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A whole new world for public sector resourcing?

Crown Commercial Service has spent over two years working out how to solve the problem of contingent labour, and what to do when the Contingent Labour ONE framework expires in July 2017. On 22 February 2017 they outlined their vision - but is it the dream that both the public sector and recruiters hoped for, or is it the start of another nightmare?

Crown Commercial Service’s webinar on 22 February 2017 outlined their vision for the future of contingent labour in the public sector, a solution that according to the Prior Information Notice could be worth up to £5 billion . This was the (latest) outcome of over two years of work, and a large part was discussing how important contingent labour is and trying to justify the time spent trying to work out what to do. They were keen to express that this is not just a like for like replacement for Contingent Labour ONE (thank goodness) but rather a whole new strategy for resourcing.

The basic idea is that CCS wants a solution to deal with all contingent labour in the public sector, replacing not just CL1 but all other public sector frameworks eg Non-Medical Non-Clinical framework, university frameworks etc. They want to allow this vehicle to be used across the board, from direct engagement of individual contractors by the public sector, though running talent banks and - of most interest to most of the people on the call - agency-based recruitment.

This solution is going to be underpinned with a complex technology platform, which they are calling a vendor management system, and they are looking to appoint a strategic partner to run this on their behalf. There are few details of what this will looks like, mainly because it will be designed in the procurement that is being run from March to October. It appears that this vendor management system will be open both for recruitment agencies and individual contractors to sign up to, and then if a customer has a requirement they can either use a direct appointment route (either to a contractor or to an agency), nominate a contractor for a payrolling solution or go to the market for a resource. CCS did indicate that there will be a neutral vendor solution in there somewhere (similar to CL1) for customers to outsource their recruitment needs, which may well be run by the strategic partner. If that is the case, and Government mandates or strongly the use of this route, this could make this in practice pretty much a like-for-like replacement of CL1 – and we could even see Capita wanting to become the strategic partner.

CCS is looking to appoint the strategic partner for a seven year period rather than the usual four year framework agreement. Their argument is that this is a highly complex solution with a major technology investment and hence needs a longer payback period than just four year. Whether or not this is entirely justified is questionable – the vendor management system does not sound radically different to the systems run by many managed vendors, and they are usually happy that a four year period gives ample payback for them. This new solution will likely end up mandated across the entire public sector, and so it is a mystery why a seven year payback period is required. The reality could be that CCS wants to avoid having to worry about contingent labour for a long time. However, it also runs the risk that if this ends up as poor a solution as CL1, the public sector will be lumbered with it for seven years.

CCS has decided to procure the strategic partner through the competitive procedure with negotiation. This is a complex procurement process introduced in the latest version of the Procurement Regulations, often used where the customer does not really know what they want and needs to engage more closely with suppliers to shape the solution. This is perhaps strange given that CCS has spent two years workshopping this!

The CL1 framework was supposed to be finishing in July 2017, the end of the contractual four year term and the longest it should run under the OJEU notice. Unfortunately CCS has taken so long getting to this point that the new public sector resourcing model is not going to go live until July 2018. CCS was cagey in the webinar about what would happen in July, and just said that they were engaging with Government Legal Service to work out a solution. What they meant by this was that they are trying to find a way to extend CL1 by another year – otherwise it seems a strange coincidence that the new arrangements will come in exactly a year after CL1 was due to finish. It seems strange that they seem so enamoured with CL1 given the extensive criticism it has had over the past four years, and when they could easily just end that contract and allow the use of other frameworks such as Non-Medical Non-Clinical which was awarded in 2015 and which covers the same resources. Or they could just add a new lot to GCloud 9 for contingent labour for the next 12 months, which will be going live in May/June and so would be in place before CL1 finishes in July. It remains to be seen whether CCS goes down this route, which would be fully compliant with all procurement regulations, or finds a way to bend the procurement regulations to extend CL1.

Recruitment agencies are likely to have a mixed – but probably largely negative – response to today’s webinar. In one respect, finally seeing the end of CL1 provides some light at the end of the tunnel, and the new solution may offer advantages for them. However, the fact that that tunnel may be another 17 months long puts a damper on the enthusiasm. The devil will be in the detail – at one end, this could be a whole new world in public sector resourcing, at the other it could be pretty much business as usual with Capita or another organisation awarded the strategic partner contract and becoming the preferred neutral vendor for the whole public sector for the next seven years. Time will tell.