Knowledge is Power

Government spent £3 billion on temporary staff

Temporary workers are invaluable in all industries, and when you need labour, hiring temporary staff can be a wise move to fill shorter contracts, meet demands in a skill shortage, or to hold the fort until a permanent staff member becomes available. 

But this week the government has come under fire from the opposition for hiring temporary contractors, with criticisms levied that they are wasting money which could be better spent on permanent staff.

Money wasters or savvy employers?

The government has found itself at the forefront of yet more criticism after it was revealed that it spent over £3 billion hiring temporary agency staff to fulfil civil service jobs.

The figures, which were obtained by Labour’s Jon Trickett, show that the number of agency staff workers has grown in some departments in the last three years. 

Employing agency workers provides more flexibility

The government said that the high level of agency staff is related to the pandemic, but that employing agency workers provides more flexibility. 

The figures quoted do point to a rise in agency workers in several departments, including the Ministry of Defence which went from a £272 million spend in 2019/2022 to £483 million agency bill in 2021/2022.

The Department for Education went up from £30.8 million in 2019/2020 to £39.2 million in 2021/2022.

Trickett said, “These astronomical amounts spent on agency staff must in the future be used to fund properly funded civil service jobs to deliver the public services we all need.” 

But its not that simple. The increased spend in the government departments quoted might be due to recruitment shortages in certain areas. A recent report from the government shows that there was a decrease of 27.4% in the number of people joining the UK Regular Armed Forces, and an increase of 20.6% leaving. And in education, provisional estimates for secondary school teacher supply in 2022/23 is 34% below target. This could explain why the shortfall needs to be picked up by temporary staff and contractors.

A government spokesperson pointed out that no money is spent on temporary labour without making sure that it is a good investment. “Any decision to use temporary staff goes through spending checks to ensure it offers the best value for taxpayers’ money,” they said.

Skills shortages and labour gap filling

Temporary workers are invaluable in both the public and private sector, especially in the current labour market where demand is vastly outstripping supply. Temporary and contract workers can provide crucial skills where those skills aren’t available from permanent staff, and gaps in the labour force can quickly be filled by people who are available.

But statistics from the Office of National Statistics shows that the actual figure for hiring temporary staff is on the decline. The percentage of the workforce in temporary contracts was 6% in June-August 2021, but down to 5.8% in June-August 2022. The government backed this up by pointing out, “the use of temporary staff, which increased during the pandemic, is declining.”

When managed correctly and given access to fair pay and benefits, temporary work can be beneficial for both staff and end hirers, providing flexibility, good rates, and employer continuity. 

Working with a compliant umbrella company is crucial for temporary staff and agencies. A decent umbrella can help provide contractors with the benefits of a stable employer, even when working on different contracts. 

Agencies also enjoy much reduced administrative burden and don’t have to take on the liability of payroll and ensuring compliance. All of these can represent a huge saving in resources for agencies and employers. 

Talk to us today if you’d like more information on the benefits of working with umbrella companies.
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