Are agencies the baddies of NHS procurement

My ears pricked up this morning when I heard the NHS CX, Simon Stevens, explain to Andrew Marr that they were "going to clamp down on some of the staffing agencies ripping off the NHS".  Is this some sort of role reversal taking place - the Conservatives are in power but the market are the baddies!

In the past many public sector organisations believed that their traditional approach of having a 'bank' which they managed and could call on was flawed - outsourcing was the new best practice. Exploring the option of outsourcing did make sense but in parallel there needed to be a proactive approach to managing both the agencies and the internal demand. I observed agencies providing an easier option than the hurdles of sourcing internally through HR. Justifying the need for 'temps' was relaxed and while staff previously covered for short-term absences, that became the exception. The agencies made it easy to just pick up the phone and have a temp sitting at a desk two hours later. Then, months later, like a version of Parkinson's Law, the temp had become indispensable and the temp had become a necessity.

To me what went wrong was that public sector bodies relaxed their control mechanisms - they devolved control. Worse they gave it away. The agencies weren't the baddies, they were 'partners'. But as the clients raised their expectations of demand there was a parallel need to manage risks through prices by the agencies.

Now "some" of the agencies are perceived to be "ripping off the NHS". What happened to the 'intelligent client'? What happened to the belief in competition? What happened to managing contract prices?

Those who believe the market is ripping the NHS off would do well to review the robustness of their demand management. Agencies provide a solution which the public sector has come to rely on. Power has perhaps shifted to the market as opposed to the client. Before assuming the NHS is being ripped off why not consider a ,make/buy options appraisal. Before clamping down they better have a risk management strategy which addresses how they will respond if some of the critical providers just  say "okay, we'll not bid anymore!"

PSNI dysfunctional procurement strategy: A case study or 'who done it' mystery?

Two years ago I discussed the PSNI's procurement of temporary staff, many of whom had just retired from jobs in the same organisation. This week the Northern Ireland Assembly's PAC published its inquiry report - ten recommendations of which seven relate to procurement. The 'case' should be of interest to all those organisations which make use of Agency staff. 

Those with an interest in procurement strategy as opposed to public policy could look at the Inquiry slightly differently. Is this one of the few situations where there is evidence of a procurement approach actually working in opposition to the intended outcome of the legislation? Cynically, was a procurement approach requested which would satisfy the PSNI's (Police Service of Northern Ireland) objective of 'getting round' the need for changing the personnel? Put slightly differently, was this an 'intended strategy' to match objectives set for procurement or an example of poor procurement?

First, some background. The transformation of the make-up of the police was one of the core commitments of the Good Friday (Northern Ireland Peace) Agreement. Basically there was a desire to have a smaller police service (a peace dividend) and more balance in the mix of Protestant/Roman Catholic police officers. Former RUC (Royal Ulster Constabulary - the old police service) officers were given the option of early retirement while a parallel recruitment campaign was put in place to balance the make-up of the new PSNI ). But the procurement approach resulted in more than 1,000 retired RUC officers, 19% of those who took early retirement, being brought back as agency workers to the new PSNI. £106m was spent between 2004 and 2012 on these Agency staff who had just left the RUC. Had those offices been reemployed directly by PSNI they would have had to repay their severance lump sum, which was not the case if they were hired as Agency staff.

Yet again, there was a lack of competitive tendering (you may also find Peter Smith's post today on a similar issue at MOD of interest). The service delivery commenced in 2002 but the competitive tendering was only in 2008. There had been a legacy contract in place for permanent staff which had a throughput of £2m per year, but a variation on that contract to include 'temps' led to a spend of £44m over four years.

Come fly with me or should I say our agency staff

There is absolutely no doubt that the increasing use of temporary staff as helped raise the profile of procurement.  I actually quite enjoyed letting contracts for agency staff - they provided real influence over big expenditure decisions which had previously been 'closed' and they also delivered significant cost reductions.  One of the things which puzzled me was the exponential demand for the contract which doubled in size every year.

One of my abiding memories of working with Belfast City Council was Bill Clinton's Presidential visit.  It wasn't the razzmatazz or even the special agents approach to sweeping the building, but bizarrely, that Clinton met a disproportionate number of Agency staff about whom very little was known.  I sometimes ask myself: 'did we escape a terrorist attack by the skin of our teeth?' Are there some roles which shouldn't be considered suitable for temporary staff?

It is against that background I was amazed to learn of what now seems to be an over-dependency of Ryanair on Agency staff.  Not temporary baggage handlers, not temporary cabin crew, not even temporary check-in staff - no agency staff as aircraft pilots!

The curious case of the procurement of blue light temporary staff

PSNI are the subject of an investigation on re-hiring former officers as temps. Estimates of spend vary but somewhere between £45m and £60m is reported to have been spent over five years. That's slightly more than the response given to a FoI request in 2009 which stated an estimated value was £5m (per year).  

Three quarters of those hired are former police officers who were recipients of redundancy payments. That's 300 staff. 

You may ask, 'why were they made redundant in the first place - what was the desired outcome?' The redundancies were the result of the Patten Recommendations to transform the former RUC into a new PSNI. Critics could argue that aspiration has not been achieved. Supporters could say there was a need to ensure business continuity and the terrorist threat had not gone away.

In addition, it was a condition of the redundancy scheme that if those made redundant were re-hired as police officers there would be a repayment of the redundancy payments. Was the contract designed to circumnavigate that requirement since the stipulation doesn't apply if those re-engaged are civilians; even, it seems, if they are carrying out broadly similar roles.  Is this what is meant by the private sector taking up the slack from public sector redundancies?

If the intention was to re-engage as civilians, then the investigation needs to go beyond one contract into the whole category.  Up until now no one has mentioned the contract for Outplacement Services.  If you are fortunate enough to be unfamiliar with this service, it is a bit like a JobCentre Plus advisor which is supposed to help those made redundant adjust, and get back into employment. My experience of it was that it was a smoke and mirrors service which should have been paid by results.  But if they were paid by results, I don't think they would exist and a grant to the Samaritans may be better use of public money - I may save that argument for another day.  Nevertheless, how much was that contract worth and was its purpose merely cosmetic if a revolving door would have sufficed?

Now we face an interesting scenario which may resonate with others.  

How does this sit with