Sunday, 19 July 2009

Are Councils Wasting Money?

Last year the UNISON East Midlands regional office sent Freedom of Information (FOI) requests to the 45 councils in the region asking them how much they spent on consultants and agency workers over previous few years. All of the councils, except for Derby City Council (more on them later) responded.

The responses were staggering. From the 44 councils who responded we identified:
  • Over £54 million was spent by the councils on external consultants in 2007/08
  • Over £67 million was spent by the councils on agency workers in 2007/08
  • About half of the councils were spending over 5% of their staffing budget on agency workers
Everyone accepts that from time to time councils will need to use external consultants where they lack certain expertise. But the experience of UNISON branches is that employing consultants has become a default position for councils on most issues - council managers don't appear to have the confidence to think for themselves. Spending on external consultants has got out of control in most councils.

The situation with agency workers is even worse. It costs councils more money to employ and agency worker than it would if they directly employed a members of staff. But the agency worker gets paid less than they would if they were directly employed as there is a big slice paid to the agency. Not only that agency workers have worse terms and conditions. Why are councils wasting money on agency staff when they could employ people directly more cheaply and ensure they were employed on better terms and conditions? This madness has to stop.

Derby City Council would not give us the figures saying they did not collect them. This is strange, as all the other councils were able to supply the figures. This can only mean one of three things:
  • they have something to hide
  • their finance systems are so poor they can't record this information
  • they don't think it is important to know how much they spend on agency workers and consultants
It will be interesting to see if they have changed their systems to record this information this year - or if they still think it is not important.

This week we will be writing to all 45 councils in the East Midlands again to ask them to supply the figures for 2008/09. It will be interesting to see if they have learned any lessons after we exposed the waste last year. When we get the information we will post it up on this blog.

And if, as we expect, many councils will be saying that they need to make budget cuts later this year we will be pointing the an easiest way to save money is by cutting back on wasted expenditure on agency workers and consultants costs. It's a "win-win-win-win" as:
  • services don't need to be cut - the public don't suffer in these hard times
  • staff don't have to be made redundant - families don't suffer and the state does not have to pay out benefits
  • councils manage their budgets better - less stress for public sector accountants and managers
  • tax payers get value for money - taxes don't need to rise

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