2500 backroom sackings saved no money at all

Posted By TEU on Mar 8, 2012 |

Tertiary institutions need to be wary of pressure to make cuts to administration and ‘back office’ staff says TEU national president Dr Sandra Grey, because the evidence of cost saving just does not stack up.

Dr Grey’s comments follow news this week that despite the government cutting more than 2500 state sector jobsover the last three years there has been a spending increase of $19 million.

Stuff reported that National have campaigned on cutting backroom services – like IT or human resources – to plough the money into the front line. Last year National pledged to squeeze $1billion out of the state sector over three years.

“A Treasury report scrutinising the cost, efficiency and effectiveness in administrative and support services was released today. It shows 31 agencies managed to prune just $20m over two years. Actual spending has risen by $19m but when adjusted for inflation showed a $20m reduction.

“Treasury itself only managed to save $338,000 between 2009 and 2011.”

Dr Grey says tertiary institutions are facing the same pressure as the rest of the state sector to sack staff in the name of economic efficiency.

“Sacking staff does not reduce work. The work still needs to be done, and if there are not enough staff then you end up bringing in contractors at a more expensive rate than the staff who previously did the job.  Let’s learn the lesson before it is too late: poorly thought out cuts do not save money.”

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