Stop Wasting Money in Public Sector Recruitment

On the 22 October 2014 Jonathan Ashworth, Labour MP for Leicester South, in a written question 211600 to the Secretary of State for Health about NHS spending on temporary workers?

It was answered by Dr Daniel Poulter on 29 October 2014.

Following the Francis report many trusts were required to increase their spend on temporary staffing to meet safe staffing levels. The Department expects trusts to have a strong grip on their finances, and manage their contract and agency staffing spend (including use of locums) responsibly through effective and efficient workforce planning and management and to minimise temporary staffing costs in future years.

The amounts spent on agency and contract staff (including locums) in the National Health Service in each year since May 2010 are as follows:

NHS Foundation Trusts
2010-11 - £854,700,000
2011-12 - £907,000,000
2012-13 - £1,101,000,000
2013-14 - £1,396,200,000
Total - £4,258,900,000

This means that over a 4 year period from 2010 to 2014 - £4,258,900,000 has been taken directly from the public purse and paid to privately run recruitment agencies for the hiring of contract staff within the NHS without any consideration for the effect this has on the end user. At a time when massive government cuts are being made to spending across the board on all public services, I think this is wholly wrong and quite frankly, obscene. When other public sector establishments such as schools and social care authorities and the exorbitant costs of hiring temporary staff in these places are also taken into account, this means that the only winners in this scenario are the privately run Recruitment Agencies. Similar comparisons can be applied to the Education Sector where schools are spending huge amounts of money on supply staff from private recruitment agencies.

In response to the problem, I have developed a blueprint for change entitled ‘Share and Share Alike’ administered through a new social enterprise business called ‘Social Recruitment Solutions Limited’ that will recycle 60% of its Net Profit back into the system on a pro-rata, dividend basis and will also give a further 10% to charity.

I want to make my vision a reality by garnering support from like-minded individuals who share my belief, to come together through the spirit of partnership and co-operation in order to make a real difference in the field of Public Sector Recruitment for the benefit of all UK citizens.

We cannot affect the lack of council funding but what we can do is change the way recruitment is carried out through my New Social Enterprise Model. This model will save millions of pounds in the cost of temporary and permanent recruitment and at the same time ‘give back’ to the stakeholders who work within these sectors and also to charity.

Using the figures provided by the government as mentioned before, £4,258,900,000, my new social enterprise business model will see the NHS get back £391,631,100 and the staff the same amount distributed on a pro-rata, dividend basis. In my area, the new Hexham General Hospital cost £54,000,000 over 3 stages. This means the money given back over the same 4 year period through using my model - 7.25 new hospitals could be built at no extra cost to the tax payer.

I firmly believe that the time has come for change. We need to remember that privately run recruitment agencies have their place in the Commercial Sector but not within the Public Sector. Why should a hospital have to pay a £7,500 for offering a supply nurse a permanent contract? Multiply that by 100 (100 nurses) - £750,000. As far as education is concerned, I know that many supply teacher agencies are offering 2 for the price of one? How does that affect the professional status of a teacher? How does that make them feel? It makes them feel like a commodity to be bought and sold like a loaf of bread.

These introduction fees that agencies charge for staff to be taken on full-time contracts can be up to 25% of their annual salary. It prevents schools and hospitals being able to offer permanent positions to temporary staff because they simply cannot afford to do so. This is part of the recruitment problem particularly in the NHS.

My Social Enterprise model will not charge these introduction fees and as a result schools and hospitals and other public sector establishments will be free to offer permanent contracts to temporary staff if they wish to do so without being penalised by massive temp to perm fees. They will not have to think twice about offering staff contracts because it will cost them nothing.

This model can be used by all NHS Foundation Trusts and all Schools and Social Care Establishments run by Local Authorities, across the whole of the UK with no geographical boundaries. It all depends on which local authority has the desire to change, the vision to make a difference and the courage to take the bull by the horns and do something about it.