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Agency fees for public sector workers – capped

Comment 2nd July 2010

Instigate a capped percentage system for all Local Authority/Health Service/Education employees etc. While many Vendor Managed Systems are in place, they are not generally used for any specialist or higher paid temporary staff. Large percentages are taken by agencies in these case, typically 25% and upwards. My solution, Cap and let those who can drive efficiencies of scale, Trade. A cap of say 12% commission should be introduced for all public sector agency staff. This is a very quick win, and it is difficult to see where productivity will be affected. 

A lack of full time employee productivity in the public sector, has required flexible temporary staff to fill the gap, senior management increasingly rely on these workers to deliver services, projects and programmes. Audit Commission recommendations require, in this instance, LAs to deliver services through full time staff. Managers use agencies to recruit these specialist and valuable staff, often these decisions are at odds with the ACs recommendations. This drives a lack of transparency, which in turn leads to less centrally managed recruitment, which has less economies of scale and therefore a high cost. This high cost is due to wasteful agency fees and not agency workers rates of pay that are generally set by supply and demand in specialist labour market areas.

Why does this matter?

This represents a huge potential saving to the public purse, and will  prevent cuts in front line services. A delicious ripe genuine low-hanging fruit.

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