a case for continuing to fund the Welfare Bodies to ensure that they can continue to offer the package of services around benevolent assistance, support for retired civil servants and for sports and leisure activities:
The services of the three bodies are valued by those who use them.
The services are an important part of the offering of the corporate Civil Service as an employer
Each of the bodies supports the Civil Service in “being a good employer”
Provision of similar welfare services for staff is not uncommon amongst medium and large private sector and public sector organisation.
No stakeholders suggested that the service offering should be discontinued in the short term.
1.4 However there is a trend away from paternalistic approaches to welfare services for employees as part of a flexible benefits package for staff. Some stakeholders questioned whether a different offering from the Welfare Bodies may be needed in the future, and how their image fits with the evolving civil service “brand”.
1.5 Questions were raised about the relevance of the services provided by the Retirement Fellowship in the longer term. Changing demographics, changing retirement patterns and a fall in the number of civil servants means that the Fellowship is highly vulnerable to falling membership and therefore falling income – this was described as a “burning platform”.
Level of funding
1.7 A significant reduction in the grant-in-aid to each of the Welfare Bodies would lead to a reduction in the services they offer and/or the Welfare Bodies would need to use their reserves to maintain the same level of service offering:
The Retirement Fellowship continues to be highly dependent on the
Cabinet Office grant-in-aid, which represents 42% of its annual income.
1.8 We concluded that new sources of income for each body would have to be found in order to create opportunities to reduce the level of grant-in-aid funding of desired.
Recommendation 3 – The Cabinet Office and the Departments should work with the three Welfare Bodies to develop a package of initiatives to enable the Welfare Bodies to improve awareness of their service offering as well as increase their membership and/or regular donations. This might include, for example, a standard information pack to be made available to all new entrants to the Civil Service, and increased direct access to civil servants in the workplace, through specific events, Department intranets, in-house magazines and promoting volunteering.
1.9 Each of the bodies has experienced a decline in membership or subscribers, and is taking steps to recruit and retain members. However all three expressed frustration at the difficulties they experience in working with departments to ensure civil servants are aware of the services offered by the bodies, and identified ways in which the Cabinet Office and/or Permanent Secretaries could help increase awareness, with an expected knock-on effect of increased income.
1.10 The benefits to the Cabinet Office and Departments would include greater awareness by civil servants of the wider employee benefits offered by the civil service as well as the potential for sharing any resulting increase in income through reduced grant-in-aid funding.
Recommendation 5 - The Retirement Fellowship and the Benevolent Fund should work together to develop a set of principles for a possible merger of the two bodies and to consider the potential benefits and costs, leading (if appropriate) to a detailed feasibility study, with support from the Cabinet Office in facilitating discussions and the development of proposals, and with the aim of completing a merger by the beginning of 2012.
1.12 With central office and administrative costs accounting for around half of the Retirement Fellowship expenditure, and membership declining, the viability of the Fellowship beyond a five year time horizon is questionable.
1.13 There may be benefits to the Fellowship in a merger with the Benevolent Fund to secure financial efficiencies and as a means to secure its long term viability. Any merger would need to meet a defined set of principle for both bodies, and the business case would need to be proven. Previous Cabinet Office Reviews have suggested that the two bodies consider a merger, but nothing has come of this. We therefore recommend that the Cabinet Office should facilitate discussions and the development of proposals, with a specific time limit.
Recommendation 6 - The grant-in-aid to the three Welfare Bodies over the three years 2009 to 2011 (plus an indicative level for 2012) should be as follows (assuming that the package of measures in Recommendations 3 and 5 are implemented):
1.14 We have estimated the additional income which could be generated by each of the Welfare Bodies if recommendations 3,4 and 5 are implemented, and recommend a reduction in grant-in-aid which shares these benefits between each Body and the Cabinet Office, so that all parties have an incentive to implement the recommendations and ensure they are successful.
Retirement Fellowship
1.19 The proposal to remove the funding for the Retirement Fellowship by 2012 assumes that a merger of the Retirement Fellowship with the Benevolent Fund by 2012 is feasible and will secure financial efficiencies. The out-going Chief Executive of the Benevolent Fund expressed the view that a merged organisation could operate with the grant-in-aid paid to the Benevolent Fund alone. We have therefore used this assumption in this proposal, but it would need to be tested through a feasibility study.
Recommendation 7 – We recommend that the Cabinet Office and the three Welfare Bodies should jointly review annually the effectiveness of Recommendations 3 and 4 in enabling the Welfare Bodies to increase income and to verify that the benefits are being secured, and to identify what further measures could be put in place to enable the Bodies to increase income. The first review should be in early 2010
1.20 The proposed revisions to the grant-in-aid are predicated upon the successful implementation of recommendations 3 and 4. We therefore recommend a joint Cabinet Office and Welfare Bodies review of the effectiveness of the recommendations in enabling the Welfare Bodies to increase income as estimated.
Recommendation 8 – We recommend that the Cabinet Office and the Welfare Bodies develop a longer term strategy for the Welfare Bodies to become self-sufficient financially, if this is felt to be desirable.
1.21 We are of the view that, over the longer term, it would be feasible for the Welfare Bodies to become self sufficient financially if this was felt to be desirable.
The Retirement Fellowship
1.24 The proposed strategy for the Retirement Fellowship would be to secure its long term future through a merger with the Benevolent Fund (subject to feasibility study).
Recommendation 9- If the Cabinet Office wishes to release some of its budget for other priorities through some form of recharge to Departments of the Welfare Bodies Funding, we recommend that the Cabinet Office pursues one of two options:
• Departments fund their own Departmental Sports Associations, grant-in-aid to the Sports Council reduced by the grant currently paid by CSSC to the DSAs, and the (reduced) grant-in-aid recharged to Departments on the basis of the number of permanent civil servants in each Department.
• As above but without the recharge to Departments.
Given that indications are that Permanent Secretaries will resist strongly any form of re-charging, the Cabinet Office will need to make a strong case. The options should also be tested with the Sports Council in terms of the consequences of the Sports Council Department Associations receiving funding directly from their own Department.
1.25 Given the pressure across the Civil Service on administration budgets, the Cabinet Office is obliged to look at every area of significant spend to assess whether current models and practices are sustainable and remain appropriate. The review team were therefore asked to consider a range of options for funding the Welfare Bodies, including specifically the option of the Cabinet Office re-charging Departments.
1.26 Four options were considered and tested against a set of criteria:
Simple and low cost to implement and administer
“User” pays – the users in this case being Departments
Funding to be a visible representation of the value the Civil Service places on the services of the Welfare Bodies.
Incentives for Departments to promote the services of the Welfare Bodies and take an holistic approach to Departments’ offerings to their employees.
1.27 We concluded that, if the Cabinet Office wishes to release some of its budget for other priorities through some form of recharge to Departments of the grant-in-aid paid to the Welfare Bodies, then one of the two options described in the recommendation should be pursued. Apart from transferring some or all of the costs to Departments, these two options have the added benefit of offering Departments scope for exercising choice over the extent of the funding of their Departmental Sports Associations and create incentives for Departments to take an holistic view of their various sports and leisure offerings and to be more demanding of their Departmental Sports Associations. However we have not tested these options with the Sports Council.
1.28 The report provides estimates of the financial implications for each Department.
Recommendation 10 – The Cabinet Office should continue to enter into written agreements with the three Welfare Bodies covering the three year funding commitment. The agreements should continue to link the payment of the grants-in-aid to the aims and objective of the organisations and should incorporate a commitment by the Cabinet Office to work with departments to enable the three welfare bodies to have improved, co-ordinated access to civil servants to increase awareness of their services.
Recommendation 11 – In order to allow the Cabinet Office to determine whether the grants are being applied for their proper purposes, the agreements should continue to require the organisations to provide to the Cabinet Office:
Their Business Plans
Their Annual Report and audited accounts
A signed declaration that the grants have been applied for their proper purposes
Together with the National Audit Office access to their books and records
Next review
1.30 In addition to Recommendation 7 above, the next major review of funding of the three Welfare Bodies should be carried out in time for it to be completed and its recommendations implemented before the payments for 2012 would normally become due. In practice this means the review should commence in early 2011.
2. When we met in Coventry in August, the review was in a close to final form, but had not yet been discussed internally within the Cabinet Office or with Sir Gus O’Donnell. In the event, finalising the report took longer than I think Dusty had anticipated at our AGM.
3. The review report is now, however, in final form and the Cabinet Office have had a chance to consider it. An extract from the report detailing the recommendations relating to the Fellowship is enclosed. There are two headline messages for the Fellowship:
a) that over time, the Cabinet Office will expect to withdraw progressively the Grant-in Aid from all the Welfare Bodies currently funded. Their intention is to do this in a managed way which minimises disruption. But the overall message is clear: the Fellowship, in common with the other Civil Service Welfare bodies, must prepare for a future in which financial support from the Civil Service no longer exits.
b) on the back of the report, the Cabinet Office is clearly concerned about whether the Fellowship would be viable in its current form without the funding. With that in mind, the Cabinet Office have asked us to pursue the possibilities for closer working (including a full merger) with the Civil Service Benevolent Fund. The Cabinet Office has however, said that it is open to any other options the Fellowship may wish to propose for its future.
4. With that in mind, the Board has commissioned a small subgroup – the Internal Review Group – to explore all the various options for the future – including those involving the Civil Service Benevolent Fund. That Group is keen to have your ideas and views on the future, which I am now inviting you to submit via Fellowship Office.
5. In the meantime, the Board has agreed a budget for 2010, which is now under discussion with the Cabinet Office. This offers, as Cabinet Office had requested, a small (5%) reduction in the amount of Grant-in-Aid for 2010, but will protect in full the funding available to Branches and Groups, on the basis that the funding we provided to you is core activity. In addition, during this period of uncertainty about the long-term future of the Fellowship, the Board has agreed to suspend temporarily one or two activities which commit us to the longer term. This means we will not be pursuing any new national fundraising activity, and that we will be suspending temporarily the acceptance of Life Membership subscriptions, on the basis that to accept such applications would be potentially misleading when the longer term future is unclear. New subscriptions and donations will continue unaffected, and my expectation is that you will want to continue your local fundraising too.
6. I know this introduces an unwelcome element of uncertainty for the future of the Fellowship. But it is also an opportunity to look again at what people most value from the Fellowship, and how we can enhance and preserve that. I hope you will contribute positively to that process by letting the Review Group have your ideas. The Board for its part will make sure that you are kept fully informed as its thinking – and discussions with Cabinet Office and CSBF – progresses.
KATRINA WILLIAMS
Honorary National Chairman
EXTRACTS FROM THE REPORT OF THE CABINET OFFICE REVIEW OF THE CIVIL SERVICE WELFARE BODIES THAT RELATE TO THE FELLOWSHIP
SECTION 1: EXECUTIVE SUMMARY
Background
1.1 In early 2009 the Cabinet Office Civil Service Capability Group commissioned a review of three grant-in-aid funded Civil Service Welfare Bodies:
The Civil Service Benevolent Fund
The Civil Service Retirement Fellowship
The Civil Service Sports Council
1.2 In accordance with the terms of reference (Annex A), the review considered:
The ongoing case for funding each of the three Welfare Bodies
The level of funding, including options for filling a funding gap
Ways of funding the Welfare Bodies, and in particular the option of recharging the cost to Departments.
Ongoing case for funding
Recommendation 1 - Grant-in-aid funding for the Welfare Bodies should be continued at least in the medium term (to 2011).
1.3 There is a case for continuing to fund the Welfare Bodies to ensure that they can continue to offer the package of services around benevolent assistance, support for retired civil servants and for sports and leisure activities:
The services of the three bodies are valued by those who use them.
The services are an important part of the offering of the corporate Civil Service as an employer
Each of the bodies supports the Civil Service in “being a good employer”
Provision of similar welfare services for staff is not uncommon amongst medium and large private sector and public sector organisation.
No stakeholders suggested that the service offering should be discontinued in the short term.
1.4 However there is a trend away from paternalistic approaches to welfare services for employees as part of a flexible benefits package for staff. Some stakeholders questioned whether a different offering from the Welfare Bodies may be needed in the future, and how their image fits with the evolving civil service “brand”.
1.5 Questions were raised about the relevance of the services provided by the Retirement Fellowship in the longer term. Changing demographics, changing retirement patterns and a fall in the number of civil servants means that the Fellowship is highly vulnerable to falling membership and therefore falling income – this was described as a “burning platform”.
Level of funding
1.7 A significant reduction in the grant-in-aid to each of the Welfare Bodies would lead to a reduction in the services they offer and/or the Welfare Bodies would need to use their reserves to maintain the same level of service offering:
The Retirement Fellowship continues to be highly dependent on the
Cabinet Office grant-in-aid, which represents 42% of its annual income.
1.8 We concluded that new sources of income for each body would have to be found in order to create opportunities to reduce the level of grant-in-aid funding of desired.
Recommendation 3 – The Cabinet Office and the Departments should work with the three Welfare Bodies to develop a package of initiatives to enable the Welfare Bodies to improve awareness of their service offering as well as increase their membership and/or regular donations. This might include, for example, a standard information pack to be made available to all new entrants to the Civil Service, and increased direct access to civil servants in the workplace, through specific events, Department intranets, in-house magazines and promoting volunteering.
1.9 Each of the bodies has experienced a decline in membership or subscribers, and is taking steps to recruit and retain members. However all three expressed frustration at the difficulties they experience in working with departments to ensure civil servants are aware of the services offered by the bodies, and identified ways in which the Cabinet Office and/or Permanent Secretaries could help increase awareness, with an expected knock-on effect of increased income.
1.10 The benefits to the Cabinet Office and Departments would include greater awareness by civil servants of the wider employee benefits offered by the civil service as well as the potential for sharing any resulting increase in income through reduced grant-in-aid funding.
Recommendation 5 - The Retirement Fellowship and the Benevolent Fund should work together to develop a set of principles for a possible merger of the two bodies and to consider the potential benefits and costs, leading (if appropriate) to a detailed feasibility study, with support from the Cabinet Office in facilitating discussions and the development of proposals, and with the aim of completing a merger by the beginning of 2012.
1.12 With central office and administrative costs accounting for around half of the Retirement Fellowship expenditure, and membership declining, the viability of the Fellowship beyond a five year time horizon is questionable.
1.13 There may be benefits to the Fellowship in a merger with the Benevolent Fund to secure financial efficiencies and as a means to secure its long term viability. Any merger would need to meet a defined set of principle for both bodies, and the business case would need to be proven. Previous Cabinet Office Reviews have suggested that the two bodies consider a merger, but nothing has come of this. We therefore recommend that the Cabinet Office should facilitate discussions and the development of proposals, with a specific time limit.
Recommendation 6 - The grant-in-aid to the three Welfare Bodies over the three years 2009 to 2011 (plus an indicative level for 2012) should be as follows (assuming that the package of measures in Recommendations 3 and 5 are implemented):
1.14 We have estimated the additional income which could be generated by each of the Welfare Bodies if recommendations 3,4 and 5 are implemented, and recommend a reduction in grant-in-aid which shares these benefits between each Body and the Cabinet Office, so that all parties have an incentive to implement the recommendations and ensure they are successful.
Retirement Fellowship
1.19 The proposal to remove the funding for the Retirement Fellowship by 2012 assumes that a merger of the Retirement Fellowship with the Benevolent Fund by 2012 is feasible and will secure financial efficiencies. The out-going Chief Executive of the Benevolent Fund expressed the view that a merged organisation could operate with the grant-in-aid paid to the Benevolent Fund alone. We have therefore used this assumption in this proposal, but it would need to be tested through a feasibility study.
Recommendation 7 – We recommend that the Cabinet Office and the three Welfare Bodies should jointly review annually the effectiveness of Recommendations 3 and 4 in enabling the Welfare Bodies to increase income and to verify that the benefits are being secured, and to identify what further measures could be put in place to enable the Bodies to increase income. The first review should be in early 2010
1.20 The proposed revisions to the grant-in-aid are predicated upon the successful implementation of recommendations 3 and 4. We therefore recommend a joint Cabinet Office and Welfare Bodies review of the effectiveness of the recommendations in enabling the Welfare Bodies to increase income as estimated.
Recommendation 8 – We recommend that the Cabinet Office and the Welfare Bodies develop a longer term strategy for the Welfare Bodies to become self-sufficient financially, if this is felt to be desirable.
1.21 We are of the view that, over the longer term, it would be feasible for the Welfare Bodies to become self sufficient financially if this was felt to be desirable.
The Retirement Fellowship
1.24 The proposed strategy for the Retirement Fellowship would be to secure its long term future through a merger with the Benevolent Fund (subject to feasibility study).
Recommendation 9- If the Cabinet Office wishes to release some of its budget for other priorities through some form of recharge to Departments of the Welfare Bodies Funding, we recommend that the Cabinet Office pursues one of two options:
• Departments fund their own Departmental Sports Associations, grant-in-aid to the Sports Council reduced by the grant currently paid by CSSC to the DSAs, and the (reduced) grant-in-aid recharged to Departments on the basis of the number of permanent civil servants in each Department.
• As above but without the recharge to Departments.
Given that indications are that Permanent Secretaries will resist strongly any form of re-charging, the Cabinet Office will need to make a strong case. The options should also be tested with the Sports Council in terms of the consequences of the Sports Council Department Associations receiving funding directly from their own Department.
1.25 Given the pressure across the Civil Service on administration budgets, the Cabinet Office is obliged to look at every area of significant spend to assess whether current models and practices are sustainable and remain appropriate. The review team were therefore asked to consider a range of options for funding the Welfare Bodies, including specifically the option of the Cabinet Office re-charging Departments.
1.26 Four options were considered and tested against a set of criteria:
Simple and low cost to implement and administer
“User” pays – the users in this case being Departments
Funding to be a visible representation of the value the Civil Service places on the services of the Welfare Bodies.
Incentives for Departments to promote the services of the Welfare Bodies and take an holistic approach to Departments’ offerings to their employees.
1.27 We concluded that, if the Cabinet Office wishes to release some of its budget for other priorities through some form of recharge to Departments of the grant-in-aid paid to the Welfare Bodies, then one of the two options described in the recommendation should be pursued. Apart from transferring some or all of the costs to Departments, these two options have the added benefit of offering Departments scope for exercising choice over the extent of the funding of their Departmental Sports Associations and create incentives for Departments to take an holistic view of their various sports and leisure offerings and to be more demanding of their Departmental Sports Associations. However we have not tested these options with the Sports Council.
1.28 The report provides estimates of the financial implications for each Department.
Recommendation 10 – The Cabinet Office should continue to enter into written agreements with the three Welfare Bodies covering the three year funding commitment. The agreements should continue to link the payment of the grants-in-aid to the aims and objective of the organisations and should incorporate a commitment by the Cabinet Office to work with departments to enable the three welfare bodies to have improved, co-ordinated access to civil servants to increase awareness of their services.
Recommendation 11 – In order to allow the Cabinet Office to determine whether the grants are being applied for their proper purposes, the agreements should continue to require the organisations to provide to the Cabinet Office:
Their Business Plans
Their Annual Report and audited accounts
A signed declaration that the grants have been applied for their proper purposes
Together with the National Audit Office access to their books and records
Next review
1.30 In addition to Recommendation 7 above, the next major review of funding of the three Welfare Bodies should be carried out in time for it to be completed and its recommendations implemented before the payments for 2012 would normally become due. In practice this means the review should commence in early 2011.
