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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting 9th September 2013

 

Report of the Leader

 

Agency Staff Contract for the Vale of Glamorgan Council

 

Purpose of the Report

1.         The purpose of this report is to obtain approval for the introduction of a new agency staff contract on a Master Vendor Basis with the employment agency Randstad for the engagement of temporary agency staff within the Council.

Recommendations

1.         Cabinet approve the appointment of Randstad as the supplier for the engagement of temporary agency staff across the Council until January 2015 with the potential to extend for a further 12 months.

Reasons for the Recommendations

1.         To allow a streamlined and managed approach to the appointment of temporary agency staff and to achieve efficiencies in the prices paid for agency staff and time spent sourcing and administering those arrangements.

Background

2.         The Council previously had a contract in place with Acorn as a preferred Council supplier of agency staff for all non-professional and non schools employed roles. Whilst that contract has expired, Acorn however, have continued in the interim to honour the rates within that contract. They are not the exclusive agency used in the Council and there are various suppliers currently being used across the Directorates.

3.         Agency contracts are a service which falls within Part B of the Public Contracts Regulations 2006 and thus are not subject to the full scope of the EU regulations. Although the  regulations themselves do not directly require prior advertising of Part B services or any form of competitive tendering to be carried out, they are still caught by general obligations such as transparency, equal treatment and non discrimination and these require a degree of advertising sufficient to enable the market to be opened up to competition.

4.         A recent contract has been awarded by Cardiff City Council on behalf of the Welsh Purchasing Consortium (WPC) of which the Council is a member. This contract has been split into ‘lots’ based upon geographical areas and Education and Non Education spend.

5.         The use of this arrangement is open to Schools for support staff only. There is a separate contract under the framework, with New Directions, which is specifically available for Schools teaching and supply staff which has not been assessed as part of this exercise. It is a Schools decision as to whether they wish to use the contract.

6.         The results of the WPC Framework evaluation, which are specific to the region of the Vale of Glamorgan, are as follows.

Vendor Neutral (All Wales excluding Education )

Comensura Ltd

This Supplier would be engaged to manage agency contracts and effectively deliver a ‘brokerage’ service. The Company is not permitted to provide staff from their own resource pool. They have to enter into contracts with a selected group of tier agencies on a neutral basis.

Master Vendor (Regional provider excluding Education)

Randstad

This Supplier would source the supply of all agency personnel. The supplier can provide staff directly themselves or from a pool of tier agencies which the vendor manages.

 

7.         The contract was awarded as a 3 year framework contract on 26 May 2011 with an option to extend for a further 12 months.  The contract was awarded on the basis of 40% Technical, 60% Commercial submission.  The framework commenced on 1st February 2012 for an initial period of 3 years, with an option to extend for a further 12 months.  However no subsequent User Agreement awarded under this framework will extend beyond the expiry date of the Framework Agreement

8.         Under the framework, 2 local authorities have signed up with Comensura and 7 have signed up with Randstad – 5 of which are fully operational with another 2 in the process of implementation.

9.         The reason for the introduction of the arrangements is not to encourage the use of agency staff within the Council, rather to ensure greater visibility and control in the use of Agency Staff as it will be managed through one agency with improved management information available.

Relevant Issues and Options

10.      Both Randstad and Commensura were invited by the Council to take part in a mini competition based upon a specification provided by the Council. The specification was compiled from the original specification put out for the WPC tender and adding the specific local requirements of the Council.

Framework Evaluation

11.      The competition had to follow the basis of 40% Technical, 60% Commercial criteria used in the WPC Contract. The mini competition process was undertaken using the Bravo eSolution – this is an on line tender solution provided by Value Wales. The process followed the various stages outlined below

12.      Response to a Technical Questionnaire which covered questions on the categories of

  • Management Information
  • Maintaining and Improving Quality of Agency Workers
  • Supply of Agency Staff
  • Tier Management
  • Electronic Ordering and Approval Solution
  • Social Inclusion Agenda
  • Implementing and Managing Change
  • Contract Management
  • Equal Opportunities and Diversity

 

13.      Response to a Commercial Questionnaire took the form of a schedule of banded rates for types of agency staff. Against each banded rate the supplier had to advise of the margin (top up) rate which would be applied to the pay rate the Council would state was to be paid to the person. These rates were applied to the schedule of agency staff who were recorded as having been engaged in the Council at the time of the tender.

14.      As a result of this evaluation, Randstad were identified as the Preferred Supplier. The prices quoted under this contract were cheaper than their competitor and whilst the technical evaluation scores were close, the solution offered by Randstad was noted to be much simpler and straightforward for Managers to use, with comparably similar management information being provided. Details of the evaluation and the outcome are provided in the Part II report.

15.      The management information which will be provided by the supplier will enable the Council to have a complete picture, through the main supplier, of all the agency staff engaged throughout the Council. This is not possible at the moment due to the large number of individual suppliers engaged across the Council. The information provided will also enable the Council to successfully comply with the Agency Worker Directive requirements and will have data available to support the numerous Freedom of Information requests received. The Council will be able to be advised by Randstad of the start date of all temporary workers supplied by their agency, and will be able to administer the pay rates accordingly after the 12 week pay parity periods, irrespective of where that person is working within the Council.

Existing Suppliers

16.      The Council hold details of all the current agency providers and Randstad will initially invite them to become Tier Providers (if they are not already). A tier provider is a company who can provide temporary staff to the Council through Randstad if they do not have staff who can cover the role on their own register.

17.      In order to become a Tier Provider, current providers must “sign-up†to the requirements of this framework arrangement. The Council will provide a letter to Randstad, which can be forwarded to the current providers, which confirms the changes and advises them that the contractual relationship will now be between Randstad and themselves.  Randstad will be required to enter into contract with Tier Providers and will provide the Council with a copy of the proposed Terms and Conditions prior to implementation

18.      Randstad will be required to submit regular management information regarding the use and status of first and second Tier Providers.

19.      It is expected that Randstad will encourage most current providers to become Tier Providers under the new arrangements. However, it is recognised that some may not wish to engage under these terms. In these cases, the general approach will be to allow a maximum of three months for the agency assignment to end and then terminate all remaining contracts with such providers

20.      The supplier is expected to approach and sign up local, smaller agencies as part of their engagement process and this will be monitored.  Randstad currently have 22 agency suppliers local to the Vale of Glamorgan and Cardiff area registered as tier suppliers.

Inability to Supply Staff

21.      Where a Council manager has contacted Randstad and they are unable to fill the role requested based upon a specification and a rate of pay provided, an alternative agency maybe approached.

22.      However the terms for engagement for the alternative agency must be identical to that supplied to Randstad. If there is any change to the requirements, perhaps due to current market rates, Randstad must be afforded the opportunity to try to engage the role on the relevant terms.

23.      In the event that Randstad can reasonably be deemed to have failed to meet the requirements of the role, and are unable to supply a suitable individual, the Recruiting Manager is able to engage through the alternative Agency.

Resource Implications (Financial and Employment)

24.      The WPC framework is established on the basis of combined agency and booking fees. The basis of the rate to which these fees are added is the

Hourly rate paid to the individual + National insurance (NI) Element  + Working Time Regulation (WTR) for Holiday Pay + Pension Auto Enrolment (PAE) Contribution

25.      The Hourly Rate is clearly determined by the Council based upon the grade of the job which would normally undertake the type of work to be carried out. The NI, WTR and PAE rates are in line with employment legislation.

Assessment of the Contract Rates based upon current Engagements

26.      The Council currently collects data centrally in Human Resources on all individuals advised to have been engaged through an agency. At the 1st April 2013 data was updated and identified 177 individuals engaged through agencies (corporate, non schools based people only).

27.      The savings anticipated amount to £364k on a current spend of about £3.7m.  This is based upon the engagement of agency staff at the 1st April 2013. The actual savings achieved under this contract will vary dependent on the number of staff actually engaged during the period.

Cost of hiring Agency Staff as an Employee of the Council

28.      If at any time during the first 12 weeks of their placement the Agency worker applies for, and is appointed to, the same or a similar post in the Council to which they are on placement, through the Council’s normal recruitment procedures, the Council shall pay to Randstad a % fee based on annual salary.  These shall not exceed 0-6 weeks = 5% of annual salary, 7-12 weeks = 2.5% of annual salary.  No fee shall apply to any permanent recruitment of the Agency worker after 12 weeks of placement.


Contract Value

29.      As this contract is a framework contract the value will depend on the actual orders placed according to individual minimum user requirements.  Based on the assessment of agency staff engaged at the 1st April 2013 it is estimated to be in excess of £3m per annum.

Service Credits

30.      If Randstad are unable to supply an individual, which the Council successfully engages from another supplier, then the Council shall potentially be entitled to ‘Service Credits’. The service credits calculation takes into account costs such as those outlined below. This makes it necessary for Managers to hold and make available such information.

  • Cost of management time for the Council in looking for and securing an alternative provision as determined by the user
  • Cost of administration time for the user in placing the order and paying invoice outside of the framework
  • The number of hours contracted to Randstad outside of the framework arrangement between the User and Provider
  • The hourly rate paid to the individual

 

31.      The Council has 12 weeks from the week in which the failure occurs to credit against the appropriate invoice an amount equal to the total credit due for a failure

Training on Randstad Systems

32.      All recruiting managers and budget holders will need to be trained on the Randstad ordering and approval system.

Sustainability and Climate Change Implications

33.      None

Legal Implications (to Include Human Rights Implications)

34.      The Council will need to enter into a User Agreement which sets out the Terms and Conditions against which individual orders would be placed.

Crime and Disorder Implications

35.      None

Equal Opportunities Implications (to include Welsh Language issues)

36.      There will be opportunities for SME’s and Local Companies to engage with Randstad to supply temporary agency staff under this contract. Of 32 contractors signed up as tier suppliers to Randstad, there are 22 tier suppliers in the local Cardiff and Vale area already signed up to this contract with them.

Corporate/Service Objectives

37.      The utilisation of this contract supports the Corporate Priority of managing the Council’s money efficiently and effectively in order to maximise its ability to achieve service aims and the service objective of providing sound financial management

Policy Framework and Budget

38.      This is a matter for Executive decision

Consultation (including Ward Member Consultation)

39.      None

Relevant Scrutiny Committee

40.      Corporate Resources

Background Papers

None

 

Contact Officer

Gill Howells, Operational Manager Finance and Systems

 

Officers Consulted

Head of Accounts and Resource Management

Head of Human Resources

Head of Financial Services

Operational Manager – Human Resources

 

Responsible Officer:

Managing Director

 

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