Contract staff ‘costing UK £1.5bn’

14 June 2006

Local authorities were attacked for wasting taxpayers’ money on agency and contract staff this week, as a trade union claimed the total fees bill was now nearing £1.5bn a year. The GMB released the results of a survey showing that 343 councils across the UK spent a total of £1,090M in 2005/06.
Birmingham topped the league of high spenders with an outlay of almost £52M, followed by two London boroughs. The capital accounted for more than £425M of the total. The survey questions were put to all authorities in England, Wales, Scotland and Northern Ireland under the Freedom of Information Act. Given that 10 refused to answer, and a further 78 had not replied – including large councils such as Belfast, Cardiff, Manchester, Liverpool and Nottingham – the GMB estimated the UK total was nearer £1.5bn.
Such spending ‘represents very poor value for money for the public’ as employment agencies pocketed a large slice. Temporary staff often needed a lot of induction training and were less productive than permanent staff, it added.
‘This is tantamount to back-door privatisation,’ said GMB national officer, Brian Strutton. Union members were ‘rightly appalled at the waste of public money,’ he added, blaming managers’ failure to appoint sufficient permanent staff to cover public services. The union claimed that a joint initiative with Newham to reduce spending on non-permanent staff, had improved council services and working conditions and saved money.
Some local authorities have defended their reliance on agency staff as essential, due to sharp variations in workload and time-limited funding.
In London, boroughs also face acute skills shortages – especially in highways and transport.
The Association of London Government is setting up a ‘virtual agency’ – of approved recruitment partners – to drive down commission fees, which can increase salary cost by 10-30% (Surveyor, 16 March).
Last year, an investigation by this magazine showed that spending on agency staff working in transport and highways had risen, despite previous efforts to reduce these costs (Surveyor, 18 August 2005).
The ballooning bill was driving some authorities to contract out the bulk of their design services, or restructure in other ways to reduce staffing.

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Contract staff ‘costing UK £1.5bn’

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