Agenda item

Report of the Director for Culture, Strategy and Engagement. To be introduced by the Cabinet Member for Finance and Corporate Services.

To award a contract for the ongoing provision of agency staff, as the existing contract is expiring.

The Cabinet Member for Finance and Corporate Services introduced the report. It was explained that the Council was committed to building a motivated, collaborative, and community-focused workforce. However, it was explained that there would be circumstances that necessitate the employment of agency workers, but stressed that this was not the Council’s preferred mode of employment. It was explained that the Council should employ agency workers where there was a strong business need, which would primarily be to help facilitate shorter-term or finite projects, and to address unavoidable skill shortages in order to maintain services to residents. 

It was explained that all directorates were working to ensure that there is a solid reason for every agency assignment and that no new workers were recruited without prior consideration of all alternative options. It was explained that the measures taken over the last year decreased the numbers and level of expenditure on agency workers and this effort would continue to be a strong focus for senior managers. 

It was explained that the contract represented the best value way to engage agency workers, and that it was important to note that there was no minimum spend and no penalties or increased costs if the Council did not spend up to the authorised contract value.

In response to comments and questions from Cllr Emery, the following information was shared:

• It was explained that the recruitment of all agency staff was resultant of difficulties to recruit permanently. Discussions had ben had with agency staff to encourage take up of permanent roles, but that this was not always taken up in key areas.
  
  
• Reduced spend of contract significantly, and that the service was working to drive these costs lower. While it was stressed that this may suffer from variation, it was stressed that work was being undertaken to reduce the number of agency staff and the costs resultant wherever possible.

RESOLVED:

That Cabinet:

1.     Approved the award of a contract for temporary agency provision and permanent agency recruitment support to Matrix on a neutral vendor basis, under Lot 1a – Neutral Vendor of ESPO’S Managed Services for Temporary Agency Resources Framework to appoint a single service provider under the MSTAR4 Framework.

2.     Approved the contract award for 2 years with the option to extend for 2 further periods each of 2 years up to a maximum term of 6 years. Cabinet is being requested to approve the contract spend for the first two-year period of this contract. A further report will be brought to Cabinet prior to the end of this initial period, to authorise the extension period and further contractual spend if required.

3.     Approved the contract spend of £88,636,000 to cover the initial 2-year contract period

          The estimated value is based on current spend and considering future market rates, insourcing and pay increases. As this contract is demand led, if agency demand reduces then the value of the contract then reduces. 

REASONS FOR DECISION

The Council’s current contract expires in July 2025; however, the current contract value will be exhausted earlier than that and there is no possibility of a further value extension. A procurement process in collaboration with the London Collaboration has been undertaken to ensure a new contract can be placed to continue to meet the Council’s current requirements.

The new contract will allow the Council to continue to make savings and offer the Council the best value over the period of the contract based on current agency worker usage. Working as part of the London Collaboration, the 2 year + contracts are the best value option available. The new contract will commence upon reaching the maximum value on the existing contract, or July 2025, whichever is the earlier.

The new contract will enable Haringey Works to continue to support residents into   work. This team is the “first line” supplier for vacancies and are given a short exclusive period in which to field candidates for any temporary roles before the roles go out to the wider supply chain. Any successful candidates supplied by the Council are processed by the neutral vendor as a referral from the Council and we do not pay a margin to the supplier, simply a small payroll fee.

As permanent roles come up within the Council, the increasing number of local workers in temporary roles will be in a better position to successfully apply for them as they will already work in a Council service and have knowledge of the organisation.

To date Haringey Works have engaged the following number of local residents into work with the Council:
2022/2023 - 100 job starts of which eight progressed to fixed term / permanent work    with the Council.
2023/2024 - 90 job starts of which twelve progressed to fixed term / permanent work    with the Council.

ALTERNATIVE OPTIONS CONSIDERED

Not to have any contract. This would mean the Council would not have a centralised corporate provision to engage agency workers.  Therefore each service will have to engage each worker on the open market. This would substantially increase costs and reduce corporate control and monitoring. This option was discounted on this basis.

Procure a different contract / supplier via the London Collaboration. This would result in unnecessary work, particularly during the SAP ERP review which is currently in progress and would be unwise to select a different provider until the outcome of the SAP review / options and appraisal. Currently Matrix has a data flow from SAP and our Learning Management System solution. Procuring a new provider would create considerable disruption to Council services incurring very considerable set up costs. There is no other neutral vendor option as part of the London Collaboration.  This option was discounted on this basis.

Carry out our own open tender process for a Neutral Vendor– We could not achieve the same value based on our own buying power as opposed to the buying power of the London Collaboration which we have been involved in detail.  The London Collaboration opportunity was completed based on a cumulative annual spend of 18 boroughs of £453,000,000. To procure Matrix via a direct award outside of the London Collaboration would cost 15.17% more than the recommended option. This option was discounted on this basis.

Carry out our own open tender process for a Master Vendor or procure a Master Vendor solution via the London Collaboration. The Council moved from a Master Vendor model in 2021.  Whilst our agency spend is higher based on usage based on the factors mentioned the Council has to date made £2,729,810 savings in comparison to the Master Vendor model which offers the service through the provision of agency workers from their own pool of temporary staff in the first instance. Only where this is not possible does the Master Vendor use their resources to source workers from alternative agencies on their framework of suppliers. This would reduce the options services have to select agency workers and reduce the option for Haringey Works to provide workers. A master vendor would be an additional 27.73% cost to the Council. This option was discounted on this basis.

Insource the current agency provision – this option is not viable as there would be a considerable cost implication in addition to not having the expertise, set up, or resources to do so. This option was discounted on this basis.