Council looks to cut costs on agency staff after spending almost £40m in five years

Over the last five years, Peterborough City Council (PCC) has spent almost £40m on agency staff, it has revealed.

A PCC report shows that it spent £37.4m on agency staff's services between 2018 and 2022.

The annual spend dipped during the pandemic (2020-22), it shows, but this rose to pre-Covid levels in 2022/23 with an £8.2m spend.

Agency staff are contracted by the council when it doesn’t have enough of its own staff available or when it needs to utilise specialists from outside its own workforce.

Typically, the area in which PCC – like other councils – needs the most extra staff is in the social care sector, which currently has more than 20 vacancies.

PCC is considering changing how it contracts agency workers in an effort to save money – which comes in part from external funding but also from the council itself.

Under the current contract, due to expire at the end of the month, OPUS People Solutions supplies all agency workers.

This would continue when it comes to the social care sector under the new proposals, while agency staff for all other sectors could be hired through multiple other organisations in future.

The new social care contract with OPUS, lasting three years, would cost £4m per year, PCC’s report says, and would also allow the company to itself contract staff from other agencies when needed.

The second, broader contract for all other sectors would last four years, it continues, and cost £3m per year, bringing the total spend below the £11.6m it spent in 2018/19 and £8m+ in subsequent years (outside the pandemic).

There would be an exception, however, for staff contracted to work at Clare Lodge, the UK’s only all-female secure children’s home based in Glinton.

A new solution will be sought for this home, council documents say, which is on an improvement journey; having been rated ‘Inadequate’ by Ofsted in September 2022, it achieved a ‘Good’ rating in July 2023.

This could involve hiring agency staff through Crown Commercial Service, which is run by the Government, the council report says.

A decision on this will be made at a later stage, however, while the other agency contract arrangements are expected to be agreed to at a PCC meeting on 18th September.

The companies from which agency staff could be procured outside social work are: Eden Brown, Tile Hill, Capita, Morgan Hunt, Hays, Reed, Sellick Partnership, Penna PLC, Liquid, Blue Arrow and OPUS.

The new contract arrangements will offer the council greater flexibility, PCC says, and cut costs such as management fees.

"The main driver for the move away from Opus to a framework approach to temporary recruitment is to strip away the intermediary cost and contract directly with providers at more competitive rates,” the report says.

"The separation between social care and other corporate recruitment also ensures an appropriate and flexible pipeline of relevant skills to maintain service delivery in key front-line roles where a contingent workforce is an integral part of the operating model.

“The move to a more direct relationship with the market also ensures greater flexibility and access to specialist skills that is inhibited in the current arrangement.”

The arrangement could come into play as soon as October.