Council Spending Spree On Agency Staff And Consultants Linked To Penny Wise And Pound Foolish Government Cuts With More Cuts To Come
IFS estimates that “under Autumn Statement plans Conservatives could be cutting unprotected budgets by 26% after 2015-16, or an extraordinary 41% over the whole period from 2010” says GMB.
GMB, the union for public sector workers, commented on a press report based on FOI data about Councils re-hiring people they made redundant and spending on agency staff. See notes to editors for copy of story in the Times on 14th Jan 2015 with the local FOI data the story is based on attached as a pdf.
Brian Strutton, GMB National Secretary for public services, said "GMB members in local authorities echo the concern at the level of council spending on agency workers. GMB has monitored this for many years and we have tried to rein it in.
The reasons councils end up employing agency staff are well known. Councils made too many people redundant in the first place and then found they could not operate their services without taking those people back on. In addition because council pay is so low many staff have left their permanent jobs to become agency workers and double their earnings.
One of the major reasons has been the constant change and reorganisation as councils struggle to cope with government imposed austerity. This has led to a managerial merry-go-round for consultants brought in to bolster existing managers, often on six-figure salaries.
It all stems from a combination of a lack of strategic workforce planning and panic reactions to budget cuts. Councils are in a mess.
This is another example of where the Government has been penny wise and pound foolish.
This is not sensible nor is it an isolated case of where setting out to save money actually costs more in the end. It is why George Osborne will borrow more money in five years than Labour Chancellors did in the previous 13 years.
The Institute of Fiscal Studies said on 13th Jan that “ Under Autumn Statement plans Conservatives could be cutting unprotected budgets by 26% after 2015-16, or an extraordinary 41% over the whole period from 2010”. Cuts in expenditure of this order for law enforcement, armed forces, social and community services and public sector pay are not remotely realistic.
That is the harsh reality of the choice to be made at the next election.”
Contact: Brian Strutton, GMB National Secretary for Public Services on 07860 606137 or Cath Speight GMB National Political Officer 07506 711925 or Kamaljeet Jandu, GMB National Equality and Diversity Officer on 07956 237178 or Martin Smith, GMB National Organiser on 07974 251722 or GMB Press Office 07921 28988.
Notes to editors:
Copy of story in Times on 14th January 2015.
Axed staff rehired by councils in £5bn spending spree
Birmingham city council has spent £155 million on agency staff since 2010-11 Rui Vieira/PA
Jill Sherman Alice Udale-Smith, Times Data Team
Last updated at 12:01AM, January 14 2015
Local councils are rehiring staff they have recently made redundant in a “scandalous” £5 billion spending spree on agency and consultancy workers, an investigation by The Times has revealed.
Dozens of authorities have splashed out more than £50 million with five spending above £100 million since 2010-11. Much of the money has been used on agency social workers but an increasing amount is now going on interim managers and consultants, who can earn up to £1,000 a day.
Many of these workers are returning to the councils they originally left after receiving big redundancy packages in a “lucrative” revolving door.
Despite demands by Eric Pickles, the communities secretary, and Francis Maude, the cabinet office minister, that agency staff should be cut, most councils have steadily increased their spending on temporary workers and consultants since the coalition came to power. The peak was in 2013-14 when more than £1.2 billion was spent.
“This [£5 billion] is a scandalous figure and one that needs to be justified,” said Jonathan Isaby, chief executive of the Taxpayers Alliance. “There have been all sorts of promises about bringing the cost of administering Whitehall down. Taxpayers will be particularly concerned at the number of former employees re-employed on more expensive contracts. The lucrative revolving door needs to rapidly come to a halt.”
Louise Tibbert, president of the Public Sector People Management Association and head of HR at Hertfordshire county council, said that social workers often went back to councils where they had worked before, but this was also the case for higher-paid staff.
“Many go to the private sector for better pay in legal, finance and HR or general management roles. There is a big chance that local government will pay the same for them to come back as consultants,” she said.
A freedom of information request showed that the worst offenders on agency expenditure include the biggest councils, the counties and London boroughs. Birmingham city council was top, spending £155 million since 2010-11, followed by Essex county council on £133.5 million and Kent county council with £127 million. Seventeen London boroughs also spent between £50 million and £125 million on agency and consultancy staff.
Over the past five years councils have had their budgets cut by more than £20 billion and lost more than 400,000 jobs as they found themselves on the front line of the chancellor’s austerity programme. Some have had their central funding cut by almost 40 per cent since 2010 and have had to close or reduce a range of services including road maintenance, libraries, street cleaning and home care for the elderly.
Tony Travers, local government expert at the London School of Economics, said that too many jobs were cut too quickly in the search for early big savings and councils had found that they could not provide their services.
Reluctance to take on permanent staff because of big overheads such as pensions meant that they used agency staff who would be cheaper to get rid of with more cuts inevitable.
Mr Pickles has already warned councils about the use of agency staff, and called on them to make the costs more transparent by insisting that all spending of more than £500 be published.
“Every bit of the public sector needs to do its bit to pay off the deficit left by the last administration, including local government,” Mr Pickles said. “We have cut departmental spend on consultancy to just £0.5 million a year. Every council should be doing the same so they can deliver sensible savings while protecting frontline services for taxpayers.”
The Local Government Association defended the figures, citing the huge cut in permanent staff across the country. “For time-limited projects like regeneration schemes or money-saving schemes to transform services it can often prove better value for local taxpayers to bring in short-term support than hiring permanent staff,” a spokesman said.
John Philpott, an economist, said that the problem had been fuelled because jobseekers feared the insecurity of taking a permanent role in the public sector. “People prefer to be private consultants so that they can change jobs more easily,” he said. “Part of the rise in self-employment is due to this phenomenon. Senior people in local government are self-employed and give advice in areas they previously worked in. A lot of these people were previously in senior roles who took early redundancy and are going back to advise but not full time.
Full Table Of Figures