Earlier this week I attended the Performance & Contract Management meeting at which I asked a number of questions about the procurement failure of the Enablement Homecare Contract. As is often the case, no criticism of Capita was allowed and even when Cllr Finn agreed with one of my points, he was stopped in his tracks by Cllr Zinkin who is the Praetorian Guard of the Capita contract. The debate then moved to the topic of Interim and Agency spend which has seen a decline from the high point of last finance year. It is nevertheless still very significant and, as Cllr Edwards pointed out, how is that agency spend going to be affected once Brexit happens?
To set this in context the chart below illustrates the huge growth in Interim and Agency staff spend over the last 5 years.
It was always envisaged that the Interim and Agency staff spend would decrease after the two large outsourcing contracts were signed whereas in reality it has continued to grow year on year to the point where it has become a massive embarrassment for the council. Steps have been taken to try and reduce this spend and my latest forecast for the year end spend look like the outturn will be around £16.5 million down on the £19.88 million of last year but still double what it was in 2011/12 and we still have 8 months of the financial year to run.
I would also note that the Interim and Agency spend has a nasty sting attached. At the year end 2016/17 the council stated that the agency spend was in fact £21.194 million a difference of £1.3 million over the spend shown in monthly payments. This did puzzle me until I carried out my inspection of the accounts when it became clear that Capita were paid £1.3 million in Gainshare payments for "savings" made on the interim and agency contract with Comensura. I have still not been shown the evidence to support the claims of these savings but Barnet is quite happy to pay Capita £1.3m on top of the £19.88 million paid to the agencies and that, I believe, is why the Council's figure is higher. I have raised this with the external auditor and I await his findings.
The last point to make is that Capita are the council's HR provider and one would have hoped they would have come up with some clever recruitment strategies to bring in more permanent staff and reduce the use of agency staff. Perhaps this is the re-run of their recruitment role for the Army which has turned out to be a disaster. Or maybe they quite like the gainshare payments which are directly linked to the spend on agency staff - the more agency staff the more gainshare payment.