Agenda item

To inform members of the Resources Overview and Scrutiny Committee on the level of external consultancy fees and costs for both revenue and capital expenditure for 2024/2025 and for the 1^st six months of 2025/2026.

Recommended             - The Committee notes the revenue costs and the challenges faced by the Council, as detailed in the report.

The Cabinet Portfolio Holder for Resources, Councillor Vanessa Alexander, submitted a report to inform Members of the Committee on the level of external consultancy fees and costs for both revenue and capital expenditure for 2024/25 and for the first six months of 2025/26.  The Executive Director, Resources, was also in attendance to support the presentation.

The Executive Director, Resources, explained that recruitment agencies were used for staff cover if there was a need for additional staff to cover seasonal or temporary work as well as if there was a need to deliver short term projects which required expertise that the Council didn’t have.  He reported that the report only referred to revenue costs and detailed: costs per service area, company names against the cost and reasons for the recruitment.  The Committee was informed of the total cost for 2024-25 of £925,653k and for the first six months of 2025-26 of £702,187. 

In respect of the need to use recruitment agencies, he explained that they would be used when there had been unsuccessful attempts to recruit permanent staff, there was a need for specialist expertise for short-term projects and to meet seasonal or temporary demand.  He indicated that the Council had found it difficult to appoint key personnel due to competition for people in these posts and informed the meeting that there was also a shortage of qualified people and that the salaries being offered were not competitive enough.  However, he informed the meeting that the authority was managing and, although there was a need for a review of the Council’s job evaluation system, this would not be feasible due to Local Government Reorganisation. 

The Cabinet Portfolio Holder for Resources, Councillor Vanessa Alexander informed the Committee of the difficulty of appointing staff in some areas of the Council.  She pointed out that there was a gap between experienced staff who had worked for the authority for years and young new starters in the authority.

Members submitted questions in advance of the meeting as follows:

The Cabinet Portfolio Holder for Resources, Councillor Alexander and the Executive Director, Resources responded to the questions as follows:

1.  Has the Council negotiated with an agency in respect of the supply of staff, to ensure reduced rates?

Response - There was NOT one favoured agency, Matrix is often used by other larger authorities, but there was not currently a deal in place with any agency at Hyndburn as the selection for professional roles is based upon a ‘best fit and experience’ level with interviews generally taking place.

2. The report contains a breakdown of figures for revenue expenditure but not for Capital expenditure, is it possible for the figures to be provided for the Capital Expenditure for external consultancy fees?

Response -Capital expenditure figures were provided verbally as follows:

Capital expenditure for external consultancy fees was provided for the 2024/25 & 2025/26 to date.

2024/25 - £1.057m including £31k spent on DFG and £32k on Wilson’s Playing Fields, £949k LUF scheme.

    2025/26 - first six months £518k is currently £178k LUF, £323k on Huncoat Garden Village, £10k on DFG and £5k on Wilsons Development.

3.  Are there any fees included in the payment for Universal Valuation 10 – Wilsons (details provided).  If so, how much?

Response - Fees included £16,410 (contracting fees) and 1.7% invoice value. – Fees include VAT

4. How much of the payment for Wilson Field Leisure Centre Construction Valuation 11 and Fees (details provided) is related to fees?

Response -Fees included £16,000 project management and covering Alliance Leisure to deliver and mange a lot of the scheme. – 1.35% invoice value – Fees include VAT

5.  How are these payments analysed within the Council’s internal accounting system?

     Response - The Executive Director, Resources reported that all payments were cost coded and each service area had a cost centre in relation to service need.  All costs are broken down into service area with more detailed codes within this to identify if this was cost/fees etc.

Members commented and enquired about the following issues:

·     It was important to attract appropriately qualified and experienced staff into roles.

·      Shortages of qualified staff in some areas such as Finance and Planning meant that the Council was having to pay inflated rates to recruit staff from agencies.

Other issues raised in the meeting

1. Reference was made to legal proceedings against the Council and costs.  Members requested a list of fees for legal proceedings.

Response - The Executive Director, Resources, reported that he would provide a list of legal fees in respect of legal proceedings brought against the Council.

2. Reference was made to the expenditure of over £100k on HMOs spent during 2024-25.  An explanation was requested in respect of this payment.

The Executive Director, Resources reported that the Council had undertaken work regarding the increased uptake of HMO’s in the borough and that this had become a budget pressure in Housing Benefit payments and therefore works were being undertaken to introduce more regulation and restrictions in this area. A piece of work was being undertaken to ensure that benefits were being claimed accurately, and grant money was being used to offset costs. 

3. Members also referred to the cost of implementing Article 4 in relation to consultancy fees and ensuring that the report was accurate.  Questions were also raised about why the whole borough had not been included in the Article 4 Direction.

Work was continuing on the Article 4 Direction to prevent further unregulated HMOs and so that the Council would have more control.

4. Reference was made to costs associated with Asylum Seekers, as set out in the report, and further clarification was sought on why these costs had arisen.

In respect of the cost listed against Asylum Seekers, it was reported that these costs were offset through Government funding and were being used for integration and housing.

5.  Members agreed It was important to try and bring the right skill sets into the Council.

6. Had the Council applied for grants to assist the Planning Department.

Government money was also received in 2023/24 to help Planning authorities to get back on their feet after Covid, however, although there was still a backlog, the bulk of this was covered by planning fees.  He pointed out that the Planning Department was also struggling to recruit suitably qualified and experienced staff.

7. Who signed off agency fees?

It was explained that Heads of Service / Service Managers signed off their own agency fees although any areas where this may lead to a budget pressure, would be reported through management team and a request for additional resources would be considered.

Resolved                     1)   That the report be noted; and

                                                                   2)   That the Executive Director, Resources, circulates a list of legal fees, in respect of legal proceedings brought against the Council, to Members of the Committee.