Agency staff reforms introduced to help manage West Berkshire’s overspend

As has been well publicised, West Berkshire Council (along with most others) face severe financial pressures. At the bottom of this slippery slope is the ignominy of a Section 114 declaration, an admission of effective bankruptcy, into which several councils including Birmingham, Europe’s largest, have recently fallen. Others are teetering on the brink.

WBC doesn’t seem to be in any immediate danger but the situation is one that no council can regard with complacency. Rising costs, increasing demand for services and decreasing revenues are continuing to wreak havoc with municipal finances. All councils are looking for ways of saving costs without impacting on services, many of which are statutory. WBC, for instance, has introduced a Financial Review Panel (FRP) that meets every week to oversee all spending. This has, a recent press statement claimed, reduced the likely overspend in 2023-24 from £8.7m to £6.3m. The job is therefore started but is far from done.

One of the areas this has identified for savings and improvement is staff costs and, in particular, the number of agency staff which are far more expensive for the employer. The statement says that “since the inception of the FRP, there has been a 15% drop in the number of agency workers at the Council. WBC’s Human Resources team have also been working to move existing agency staff onto permanent contracts which will make savings on agency fees and other related costs.”

Some agency staff will always be required, particularly for very short-term and short-notice demands, but WBC appears to have a higher percentage of these than many other councils, something the new administration is seeking to address. This has also exposed other aspects of the employment practices which the Executive feels need fixing.

Although the Council has long had an official managed services provider to manage their recruitment of temporary workersthere are also a number of occasions where staff have for various reasons been recruited through other agencies outside of this managed service. Ensuring that all staff are sourced through one provider will, the statement explains, “provide better value for money, greater oversight of the use of agency workers and advantages with regards to agency workers moving into permanent roles.”

The situation is further complicated by the fact that some non-employed staff (generally in white-collar roles) have come not through an agency but by direct dealings with the respective officer. These are generally for longer periods than are for social-care staff and may be to plug a particular staffing gap for a number of months or to help execute a particular project.

Then there is the even greyer area of consultants. These would normally be expected to be working on a specific piece of work with clear terms of reference and a report or other deliverable at the end. The number of hours to be spent are usually not specified though the completion date generally will be. A good part of the work, and perhaps all of it, will not take place in the Council’s offices. If all or even any of these conditions are not met, it could be argued that they are not consultants at all but contractors and should thus be subject to the same over-arching standards and recruitment procedures as are all non-employed staff.

If the hotch-potch of arrangements such as this is allowed to spread, it’s possible – amongst other ills – to have a situation where three staff doing the same job are all paid different amounts, have different notice periods and have been subjected to three completely different level of checks. This therefore opens up another potential problem, that of risk management and reputational damage. One of the things that pushed Birmingham over the brink was the need to settle about £700m-worth of back-dated underpayment claims, something which more robust HR practices should have helped avoid.

On 20 September I spoke to Jeff Brooks, WBC’s Deputy Leader, who has spent 40 years in the recruitment industry . He said that the business of establishing exactly which of the council’s non-employed staff fitted into which of these four areas was “work in progress.” He added that the spending on agency staff had been £11.8m  in 2022-23 but was now running at an estimated £10.4m for 2023-24, the aim being to reduce that further. It seems that about 25% of the agency staff costs are through “non-official” agencies. The goal here is to move over to the Council’s chosen provider or, at the very least, ensure that these other agencies have identical processes, terms and standards in place.

Cost is obviously the main driving force behind these reforms. Were there not to be such a financial squeeze it’s likely that this matter wouldn’t have received the prominence it has. Jeff Brooks said that that there will other benefits as well. One will be to improve processes and ensure that the recruitment of all non-employed staff is done within a council-wide system which will ensure fairness and consistency and enable the Council to have a complete and accurate picture of its employment situation and worker population. Another, as mentioned above, is to reduce risk, either of the kind Birmingham  faced or possible accusations of incorrect residency status.

The need for agency staff  will not go away but WBC’s aim is to convert as many of these as possible to the status of employees. The above-mentioned statement says that since June, 15 such staff have become permanent employees, with 11 more due to sign contracts in September.

To do this, any organisation needs to be able to offer an attractive package regarding such things as pensions, days off and flexible working, as well as salaries: which leads to the final expected benefit. The better the deal, the more likely agency staff are to convert. This will also help recruit staff in other areas and, as importantly retain them. WBC’s current churn rate is nearly 18% a year, whereas a figure of between 12 and 15% is more typical. and one for which the administration is aiming.

Jeff Brooks stressed that these measures on their own won’t solve all of WBC’s financial challenges: indeed, some reforms such as ensuring that all agency staff are hired through the managed service may not show any savings at all. The wider hope is that, collectively, these will lead to a more efficient and stable employment system and help to protect the Council from risk. This should also help improve the quality of the services the Council provides – for that, let us not forget, is what it’s all about.

Brian Quinn




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