Issue - meetings

To consider the Council’s spend on consultants and agency workers.

The Committee was advised that this was the fourth iteration of the above report providing an update in respect of the historical spend position in relation to consultants and agency workers, refreshed to include the financial year end 2022/23.  The report was first presented in October 2020, with update reports subsequently circulated in 2021 and 2022 assessing the impact of the recommendations implemented from the first report.  Financial data reporting had improved in the meantime.  Over the last financial year (2022/23), the Council reported spend of a combined total of £12.2 million in respect of consultants and agency workers across revenue and capital budgets compared to £13 million in 2021/22.

The report, which focused on departmental spend rather than project costs and examined the reasons for engaging agency workers and consultants, explained that the Council operated a compliant procedure through a company named Comensura in order to recruit such staff which was necessary on occasions, particularly when recruitment attempts had been unsuccessful for a number of reasons.  Compliance via the Comensura route was currently 56%, however, not all employment and recruitment agencies wished to work with Comensura owing to the associated low profit margins.  This was the first version of the report to divide spend into the categories of revenue and capital costs and it indicated decreasing spend in relation to revenue expenditure whilst capital spend was linked to capital projects monitored by the Finance team.

During the ensuing discussion a number of questions were asked and clarifications offered as follows:

·                In addition to consultants providing specialist services, agency workers were required to fill recruitment gaps and further information detailing these gaps would be gathered as part of the Financial Recovery Plan work and provided later in the year.  In this connection, attention was drawn to Table 2 in the report which provided some commentary and explanation in respect of the Housing Revenue Account service delivery model including some detail surrounding recruitment gaps.  Also, Comensura provided the Council with management data giving reasons for onboarding agency staff which could possibly be circulated.  Councillors were assured that they were at liberty to pose detailed questions to officers and Lead Councillors. 

·                It was emphasised that there was a need for consultants offering particular expertise which the Council did not have a long term need to retain in house.  This need also applied to obtaining agency workers to staff services such as waste collections in accordance with the associated business model to avoid over staffing to cover absences.

·                The importance of improving the capability and maturity of financial aspects of the Council to facilitate the Finance section’s business partnering with each of the other services to improve financial controls relating to staffing was highlighted.

·                In terms of capitalising the cost of spend in relation to consultants supporting capital projects, the Committee was advised that there was a requirement for the Council to comply with CIPFA’s Prudential Code for Capital Finance in Local Authorities.  This Code prevented the capitalising of spend in situations where  ...  view the full minutes text for item 12

The Lead Councillor for Resources introduced the report submitted to the Committee.  He advised the meeting that total spend on agency and consultants in 2021-22 was almost unchanged from 2020-21, the spend on consultants had fallen by sixteen percent in the same period.  He indicated that the net cost to the Council had reduced by almost £10 million to approximately £5 million.  The Lead Councillor for Resources noted that the Council’s preferred supplier for agency workers accounted for fifty-two per cent of agency spend in 2021-22, up from twenty-four percent in the previous year.

The Interim Senior Specialist Procurement outlined to the Committee the progress in controlling consultant and agency spend, improvements in the governance process, and the work of the Corporate Procurement Board. 

During the ensuing discussion a number of questions were raised and responded to:

·        In response to a question about the forecast spend for 2022-23, the Lead Councillor for Resources advised the Committee of £700k budgeted for agency staff, referred to capital spending of £99 million approved by full Council in February 2022, and advised that that there would be an increase in staff in the Council’s procurement service.  The Lead Councillor for Resources advised that the details of the consultancy spend on projects were set out in the business case reports submitted to the Executive or full Council.  The Director for Resources confirmed that forecast spend was normally included in budget reports.

·        A member of the Committee noted that the £2.1 million reduction in revenue spending in 2021-22 compared to 2020-21 was impressive.  The same member of the Committee suggested that the report submitted to the Committee might in future be considered annually by the Corporate Governance and Standards Committee rather than the Overview and Scrutiny Committee.  The Chairman indicated that the suggestion was best discussed outside the meeting.

·        The Lead Councillor for Resources indicated that the governance changes targeted improvements in procurement and contractual arrangements for consultancy and agency spending.  He stated that the Council were recruiting permanent staff whenever possible, rather than using agency staff.

·        The Lead Councillor for Resources praised the detail provided within the report submitted to the Committee.  In response to a request from a Committee member for more information to be provided within a future version of the report, the Director of Resources outlined the governance structure for reporting and monitoring the budget for each project and questioned the appropriateness of adding such major project details to reports considered in public.  The Director for Resources indicated that details of major projects would be shared with any Councillor requesting them.  A member of the Committee suggested that the inclusion of additional information in future versions of the report would lead to duplication of work undertaken elsewhere in the Council.

·        A member of the Committee asked what the target was for agency spend with the Council’s preferred supplier and was advised by the Interim Senior Specialist Procurement that 100 per cent was unrealistic as certain skillsets were unable to be delivered through  ...  view the full minutes text for item 7

The Lead Councillor for Resources introduced the report submitted to the Committee.  He drew attention to the off contract spend on agency staff, the reduction in expenditure on consultants (excluding consultancy spend on corporate projects), and the definition of consultancy expenditure used within the Council and the report. 

The Director of Resources indicated that the report submitted to the Committee provided an update on matters considered by the Committee in October 2020.  She confirmed the implementation of more robust governance arrangements for projects and programmes and tighter procurement rules.  The Committee was advised of difficulties recruiting staff and a reliance on agency staff to fill posts. 

The Director of Resources advised that the reported increased figures on expenditure for consultants were due to a number of capital projects entering the implementation stage and miscoding of construction costs and professional fees.  She suggested improvements to future reports to the Committee could include a tighter definition of consultancy costs and separate reporting of major project costs. 

In reply to a question about the public’s likely perception of the Council’s spending on capital projects and its reduced spending on Council services, the Lead Councillor for Resources referred to the need to balance the revenue budget and the Council’s ability to fund capital projects by borrowing or through grants. 

A member of the Committee asked about the increase in revenue spending on agency staff and the Director of Resources advised of difficulties recruiting permanent staff.

A member queried the Council’s shortage of planning services staff.  In response, the Director of Service Delivery advised that additional agency staff had been recruited to improve the situation.  He confirmed that such issues were common in local authorities due to an increase in planning applications. 

In reply to a question about the value for money of the Corporate Temporary Staffing contract with Comensura, the Director for Resources advised that Comensura had been commissioned following a procurement process that included a benchmarking of agency fees. 

A member of the Committee proposed that future reporting of the Council’s spend on consultants should include the outcomes expected and those actually delivered.  The Director of Resources suggested that the purpose of the report to the Committee might be to identify the use of consultancy and agency staff for roles where permanent Council staff should be used.

Members discussed a leaflet produced by a political party and distributed within the Borough which highlighted the increased total spend on consultants by the Council.  Members of the Committee and the Lead Councillor for Resources discussed the merit in the Committee noting any misrepresentations in such a publication.  At the request of the Chair, to avoid a perceived conflict of interest the Vice-Chair chaired the conclusion of the Committee’s discussion about the claims within the leaflet concerning Council spending.  During this discussion, the Director of Resources drew attention to section 3.2 of the report submitted to the Committee and the headline increases in agency workers spend and consultants spend compared to the previous year.  ...  view the full minutes text for item 23