Wolverhampton Council agrees £75m contract for agency staff

Wolverhampton Council has agreed the deal with its existing temporary recruitment partner Adecco.

The new £75m contract, which could be extended for a further two years pushing the total to £100m, comes after the local authority agreed to wind down its own recruitment agency YOO Recruit after 11 years.

The council joined up with Adecco, one of the world’s largest recruitment firms, in 2016 two years after forming its own in-house recruitment agency.

The council said YOO Recruit, which it set up in 2014, was ‘no longer trading as intended’ and a separate trading company to provide agency services was no longer needed.

The council said it is still experiencing difficulties with recruiting and retaining staff – particularly in specialist roles in adults and children’s social care, finance, procurement and IT.

As a result, the local authority has spent more than £82.5m on agency staff in the last five years, including £40m in the last two years.

However, the number of temporary agency staff it employed had also fallen by around 17 per cent since last August – dropping from 863 to 718.

The staffing budget for the local authority this year is £200m.

Wolverhampton Council’s cabinet agreed in May last year to push ahead with dissolving YOO Recruit and ending its agreement with Adecco.

The contract was extended until July 2025 to allow for the winding down of the company and the new contract to be agreed.

An expected one-off dividend of £1.2m is expected to be paid this year after YOO Recruit is dissolved.

As much as £225,000 is expected to be lost in income in the next two years because of the move.

The council report, which was backed by cabinet earlier this month, said: “The use of agency workers is important as it allows the council the ability to quickly respond to the recruitment and retention issues being experienced locally, and nationally, and demand for resource.

“This could be to cope with unforeseen demand such as a requirement to provide cover for long-term sickness absence, maintain necessary levels of resource to support statutory function, cover maternity leave and vacancies pending recruitment.

“Agency workers have also been key in supporting the delivery of statutory services, as with other local authorities.

“In addition, the use of agency workers can help the council respond to peaks and troughs in service requirements, for example, additional people required during summer to maintain grounds, support at city events and so on.”

The cabinet report goes on to explain that the council spent £7.6m on agency workers in 2011/12 which were hired using a system managed by Birmingham City Council in exchange for a fee.

In 2013, the council decided to set up its own company as a temporary staffing agency and YOO Recruit was established in February 2014.

The company went on to record a £266,000 profit in 2015/16 but, according to the council, would not be able to grow without significant investment – particularly with IT upgrades.

The investment could have allowed the council to widen the recruitment agency’s scope to other Black Country local authorities and organisations such as the University of Wolverhampton and the NHS.

The seven-year partnership with Adecco was agreed in 2016 which the council said provided the necessary investment and upgrades but did “significantly reduce” profits.