Meeting documents

  • Meeting of Finance, Performance and Resources Select Committee, Thursday 5th December 2013 10.00 am (Item 6.)

Gill Hibberd, Rose Younger and Paul Raimbach will update Members of the Council’s use of consultants and interim staff.

Minutes:

The Chairman welcomed Richard Ambrose, Paul Raimbach and the Cabinet Member for Finance and Resources (the Cabinet Member) to the meeting.  The Cabinet Member explained that he previously ran a consultancy company and that in his opinion the Council must be judicious when using consultants and must only do so when they add value.  He explained that the services of consultants were purchased by Heads of Service.

 

Consultants were being used during the review of the Future Shape of the Council and also in property, transport and recruitment because the specialist skills required were not available in-house.  Care was taken to ensure that interim managers were not overused and the Cabinet Member had been reassured by a recent example of when a service stopped using someone because they were no longer adding value. 

 

Richard Ambrose reported that the reasons for using a consultant included the provision of specialist advice and they have specialist skills which was not always available in-house.  Consultants help with innovation, provide best practice which can be used to help with capacity issues.  Interim staff were generally used to cover posts when there was a struggle to recruit.  It was noted that there can also be longer term interims to cover capacity issues and peaks and troughs in workloads for example because the skills are not required throughout the year.  A review took place two years ago and identified the need for greater transparency and understanding and control of spend.

 

Members were advised that an e-form had been created which captured information including why consultants were used and the length of time and this gave more visibility.    Work had been taking place on spend analysis and all interims were supposed to be hired through Pertemps.  Spend on Pertemps had increased whilst that on other agencies had been reduced.  In Phase One of Transformation there was a target to save £250k on consultants and interims and the aim was to receive a £150k rebate from Pertemps. The spend in the first six months of 2013/14 was down on 2012/13.  Currently BCC was in Transformation Stage 2 and Pricewaterhouse Coopers were being used.  Therefore during the second half of 2013/14 there had been considerable spend on consultants.  It may be necessary to devolve more to business units on how to control spend. 

 

Paul Raimbach explained that consultants were very difficult to interpret and difficult to define. ProClass was referred to in the report which classifies spend by supplier.  The main contractors used by BCC include Serco which procures safety camera maintenance but their main area of business is in consultancy.  Ringway Jacobs provides construction and business engineering.  Approximately 1% of the total external expenditure is on consultants.  There had been a reduction in the number of external suppliers as Pertemps had become the main supplier.

 

Members were invited to ask questions and the following points were raised:

·     A Member asked if consultants were being used for the right reasons if they were used as agents for change and what happens when there was slippage.

·     The Cabinet Member replied that this was the responsibility of the officers and that there was a culture which encourages a reporting structure.  He would prefer for responsibility to be devolved and to hold people to account.  Richard Ambrose explained that an e-form was signed before an appointment was made and was reviewed by the Transformation Team which gave visibility and enabled checking if someone was not doing an assignment.  An analysis of spend was prepared for COMT to provide visibility and awareness.  

·      Is there a record of all the skills being utilised and what happens next.

·     No one had done this to date and the consultants had done a similar exercise in other authorities. The Transformation Manager had the responsibility of ensuring that the consultants were adding value.  The Cabinet Member explained that officers had been seconded to the Transformation team.

·     With reference to the judicious use of consultants a Member referred to the example of when one consultant ceased to add value the contract was terminated.  He acknowledged that consultants have two skills because they can do the work and dovetail the current assignment.  The Member noted that the average assignment was 60 weeks and he asked if there was a regular review process in place to ensure that the consultants do not get lost in the system and become members of staff when their current assignment is completed. 

·     The Cabinet Member acknowledged and cautioned the use of interim staff.  He explained that the judicious processes should include holding people should be held to account for output and results. 

·     The Cabinet Member confirmed that he was happy that the outcomes were being managed and agreed that processes need to become more devolved. 

·     Paul Raimbach explained that all interims should go through Pertemps which provided greater transparency of the consultants being used as interims rather than when hired through various agencies.  A more corporate record was available of who is employed where and how long they had been in place.  There was now greater awareness of interims although it was acknowledged that some had been in posts for a long time.            

·     A Member asked if there were any records kept of hiring ex-BCC staff as consultants.  Paul Raimbach replied that records were not kept but names can be recognised on the Pertemps lists and it was not possible to prevent people signing up with an agency.

·     The Member asked if information was available on the reasons for people leaving for example retirement and taking up part time work with a sub-contractor or voluntary resignation and starting work with Pertemps in order to do the same job for more money.

·     HR would be able to provide the information requested.

·     The Cabinet Member recognised that there was a need for sufficient safeguards to be in place to guard against people returning to a former job as a consultant.

·     Richard Ambrose explained that there was a policy that if someone leaves they should not return within 6 months.

·     The Cabinet Member confirmed that this needed to be enforced rigidly and the Chairman asked for a report to be prepared for the Committee on staff returning to work within 6 months of leaving.

·     A Member asked for an explanation of the savings targets.  Richard Ambrose replied that savings of £150k had been achieved and that because more interims had been employed more rebate was secured.  It was envisaged that expenditure on consultants has been reduced in 2013/14.  It was noted that many consultants were funded through vacant posts.

·     In response to a question it was noted that the higher expenditure on consultants in 2012/13 was attributed to the Transformation First Phase and the Energy from Waste project.

·     A Member expressed concern about how staff can be dis-incentivised when colleagues leave with a healthy redundancy or retirement package and return on an inflated salary.  In addition to the impact on staff there was also the huge reputational risk and he Member suggested that the process should be managed effectively.  The Cabinet Member agreed with this and stressed the importance of operating the six month rule referred to earlier.

·     In response to a question Members were advised that the average day cost from Pertemps was £330 per day.  The Member asked what was the maximum daily rate paid and he asked if the officers were satisfied that the rate charged by Pertemps was reasonable and how this was measured.  In addition further information was requested on how the rebate was calculated.

 

·     Paul Raimbach replied that he did not have the actual figures but was aware that over £2,000 was the highest rate paid but was unclear of the period of time for which it related.  A Member asked for information about what work was being undertaken at a cost of over £2,000 per day.  Paul Raimbach replied specialist financial commercial advice on Energy from Waste for short periods of time such as supporting Board meetings. The Chairman asked if the fee paid could be confirmed.

·     A Member asked if the approval of interims and consultants was done centrally and not devolved and the use of e-forms was done centrally and rigorously in order to have consistency.    

·     The Cabinet Member did not share this view but he considered that if someone was given a budget they should be expected to produce outputs and that if they were constrained in getting the right people because of a series of rules this was counterproductive.  The key was ensuring that the balance was correct.

·     Paul Raimbach welcomed more centralised control but explained that as the Future Shape developed the restrictions would have to be lifted to enable the organisation to move forward.

·     Richard Ambrose explained that following a previous review a decision was taken not to centralise services but to allow services to manage their own budgets but the Future Shape was moving to have less control in the future.

·     The Cabinet Member noted that the proposal was being made on 1% of spend.  Richard Ambrose suggested that the aim was to make the process not overly bureaucratic.

·     The Member suggested that a maximum figure could be delegated to services.  The Cabinet Member replied that the Council like the public sector was also an organisation in crisis where pay rises had not been received and that it was dealing with the situation in the best way it could. 

·     A Member asked how BCC could ensure that the rates charged by Pertemps were reasonable and how the rebate was calculated and arrived at.      

·     Paul Raimbach considered that the highest interim day rate was in the range of £500 or £600 and he agreed to confirm this point.  Members asked for clarification of both the interim and consultants’ daily rate.

·     Paul Raimbach explained that when tendering the contract the national framework was used and it was expected that the rates would fall even though they were competitive and none of them did which confirms that the rate was relatively low.  The rates were lower than with the previous contract which suggests that the Pertemps rates were reasonable.  The rebate was based on the average of the previous contract and the new contract and the difference was paid as a rebate. 

·     During a discussion on the savings Paul Raimbach explained that they can be captured from the supplier.  He added that the rebate was inflated to pay the Council a rebate. It was suggested that this was a device to capture the savings rather than return them to the individual service area. This was confirmed.

·      In response to a question it was noted that the margin from Pertemps was a flat rate of £3 per hour.

·     It was noted that in the Future Shape consultation the consultant spend was relatively low as a proportion of quantum and a Member asked if this could increase as more organisational changes take place. Richard Ambrose confirmed that in the short term as the organisation becomes more commercial consultant spend could increase. He added that a programme was in place on development of staff either through recruitment or by developing staff already in post.  It was recognised that consultants may be used as a short term measure but will be used less in the long term after recruitment or training.

·     The Chairman thanked the Cabinet Member and the officers for the presentation.

·     The Cabinet Member welcomed the opportunity to provide a clearer account and suggested that the information be published rather than produced in response to Freedom of Information requests.

·     It was also requested that an update be provided on a 6 months or annual basis.                               

Supporting documents: