Agenda item

Report of the Deputy Chief Executive

The Cabinet considered a report of the Deputy Chief Executive that sought approval for the procurement of a new three-year contract with the option to extend for one further year for a managed service provider for temporary agency workers.

The Council currently had a call off contract for the supply of temporary agency workers. This acted as a support contract if the Council’s first choice sourcing routes of employment from the casual working pool or fixed term appointments were unsuccessful in fulfilling temporary staffing vacancies.

The current provider delivered a managed service provider (MSP) solution which involved supplying their own temporary workers as well as workers from a 2nd tier of suppliers, that the provider managed on behalf of the Council.  Twenty-nine 2nd tier supplier supplied agency workers to the Council in the last year.  The 2nd tier suppliers tended to be used for more specialist requirements such as social care.  As part of the contract, an electronic ordering system was supplied by the provider to allow the Council and suppliers to communicate requirements, supply c.v.’s, upload key support documentation for new starters and for the completion of timesheets.  This ensured the Council quicker access to the temporary market, real time visibility of the status of requests and an electronic, auditable trail for all transactions.

The benefits that appointing a managed service provider brought to the Council included:

•  Contracting with one supplier with expertise of the market who could then source from an extensive supplier pool on the Council’s behalf.

•  A supplier that could manage all of the employment and IR35 legislation that were significantly higher in the temporary agency market.

•  A saving in resource in staff not having to engage the market and contract manage multiple suppliers.

•  One point of contact for all requirements and queries.

•  Benefitting from lower rates by accumulating spend with one supplier.

•  Obtaining management information on the Council’s ongoing agency spend.

•  A significant reduction in the number of invoices the Council would have to process and pay.

Some investigation was completed prior to the procurement of the existing contract about the possibility of removing the contract and the Council potentially establishing its own ‘agency’. The idea was raised following another West Midlands Authority establishing an in-house agency, removing the need for a MSP contract. The findings found that the implementation and ongoing costs would be significant and would not eliminate the need for agencies particularly in specialised markets such as social care. For these reasons establishing the Council’s own in-house agency to replace an MSP service was not recommended. In the last year a working group had revisited exploring mechanisms for the Council to potentially manage some of its temporary agency requirements in the future, but this had not progressed to anything definitive and would not be possible to implement prior to the current agency contract expiring.

The spend through the agency contract had been falling over a number of years. Over the last year, the contract had seen an increase in spend due to the Council’s COVID response and the need to recruit additional resource to support the Council with new requirements or to support the existing workforce.  The increased spend was also a result of Human Resources Recruitment work to move temporary contract requirements from alternatively procured contracts, onto the agency contract. This had increased the overall spend under the agency contract but delivered overall savings to the Council on the margins the alternative contracts charged.

Coventry City Council (CCC) led the procurement process for the existing contract with collaboration from Solihull Metropolitan Borough Council (SMBC) who also used the same contract. The existing contract was procured using ESPO’s (Eastern Shires Purchasing Organisation) Managed Services for Temporary Agency Resource framework (MSTAR2). This allowed aggregate spend for both councils to achieve greater savings and efficiencies both by driving down prices and by resourcing one tender process instead of two. The contract was due to expire on the 25th June 2022 and had no contractual extensions available. Due to the value of spend the Council must follow the Public Contract Regulations 2015 and compliantly procure a new contract. It had been agreed between SMBC and CCC that CCC would again lead the re-procurement of the new contract.

Procurement Services had investigated 3 compliant procurement routes available for the new contract. Further details on these were detailed in  paragraph 2.2 of the report. From the routes investigated, it was felt that the route that proposed the greatest value and lowest risk to be a further competition via ESPO’s Managed Services for Temporary Agency Resource framework (MSTAR3). Further details on the reasoning for this were detailed in paragraphs 2.3 – 2.6 of the report.

RESOLVED that the Cabinet:

1)  Authorises the procurement of a new three-year contract with the option to extend for one further year for a managed service provider for temporary agency workers to commence from the 25th June 2022 and expire on the 24th June 2026 (if extension is taken).

2)  Delegates authority to the Director of Law and Governance to agree the award of contract(s) following a further competition using Eastern Shires Purchasing Organisations (ESPO) Managed Services for Temporary Agency Resource 3 (MSTAR3) Lot 1b.

3)  Authorises the City Council to enter into Contract(s) with the successful supplier of the further competition for a three-year contract with the option to extend for one further year.