Public AdministrationWritten evidence submitted by Recruitment and Employment Confederation (PROC 34)

I am writing to you from the Recruitment and Employment Confederation, the professional body for the UK’s £25 billion recruitment industry. With over 3,750 corporate members, we represent 60% of recruitment agencies by volume and over 70% by turnover. Many of our members supply into the public sector and procurement now shapes this marketplace. We have actively worked with partners such as the Government Procurement Service (GPS) and the Department of Health to feed in supplier concerns about the formulation of the parameters of supply; working across areas such as compliance and supplier communication. The REC also represents the recruitment industry on the Department of Health’s National Procurement Council—the body with strategic oversight of the £18billion a year the NHS spends on procurement.

We are aware the PASC are currently carrying out an inquiry on procurement and wished to submit our views on this important area. Whilst the REC appreciates the drivers for the development of framework agreements for the supply of agency staff in a difficult economic environment, we have consistently raised issues around SME access to and ability to compete in public procurement exercises, as well as the definition of value in the public procurement space.

This is a time of transformation of the procurement function across the public sector. We believe the efficiency, sustainability and quality of services must be the primary driver for procurement rather than just cost. Procurement has to work for the public sector and enable value. In looking at public procurement, it is essential that the notion of value is defined correctly. Value in public services cannot be just associated with cost but, in areas such as health for example, be intrinsically linked with clinical outcomes and patient experience.

In particular, we would like to highlight our concerns about the state of the procurement market for the delivery of agency staffing services to the National Health Service (NHS). There are multiple procurement providers offering framework products for agency staffing in this sector. I attach a document that acts as a valuable introduction to this market. We believe there is a disconnect between procurement strategy and implementation on the ground which is resulting in confusion and waste in the health service.

The increasingly complex and fragmented nature of the marketplace means that an agency member of staff could effectively enter into a placement at a minimum of four different price points (if the NHS client is on assorted frameworks or ignores the frameworks and goes off-framework). In addition, SMEs are becoming increasingly frozen out of the market—lacking the resources to tender in complex and bureaucratic procurement procedures. The government is starting to address this through their NHS procurement review yet much remains to be done.

We believe quality suppliers and transparent systems are central to developing frameworks that are of value to NHS clients. We would urge the PASC to look at this important area as part of their inquiry on procurement.

April 2013

Prepared 18th July 2013