Public Sector

The public sector is one of the most enthusiastic proponents of outsourcing. Ever since the Gershon report in 2004 recommended that the public sector model itself on private sector lines when it came to cutting costs, the outsourcing of services and functions has spread rapidly.

“The Gershon report was a real driver for outsourcing in central and local government,” says Gill Stewart, managing director of recruitment outsourcer Carlisle Managed Solutions (CMS). “There is a focus on centralising, aggregating and cost savings. But there are different challenges, too.”

Saving taxpayers’ money and lopping thousands off the cash-strapped budgets of local councils is a strong motivator for outsourcing and one that has been embraced by Brighton and Hove city council. It has been contracting out its temporary staff recruitment for the past 18 months.

“Before, we didn’t have a coherent idea about what we were spending on temporary staff and we had no clear management information,” says Lance Richard, recruitment strategy manager for the authority.

“We had a series of contracts with 60-70 suppliers, we didn’t have our own terms and conditions in place and everything was done very much on an ad hoc basis.”

It now has an arrangement in place with CMS, which not only slimmed down the number of suppliers used but negotiated a far better rate from the agencies, of which 75% of the saving goes straight to the managers.

The contracts cover temporary hires right across the council, including nursery nurses, domestic staff, lawyers and teachers (although schools can use their own recruitment systems, too), and amount to 250 workers a month, “on every level, every role, throughout the council,” says Richard. In the first year it reduced its £5m spend on temporary staff by £350,000, exceeding its targets, and this year overall recruitment spend will be reduced by £1.5million.

“We have been able to reduce our reliance on agencies,” adds Richard. “We’re getting clear management information about where the agency staff are and how long they’ve been there, and we can look to recruit permanent staff instead, rather than always using temporary staff.”

Another important issue for the council in calling in an outsourcer was the safety aspect. “Under the old system, people weren’t being checked with the Criminal Records Bureau and now everybody is, as well as work visas and suitability to work here. If people have been barred from working in one part of the council, then they’re not going to be able to come back in through another way.”

The outsourcing scheme was introduced to staff by way of a series of road shows across the council as well as the online via its intranet and had full support from the chief executive and the council’s executive directors. Monthly reviews between the council and CMS look at the speed and quality of hires and where bottlenecks are occurring in the system.

As well as cost savings, Richard has seen a huge reduction in the amount of time people spend on the phone organising recruitment. “It is only one e-mail or fax now, and rather than 150 bills a week it’s just one,” he says. “It’s very efficient.”

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