Review of non-permanent staff arrangements
- Meeting of Budget and Finance Overview and Scrutiny Committee, Monday 2 December 2013 7.00 pm (Item 5.)
This review paper covers all non-permanent staffing arrangements entered into by the council, including temporary workers supplied by an agency, whether under the Reed contract or outside of it; and independent interims and consultants which the Council contracts with directly.
Cara Davani (Operational Director, Human Resources) introduced the report and advised that there were three types of non-permanent staff employed by the council, these being agency staff, consultants and interim managers. Although agency staff constituted the largest number of non-permanent staff, they were not the largest spend. Amongst the non-permanent staff, there were a small number of casual workers, none of which were employed on a zero hours contract and they were free to accept or refuse any offer of work. These casual staff were paid through the council’s payroll and they may also work for other organisations. Cara Davani drew members’ attention to table one in the report and confirmed that the largest spend on non-permanent staff from the Reed Managed Services was in Children and Young People. This was due to the costs involved in employing social workers, care assessors and a number of staff working in the John Billam Resource Centre. It was hoped that the number of agency staff working in Children and Families would fall in future. The committee heard that the main agency staff recruited in Regeneration and Growth were benefits assessors. Cara Davani then invited questions from members.
Members sought clarification that all staff were subject to the London Living Wage (LLW) and were agency staff more expensive to employ than permanent staff. It was queried what steps were being taken to retain social workers and had there been any case study undertaken as to what constituted a safe number of cases for social workers to handle. It was commented that it was not just the number of cases a social worker may have that could influence the ability to recruit and retain them, but also the cultural environment and the managerial practice of which they worked in. A member noted the downward trend in agency spend 2010-2013 as set out in table two in the report and asked how workloads were being managed in the context of this. The committee asked for further details regarding consultant costs for the large spend posts and another member enquired why there had needed to be a spend of £58K for a single consultant spend in Legal and Procurement. A member noted the relatively high costs in Human Resources (HR) for interims and consultants and another member felt that these costs were excessive in view that these were short term appointments. It was queried how the staff were selected for the interim and consultant positions in HR and was there any scope for shared services in relation to interim positions.
Members asked what processes had been undertaken to appoint Reed Managed Services as the agency worker provider and how long had they worked with the council. Reasons were sought as to why the number of consultants used had only reduced significantly in the last two years and were HR able to recruit permanent staff more quickly now. The question was posed as to whether the need for external staff was due to lack of capacity in some areas. In addition, did their appointment bring extra costs as they accumulated more employment rights the longer they remained, such as national insurance and pension costs and the total cost for all permanent staff. The committee also asked if Reed Managed Services helped the council to appoint permanent staff and what was the council’s position in re-appointing staff as consultants who had been made redundant.
In reply to the issues raised, Cara Davani confirmed that all staff employed directly by the council were subject to LLW, however this was not the case for contractors, although they were encouraged to apply LLW for their staff. She advised that when all factors were taken into account, there was not a large difference in terms of costs between employing permanent staff and agency staff to fill the same post. However, it was the council’s policy to reduce the number of agency staff and as a responsible employer, it was desirable to increase the proportion of permanent staff. Cara Davani added that realistically there would always be a need for some agency staff, particularly in areas such as social work. In order to attract and retain social workers, although a market supplement was offered, there were also other factors to make the employment offer more attractive, such as training and research had shown that such factors were just as important as salary. In addition, London Councils has asked that there not be excessive pay rises for social workers to prevent a 'bidding war’ between London boroughs. Those with no London experience were also encouraged to apply as they may be attracted by the challenges of being a social worker in Brent. Cara Davani advised that the comparatively large number of interims and consultants in Children and Families can also affect confidence in the department and efforts were being made to recruit permanently in such posts. Social worker caseloads in Brent were also not as high as was generally perceived and Cara Davani agreed to see if there were any case studies she could circulate to members concerning safe number of cases and what constituted a ‘case.’
Cara Davani referred to table two in the report that demonstrated that the overall agency spend had fallen year on year between 2010-2013, although there had been a small rise in the last year due to LLW increasing the average hourly rate. With regard to some of the larger spends concerning interims and consultants, Cara Davani advised that the information in table three of the report provided estimated costs, as some managers had been recruiting staff directly and so it had been more difficult to capture all information on this. However, agency spend was comparatively low in relation to London boroughs overall, as outlined in section 3.16 of the report. She explained that the spend for one post in Legal and Procurement for interims and consultants was related to a specific short term piece of work concerning the procurement of the Public Real contract, and the number of posts in Finance related to the move to the Civic Centre and IT costs for new finance systems. Cara Davani advised that three of the interim and consultant posts in HR were leaving shortly and had been appointed to help with the council restructure. Members noted that a permanent appointment had now been made in respect of Head of Learning and Development, whilst the interim HR Contract Manager was leaving the council in the second week of December 2013. Cara Davani advised that one of the HR posts had been appointed prior to her arrival at the council, whilst the other three posts had been appointed through a tender process.
Cara Davani advised that non-permanent staff daily rates of pay were always higher than the same post with permanent staff, however non-permanent staff would not be paid where they had not worked that day and did not receive any holiday or sick pay. A number of initiatives were underway for tightening the recruitment of non-permanent staff and managers were responsible for the recruitment of interims and contractors and must demonstrate value for money in the business case for extending an existing assignment which needed to be signed off by the Service Director, the Operational Director of HR and Finance. The HR Contracts Manager would then ensure value for money is obtained when negotiating the contract for all non-permanent staff and this role was crucial. It also included ensuring that the relevant employment and Disclosure Barring Service (DBS) checks had been undertaken. Cara Davani advised that there was limited scope for shared services in respect of interims as their role were usually very specific, however the council did discuss with other London boroughs about the suitability of potential candidates and would duly take into consideration those with a proven track record and who came with any recommendations from other authorities.
Cara Davani advised that Reed Managed Services had been awarded the neutral vendor contract in August 2013 and they were the sole organisation responsible for recruitment of agency staff. She stated that it was unclear as to why there had been such a large number of contractors two years previously, however all senior manager were now signed up to the policy of significantly reducing the number of consultants. She advised that some posts, particularly in Children and Families, statutorily needed to be filled and so this would sometimes require a non-permanent posting whilst a permanent appointment was sought. There also needed to be a Head of Learning and Development and this was why the post had been filled on an interim basis. In order to avoid rising costs for agency staff, these were generally appointed for a period of no longer than twelve weeks, whilst it was part of the contract with Reed Managed Services to assist in finding permanent staff. Cara Davani advised that there were specific rules with regard to re-appointing staff who had been made redundant on a consultancy basis, including a minimum period of twelve months between them being made redundant and returning to work for the council.
Mildred Phillips (Head of Transactional Services, Human Resources) added that Reed Managed Services offered favourable rates in comparison with the previous agency staff provider, whilst it was also felt that Reed Managed Services would be more robust in providing employment checks. Members heard that the council had seen how Reed Managed Services worked with LB Lewisham before deciding to award them the neutral vendor contract.
Mick Bowden agreed to provide information on the total permanent staff spend.