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Government must bridge skills gap to cut staffing costs

22 April 2016

The Public Accounts Committee report raises new concerns about Government spending on consultants and temporary staff, as it is disappointed issues identified in 2010 "have not been properly addressed".

Report findings

Spending on consultants and temporary staff has increased since controls introduced by the Cabinet Office helped to reduce such spending from its peak in 2009–10.

The Report highlights that departments' overall spending on temporary staff has increased by up to 90% since 2011–12 "and specialist temporary staff often cost twice as much as permanent staff".

The Committee is "not convinced" the Cabinet Office has a clear strategy to reduce the skills gap across government, and is concerned deficiencies in departments' workforce planning "means they do not know their future resource needs and will have to resort more often to using consultants and temporary staff".

Better skills planning expected

The Committee concludes: "We expect to see much better planning of skills needs across government and a clearer view from the Cabinet Office of the place of temporary resources in the overall workforce."

It calls for clarity on skills development and recommends that by December 2016 all government departments should produce a strategic workforce plan to cover the next five years.

Departments should regularly review the need for and use of temporary staff, says the Committee, including "the progress made in filling more of these posts with permanent staff".

Up to £1.3 billion spent on temporary staff

They should also adopt new measures to better ensure temporary staff pay the correct tax.

The main 17 government departments and their agencies paid permanent staff salaries totalling £17 billion in 2014–15. Departments also spent between £1 billion and £1.3 billion on consultants and temporary staff, who are paid as independent suppliers rather than as employees.

Chair's comments

Meg Hillier MP, Chair of the PAC, said today:

"Public services are under huge pressure from budget cuts yet taxpayers' money continues to be wasted because of poor workforce planning.

Funds that could be spent on services are instead going to pay costly and avoidable bills for staffing. This is simply not good enough.

There is a place for buying in expert advice and using temporary staff if there is a skills gap but departments first need to be sure they do not have access to these skills in-house. Getting this wrong costs the taxpayer dear.

Filling permanent roles with temporary staff is short-sighted and does nothing to address underlying skills shortages in the civil service, nor to develop its expertise. When temps leave, valuable experience leaves with them.

The government needs to get a grip, identify where skills are lacking in-house and put a proper plan in place to deliver those skills through the recruitment and development of high quality, permanent staff.

The Cabinet Office has a key role to play in this and we will expect to see a greater clarity of purpose when we hold officials to account for their progress in the year ahead."

Report summary

Consultants and temporary staff can be a flexible and cost-effective part of the government workforce, for example to provide specialist skills that a department requires for a short period only.

However, these resources can cost twice as much as permanent staff and the valuable experience in service delivery they gain during the assignment is lost once the assignment ends and they leave.

Their use is therefore justified only when it is not feasible for departments to maintain the necessary skills in-house or to borrow those skills from elsewhere within the civil service.

Spending on temporary staff has increased

Spending controls introduced by the Cabinet Office in 2010 helped to reduce departments' spending on consultants and temporary staff from its peak in 2009–10 but spending has been increasing again since 2011–12.

Despite some progress since the previous Committee's 2010 report on this subject, we are disappointed that concerns identified then have not been properly addressed.

We expect to see much better planning of skills needs across government and a clearer view from the Cabinet Office of the place of temporary resources in the overall workforce.

Further information

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