News update – Public sector funds flex with holiday

Rushcliffe Borough Council is to launch a flexible benefits scheme through which employees must sell holiday in order to purchase benefits.

Instead of being given a set amount to spend on perks, staff will be able to sell up to 22 hours or three days worth of holiday a year to generate an allowance to spend on the scheme. But they will not receive a cash alternative if they do not use the allowance to purchase flex options.

Public sector organisations often find it difficult to implement a flex scheme, due to cash constraints, and Rushcliffe is one of the first to do so. Tom Grainger, head of HR, said: "That was a consideration when we first began to think about this."

He added that including tax-efficient benefits options in the scheme had helped to offset some of the cost through national insurance savings. The demise of the home computing initiative, however, had an adverse effect. "The cost of the scheme will have gone up because of that," said Grainger.

The council previously didn’t offer a formalised benefits scheme. Instead, staff were offered disparate options such as access to discounted medical insurance, a sports and social club, and between 25 and 28 days holiday a year."

By putting it all together in a package, not only did it bring it to employees’ attention, but there were benefits for the organisation too," said Grainger.

The new scheme, which is the first to be launched by Prudential’s flexible benefits business, will include options such as income protection, dental care, and retail vouchers.

Employees will select their benefits in June, before they come into effect in July.

Martyn Phillips, head of flexible benefits at Prudential, said: "The public sector is going to be the next growth industry for flex. The key in the public sector is the cost of implementation. That makes the business case from a financial perspective more of a challenge."