Agenda item

(Director of Resources) to consider the attached report.

Mr Maddock introduced the report on the cost of consultants and agency staff for 2015/16 and to the end of February 2017. The Council on occasions needed to employ people either on a temporary basis or for a particular project. The former situation could be for peaks in workload or to cover maternity or long term sickness. The latter is for short term specific projects when the expertise does not exist in house and to employ someone for such a short term was impractical.

Such expenditure was recorded on the Council’s finance system such that it was easily identifiable. However a reasonableness check has also been carried out to make sure that as far as possible the amounts recorded meet either the definition of an Agency worker or a consultant.

From the new tax year there were new arrangements regarding the accounting for tax and national insurance that may apply to some of our contracts. Information was given on what these changes were and how it was established whether a particular contract was affected by the changes. The legislation was referred to as Intermediaries Legislation (IR35).

IR35 was introduced in April 2000 to combat disguised employment. It stopped permanent employees leaving their employment one day and returning to their desks the next day as a limited company contractor and gaining the tax and benefits of running their own limited company.

Currently these changes apply only where the client was a public body.

From the 6 April 2017 the public sector will have responsibility for deciding whether an individual who was personally providing a service falls in or out of scope of IR35; and in certain circumstances liable for deducting tax and National Insurance Contributions (NICs) at source. Before this, this responsibility fell to the individual themselves.

Councillor Patel asked if agencies and consultants were employed on a project by project basis or at a daily rate. Mr Maddock said that a lot of them were on a daily rate, usually to cover a gap in staff, when management could not recruit immediately.

Councillor Patel then asked if we stipulated an end date and the amount of work to be done. He was told that agency staff had set dates; for consultants engaged for a piece of work, it was up to them how long they took.

Councillor C Roberts asked about any problems with staff retention. Mr Maddock said there were some, but in specific areas, such as forward planning, planning and building control. This was due in part with our closeness to London and Harlow. Councillor Kane added that at the end of the day it came down to salaries.

Councillor Whitehouse said that temporary contracts also came into this mix. The Local Plan was originally a short term project; but, when did it change to a long term one. Councillor Lion said that the Assistant Director (Human Resources) would be looking into this and how we would operate in the future.

Councillor Kane noting the IR35 legislation said that the new way of working could mean that that new contractors could walk away. Mr Maddock said that the Assistant Director (Human Resources) was looking into this and was also seeking some legal advice.  Councillor Kane asked that the outcome for this be reported back to the Committee when available. This was agreed.

RESOLVED:

(1)  That the Select Committee noted the report on agency staff and consultancy;

(2)  That an updating report be brought back when further information was available.