Why did council spend £445,000 to fill jobs?

Jun 13 2008 by David Bartlett, Liverpool Daily Post

LIVERPOOL city council’s chief executive and other directors have broken the authority’s rules when using recruitment agencies to fill vacancies.

A leaked internal memo seen by the Daily Post states that Colin Hilton and other directors “have not always followed” the council’s contract standing orders.

Last night, a council spokesman said the issue had arisen because existing tenders with a number of specialist recruitment agencies had expired, but vacancies needed to be filled as quickly as possible.

He insisted the council had got value for money, but it is understood the council accepts the findings of the audit and fresh tenders will now be put out.

The document reveals the council has spent at least £445,000 with executive recruitment agencies since April, 2006, to fill a number of vacancies, but quotation procedures were not followed on a number of occasions.

The memo spells out to the council’s executive management team (EMT) that three quotes must be sought.

“EMT are reminded that the contract standing orders apply to all officers and must not be circumvented under any circumstances,” the report states.

Last night, the Labour opposition called for a full explanation of the matter and demanded that the practice must be brought to a halt immediately.

A recruitment expert, who spoke to the Daily Post on condition of anonymity, last night warned that the council may have paid over the odds for some of the vacancies to be filled.

The consultant said that the “going rate” for helping fill local authority positions was between £20,000 and £25,000 per vacancy.

The expert said that the matter would be a disciplinary matter at most councils as it was straightforward enough to get three quotes.

“It’s just a matter of sending an email with the brief to three companies to ask for quotes.”

The expert said that not following this process was “laziness” at best.

The memo states the council has used two executive recruitment agencies since April, 2006 – Veredus and Gatenby Sanderson.

Rockpools were used in the failed bid to recruit for a new city solicitor in April, but the costs of using that firm were not available when the report was compiled.

With regard to using Rockpools, the report states “. . . the quotation procedures in the contract standingorders were circum-vented . . .”

It is understood that the candidate offered the position turned down the appointment.

Veredus helped fill two senior positions in regeneration, but it “appears that another portfolio has used their services without following quotation procedures”.

The company was paid a total of £247,000 for their services since April, 2006.

Gatenby Sanderson, known to be leaders in the children’s services area, were used to fill four positions, “but they have been used to fill at least one additional position for which quotation procedures were not followed”.

The company has received £198,000 from the council. “The contract standing orders state that, for expenditure below £100,000, at least three quotations must be obtained by procurement services,” the report states.

“Exceptions to this are only allowed if it is an emergency or the services are of a specialist nature for which competitive prices cannot be obtained.

“In such circumstances, it is the head of corporate procurement who decides whether the procurement can be made, not the chief officer.”

Deputy Labour leader Paul Brant said: “To spend £½m on headhunters at a time of financial crisis for the council is astonishing.

“To add insult to injury, the failure to get competitive quotes means council taxpayers could have had this work done for significantly less cost.

“Labour will demand a full explanation as to why the council’s own regulations were breached on a number of occasions, and we want an assurance that this practice will stop immediately.”

A council spokesman said: “A report by the city council’s internal auditor has found that existing tenders with a small number of specialist recruitment agencies had recently expired.

“As there was a need to recruit several senior and highly specialist staff, the existing agencies were utilised to ensure we were able to recruit as quickly as possible and attract the best candidates for these important positions.

“Following advice, an additional technical recruitment company was engaged for one post owing to the specialist nature of that particular post. The city council obtained value for money throughout this period, and the consultants used have provided the council with an excellent service.”

davidbartlett