Steve Wilson, Director of Collaboration and Development at Commercial Services Group (wholly owned by Kent County Council) looks at the emergence of the in-house model for Interim and Temporary staffing.
September 1st, 2020 was a day for celebration at Commercial Services Group (CSG). It marked the official launch of our latest Joint Venture partnership with our colleagues at Luton Borough Council.
The joint venture, a Teckal company called Luton and Kent Commercial Services LLP or to use its trading name Connect2Luton, has been set up to manage the Interim and Temporary staffing requirements for the Council. This will be achieved through a direct sourcing model with the support of a number of specialist supporting agencies engaged through a Dynamic Purchasing System.
Luton Borough Council, through Connect2Luton became the latest in a growing number of Local Authorities to look at an alternative to the traditional outsourcing approach and followed Hampshire County Council and Kent County Council in engaging CSG to help them achieve this.
The question is why?
The Interim and Temporary staffing market is a mature market, with over £3b spent by Local Government each year and over 14,000 employment agencies to choose from.
To reduce the time and resource required to manage such a broad supplier base, the market evolved into a managed service market where suppliers are managed through either a Master Vendor, Neutral Vendor or Hybrid Vendor.
Over the years these models have provided Local Government with widespread savings, through either a direct reduction in fees or indirect savings through the management of the suppliers and associated procurement and compliance.
Feedback from over 60 Local Authorities CSG engaged with, identified a trend that potential direct savings had began to dry up as the market reached its sustainable low point and in some cases quality had followed price and off contract spend had increased as Local Authorities looked to widen their nets to capture quality resource.
When engaging with these Authorities there was also a general appetite to look at in-sourcing the provision, to gain more control and flexibility, to drive quality and manage costs. This however was often dismissed within an options appraisal, due to the levels of investment and risk associated with establishing an end-to-end technology platform to enable a direct souring team to compete for hard to find skills in a highly competitive market.
By leveraging the experience and technology utilised in the successful delivery of services to Kent County Council, the team at CSG began to identify areas of savings, through a sharing of technology, processes and infrastructure, while reducing risk through the sharing of knowledge and expertise.
This approach can then be accommodated to set a baseline that supports each individual Authorities priorities, which are always unique and often varied.
A drive to reduce costs can be achieved through the direct sourcing of workers, through an in-house sourcing team, which reduces external expenditure and focusses on the retention and redeployment of quality workers which leads to significant indirect savings.
Spend reduction can also be achieved through a reduction of reliance on Interim and Temporary workers, through the conversion to permanent posts, something the in-house teams are focussed on.
With savings, through the retention of spend within the self-sourced model, comes Social Value, through the ability to reinvest savings into front line services and development programmes.
The flexibility realised through a Council owned service can also lead to additional Social Value programmes, with the ability to branch out into other areas of community engagement such as career advice and return to work programmes. While this activity may also be available to some extent through an outsourced model, it can be limited in scope if not included in the original procurement specification and subsequent outsourcer pricing submission.
The in-house models will certainly not be for everyone but with more and more Local Authorities realising there is now an alternative to outsourcing, that are already delivering significant returns, both directly and indirectly, they have moved from viable to demonstrable.