London children’s services leaders collaborate to drive down agency pay

The memorandum of cooperation on children's agency social workers has been signed up to by 29 of the 32 London boroughs

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Photo: Stocktake/ImageBROKER/REX Shuttershock

Agency children’s social workers in London may no longer be able to command premium rates as 29 out of 33 councils have signed up to an agreement to cap their pay, in an effort to control council spending.

A report due to be presented today at the Greater London Employment Forum will set out the progress made so far by the London boroughs since agreeing to respond collaboratively to recruitment and retention issues in April 2015.

20% of the workforce

The report estimates that of around 1,300 children’s social work roles in London, at least 20% are occupied by agency social workers, and that the supply of workers will  not meet demand until 2022.

The 29 councils have agreed to impose pay caps on agency social workers, effective from 1 January this year.

Role  Capped Hourly Rate per hour
Newly Qualified Social Worker (post ASYE < 2 years’ experience) £25
Social Worker (with 2 years+ PQE) £28
Experienced SW (> 5 years) £32
Senior SW (Senior Practitioner) £35
Specialist / Advanced SW £35
Assistant Team Manager (Practice Manager) £38
Team Manager £42

 

The agreement also includes subscribing to a shared referencing template so “low quality” agency social workers can be identified. The report says the boroughs will work together with agencies to agree a standard for pre-employment checks and referencing.

Considerable pressure has been placed on London boroughs’ budgets by costs associated with the children’s workforce, both from increasing numbers of agency staff and increasing pay to permanent staff, the report said.

Competing with each other

“London boroughs have responded to recruitment and retention difficulties by increasing their pay for permanent staff so as to compete with each other.

“Agency pay rates have also increased quickly as a result of keen competition between boroughs for scarce staffing resources,” the report added.

The report also highlighted the increasing issue of  locum workers being encouraged by agencies to operate as limited companies in order to be taxed more favourably.

The memorandum of cooperation is not a legally binding agreement but a “statement of intent” by the collaborating boroughs to address key workforce issues affecting children’s social workers.

By signing up to the memorandum of cooperation, boroughs will also agree not to proactively headhunt staff, either agency or permanent, from other participating London boroughs.

Unintended consequence

The report’s author, deputy director of HR for the London Borough of Bexley, Nick Hollier, told Community Care growing competition to recruit staff across London had had the “unintended consequence” of creating a discrepancy between agency social workers’ level of skills and experience and the rates of pay they were able to command.

It had also created a gap between agency pay and the pay of permanent staff at similar skill levels.

He said he hoped the pay cap would allow councils to close this gap. The intention is to try and gradually lower the cap until it is in line with permanent staff pay.

“We recognise locums are a valuable part of the workforce but we want to bring the level of pay they enjoy closer in line with that of our permanent workforce.

“At first there was some scepticism from councils but as more and more signed up they were able to see that the memorandum doesn’t take away local decision-making.”

Improvements

Chair of the Greater London Association of Directors of Children’s Services regional group, Helen Jenner, said despite only imposing the cap in September in her own borough of Barking and Dagenham, she had already seen an improvement in agency numbers.

“Our situation was so bad it is possible we have seen an earlier impact than in other areas,” Jenner added.

She said that being driven by market forces to pay significantly higher salaries to agency than permanent staff had encouraged higher turnover and instability in the workforce, which was bad for the families they worked with.

“Across London, directors felt unless we took control this was going to keep getting worse and worse.”

As well as capping agency rates, the participating London boroughs have also agreed to support their permanent staff by sharing good practice, developing shared training and career development programmes and implementing the Employer Standards.

Participating councils will also aim to develop “broadly comparable pay rates for permanent staff to minimise the impact of pay as an incentive to move between boroughs”, the report states.

10 Responses to London children’s services leaders collaborate to drive down agency pay

  1. david February 11, 2016 at 1:42 pm #

    As far as I am aware this report only covers half the story because I know of other regions where this has happened. The significant piece missing from this story is that those Authorities who sign up to the memorandum have also agreed that if a social worker leaves one authority and join an agency, they will not get a placement via that agency with another Local Authority who are part of that agreement for 12 months.
    If this is so it is legally questionable because it discriminates between a social worker who has recently left a local authority in that particular region and one who has not. It also prevents the freedom of social workers to ply their trade where they choose.
    If it was simply about pay rates it might be acceptable because it is up to authorities as to what they pay but the unintended consequences of this are also discrimination, restraint of trade and potentially ‘handcuffing’ a social worker to a Local Authority/region when they might be disillusioned with how they are supported within their particular area.
    Perhaps you can check out whether this is also part of the London agreement.

    • Rachel Schraer February 11, 2016 at 3:31 pm #

      Hi David,

      Thanks for your comment. I’ve come across this arrangement at least being mooted in other parts of the country but as far as I understand, it’s not the case in the London agreement. London councils have agreed not to ‘proactively headhunt’ each other’s staff and to sign up to tighter referencing but not to prevent agency staff moving to another borough. ( I think the idea is to minimise pay as a factor, so you may want to move for other reasons but not to chase the highest pay as this will become more standardised).

      Rachel

  2. Richard February 12, 2016 at 10:58 am #

    Is this agreement or ‘understanding’ legal? It seems to be anti-competitive.

    • Rachel Schraer February 12, 2016 at 11:04 am #

      Hi Richard,
      Thanks for commenting. As it says in the article, the memorandum of cooperation is not a legally binding agreement but a “statement of intent” by the collaborating boroughs to address key workforce issues affecting children’s social workers.

      Rachel
      Community Care

  3. SWRecruiter February 12, 2016 at 11:11 am #

    I am all for fair rates being imposed on to Locums to minimise those who chase high rates of pay, often this oractice leaves service users at short notice without a QSW . My concern is that locums and agencies are continually being hit for money when the councils engage with companies to manage their bookings take a vast amount of money for this service. When will these companies margins come into question? Agencies are labeled as greedy and the general opinion is that we take vast margins. the reality is very different, based on the London MoC recruiters signed up to supply will be receiving approx 5% mark ups on the top end rates being proposed. there are many SME’s on the brink and the middle man takes up to £12ph just for running bookings, that’s without the “special” arrangements they might have with “partner” agencies! QSW’s do the hard work, Agencies ensure they are compliant and run around looking for quality candidates, and half the time you find a needle in the haystack, the terms of the supply contracts are rarely held up to support those agencies who try to do things the “right way” to help their agency workers.

  4. Liz February 12, 2016 at 12:00 pm #

    So if its not legally binding and just ‘intent’ its basically just hot air and moving things about a bit?

  5. Liz February 12, 2016 at 12:02 pm #

    So if its not legally binding and is just a statement of intent, it’s really just an exercise in hot air and moving things about a bit? LA’s can get around it surely by shrewd negotiations on a one to one level.

  6. Amzora DU February 14, 2016 at 12:21 pm #

    Some councils will struggle to keep permanent post for social workers. Who will wait for Council pay and why NOT Locum.

  7. Jeff February 16, 2016 at 8:56 am #

    It won’t last, agency workers will go were the money is at, they are hired guns. Like non agency workers some are really good and some aren’t. I like hiring agency workers because if they are no good I don’t have to spend months doing improvement plans or have constant meetings w/ HR and extra monitoring of someone’s case work. I just thank them, give them one weeks notice and send them on there way. The good ones though are worth their weight in gold

    Once council stop competing and expirence agency workers move on they council will be left w/ gaps to fill and the quickest way to do that….AYSE’s and mass hiring them brings about a whole new level of problems

  8. Andrea February 19, 2016 at 9:02 am #

    agreed Jeff – just to add, questionable workers are the responsibility of everyone a nightmare to deal with and some in my management experience should never have been passed in the first place.
    Also fed up with the ‘bullying’ of locums – who, might I remind all, do not get PAID holidays; sick leave; dependency leave; bank holidays; pension scheme; death in service grant and as Jefff says one weeks notice to send them on their way – recalculate the money they get in hand and you will find the reality is that in fact they are not paid at too higher rate than permanent staff. Must say the Govt is doing a sterling job turning us against one another!