Civil service spending on contingent labour reached £7.4 billion in 2023
WIRRAL, UK, 7th August 2024: Chancellor Rachel Reeves recently tasked ministers and civil servants with finding £3 billion in cuts this year. This followed the Treasury audit of the UK’s public finances, which the Chancellor said exposed a £22 billion black hole left by the previous government.
This news comes in the wake of a study by accountancy firm Grant Thornton. Their report identified that 40 per cent of councils are at risk of seeing their reserves drop to less than five per cent of their annual revenue expenditure within the next five years – a position described as “financial failure”.
The challenge for local authorities is clear, how to sustain cuts in spending without impacting service to their communities?
Local authorities rely on temporary staffing supplied by agencies, with the social care sector accounting for 55 per cent of the UK’s local authority contingent workforce.*
In 2023 the civil service spending on temporary staffing reached £7.4 billion, with contingent labour costs rising by 4.5 per cent, according to a Cabinet Office letter from 4 March 2024.
These costs include invisible revenue realised by labour providers, caused by the universal industry flaw in how temporary workers are invoiced under fixed hourly charge rates. Labour providers Pension & National Insurance costs include assumptions concerning full time hours, age, tenure and pension status. However the variability of those costs in reality simply creates additional profit.
This inherently flawed and outdated practice costs UK businesses and Local Authorities billions of pounds in unnecessary overcharges. This is why The ClearVue is advocating for a complete reform of the recruitment industry. Our aim is to enable end hirers to have confidence in receiving accurate and transparent pricing within their agency expenditure, ensuring a fair’s fair commercial arrangement that benefits labour providers, their agency colleagues and the organisations who employ them.
Councils across the UK could save as much as ten per cent of their annual temporary staffing budget, resulting in millions of pounds being recovered from unnecessary overcharges.
Introducing the ClearVue model: cost recovery, contract governance and ethical compliance
The ClearVue is the UK’s leading independent provider of supplier-focused audit and workforce analytics. The cloud-based platform provides assurance of;
- Cost Recovery: Automated real-time audit of agency invoices to ensure accurate costs of employment are being applied, typically saving ten percent of the invoice value.
- Contract Governance: Automated weekly monitoring of invoice charge rates ensuring adherence to contractual and commercial governance.
- Ethical compliance: Multi-supplier / location modern slavery checks, managing worker documentation and communications, and providing insights into demographics and BAME reporting.
The ClearVue audits £500m of annual agency spend for some of the largest UK businesses and we are appealing to all local authorities to take back control of their contract labour expenditure.
Contact us to understand how straightforward and easy it is to implement our platform and start saving on your temporary staffing costs
About The ClearVue
The ClearVue is the UK’s leading Workforce Audit and Analytics platform. Automating, in real-time, over 50 data points each hour, our platform identifies the variances in agency charges factoring individual worker’s age, tenure, hours and pension status.
The cloud-based platform also tracks agency colleague holiday pay allowance versus what has been paid out by the labour provider and highlights modern slavery risks, while reporting on agency supplier performance metrics, worker demographics and colleague engagement and well-being.
The ClearVue offers unparalleled intelligence and insight to help organisations mitigate commercial and legislative risks. It is an independent, single source of truth, providing accurate temporary workforce data, compliance indicators and worker feedback.