Are We Fixating on the 10% and Sailing Past the 90%?

A Call for Local Government to Rethink Recruitment, Workforce Value and Social Impact.

Across local government, few issues generate as much recurring debate, and as little structural change, as the way we fund, manage and procure recruitment. Every year, councils undertake procurement exercises that become dominated by a familiar ritual: comparing agency margins, challenging mark‑ups, and attempting to shave a few percentage points off the costs charged by recruitment partners. This persistent fixation on the 10% margin has become almost cultural, an accepted orthodoxy within procurement circles.

But this obsession is dangerously misleading.

For all the energy spent negotiating the 10%, the evidence shows that this is not where the real problem lies. Far from it. According to research carried out by the 4 Day Week Campaign, councils across the UK spent well over £2.1bn on agency staff in 2022–23, an expenditure the researchers called “a colossal waste of taxpayers’ money” because so much of it is structurally embedded rather than strategically necessary. Their analysis showed that some authorities were spending as much as 42% of their total staffing budgets on temporary labour, a figure so high it borders on existential risk for financial sustainability if left unchecked.

Yet what is most striking about this spend is not the agency margin itself, the small fraction that suppliers retain, but the vast majority of the cost that sits beneath it. Around 90% of every pound spent through an agency goes directly on pay to the worker and the associated employer on‑costs. That 90% is where the true system pressures, inflationary drivers, and long-term financial liabilities live.

And crucially: it is the part almost no one is talking about.

While procurement teams focus on incremental margin reductions, workforce costs continue to rise sharply year on year. The challenge is not the recruitment partner’s margin; the challenge is the structural dependence on temporary labour, the lack of workforce planning, the weak pipelines into critical roles, and the absence of coordinated HR–procurement–finance strategies that could meaningfully influence that 90%.

The National Audit Office (NAO) has repeatedly warned about precisely this issue. In several reports examining local government financial sustainability, the NAO notes that funding per resident fell by 1% between 2015–16 and 2023–24, despite headline increases in total allocations. This means councils now face rising demand with a smaller real‑terms resource base. At the same time, the costs of delivering statutory services continue to climb steeply. The NAO highlights extraordinary growth in the complexity, intensity and cost of social care, huge increases in SEND transport costs, and a near‑doubling in council spending on temporary accommodation since 2015–16. These aren’t minor fluctuations, they are systemic trends that reshape the financial landscape and require an equally systemic workforce response.

The NAO is unequivocal in its assessment: immediate financial pressures are crowding out the long‑term, preventative investment required to build stable workforces, tackle churn, reduce agency reliance and strengthen organisational resilience. It warns that councils are increasingly being forced to divert funding away from early intervention and into crisis-led responses, a trend that is not only financially unsustainable but also profound in its workforce implications.

The irony is stark: Local government is paying more over time because it is unable to invest the money it needs upfront to reduce costs later.

This pattern, rising demand, rising complexity, rising cost, is not new. But the cumulative effect is now pushing councils towards a tipping point. The reliance on temporary labour grows each year not because councils want it to, but because structural shortages, unattractive EVP propositions, inadequate pipelines and inconsistent workforce planning leave them with little alternative. Focusing procurement attention on the 10% margin, then, is akin to treating a fever without investigating the infection.

In short: we are rearranging deckchairs on a ship that is already steering towards an iceberg.

And every indicator suggests that unless the sector takes a fundamentally different approach to workforce value, one that targets the 90% cost base rather than the 10% margin, the iceberg will not be avoided.

What the sector needs now is not marginal savings, but structural clarity, strategic partnership, and a collective commitment to rebuilding the workforce ecosystem from the ground up.

The Recruitment Model Is Failing, and Council HR Leaders Know It

Across every conversation held with HR leaders through the TALG: HR Hub research programme, a single message surfaced with striking consistency, a message delivered not with frustration, but with weary clarity:

“You can’t fix the 90% without a genuine partnership approach.”

This sentiment wasn’t a one‑off remark or a passing comment. It was repeated across counties, boroughs and unitaries; in children’s services, adult social care, planning, HR and transformation teams; from directors with decades of experience and from newer leaders battling crises that should never have become normalised. The conclusion was the same: the recruitment model we operate today is structurally incapable of solving the problems we now face.

Local authorities are still treating recruitment as a transactional procurement exercise, as though filling roles is simply about comparing unit prices and negotiating marginal discounts. Yet the workforce environment facing councils has become vastly more complex, and the data makes this painfully clear. The Local Government Association has found that 94% of councils report recruitment and retention difficulties, with the hardest‑hit areas being planning, social work, environmental health, finance and digital roles, the very functions that determine whether a council can discharge its statutory duties effectively.

These aren’t small, isolated gaps. They are systemic vacancies in the most mission‑critical areas of local public service. When a planning department can’t recruit, development stalls. When social workers are overstretched, caseloads become unsafe. When digital capacity is lacking, transformation grinds to a halt. And yet, the procurement mindset remains narrowly fixed on agency margins rather than the structural drivers of these shortages.

Meanwhile, the reliance on temporary labour continues to climb. Providers such as Matrix, drawing on tens of millions of data points from their public sector contingent workforce platform, have reported a 20% increase in temporary and fixed‑term staffing demand since the pandemic, with social care alone now accounting for more than half of all local authority contingent roles. This isn’t a minor shift, it is an unmistakable signal of a sector that is no longer able to sustain its permanent workforce model.

Temporary labour itself is not the problem. Councils will always need interim capacity to manage peaks, backlogs and specialist demand. The issue is the scale, the persistence, and the deepening dependency, all of which signal a workforce ecosystem under acute strain. And at the core of that strain is a recruitment system that has not evolved to meet the reality of modern labour markets.

Even as the contingent cost base balloons, many councils remain locked into conversations about the 10% agency margin, a small fraction of the total cost and utterly disconnected from the structural causes of spiralling dependency. It is an approach that profoundly underestimates the strategic nature of the challenge.

In this context, focusing primarily on the 10% margin is like measuring the tide with a teaspoon.

It captures none of the real movement, none of the real pressures, and none of the underlying forces reshaping the workforce landscape.

The tide is rising because:

• The labour market for public service roles has tightened.

• Competition from the private sector has intensified.

• Skills shortages are expanding faster than councils can train, attract or retain talent.

• Workforce planning remains inconsistent or absent across many authorities.

• EVP (Employee Value Proposition) remains underdeveloped or invisible to candidates.

• Candidates increasingly prioritise flexibility, career development, technological modernity and wellbeing, areas where many councils lag.

• Organisational churn creates a self‑reinforcing dependency on interim labour, driving further cost inflation.

And yet, the sector keeps returning to the 10% conversation.

HR leaders are clear: what we need is not cheaper margins, but stronger partnerships, recruitment models that integrate workforce planning, temp‑to‑perm pathways, improved onboarding, proactive talent pipelining, market intelligence and employer brand activation. Procurement cannot buy these outcomes using a transactional, price‑first approach. Only partnership, governance and aligned incentives can. The message from the frontline is unmistakable:

“Stop trying to optimise the cost of the last placement, and start trying to reduce the volume of placements we need.”

Until the sector realigns its focus from the 10% to the 90%, from cost‑per‑hour to workforce sustainability, from transactional procurement to strategic partnership, the recruitment model will continue to fail, no matter how many times councils retender it.

Managed Service Providers Are Rising, Because the Sector Needs Partnership, Not Procurement Battles

Across the conversations we held with councils, a clear pattern emerged: local authorities are steadily moving away from neutral vendor models and towards Managed Service Providers (MSPs). This shift is not a matter of fashion or framework churn, it is a response to the structural pressures reshaping the sector. Councils are realising that the recruitment challenges they face cannot be solved through transactional supply‑chain administration. They need something deeper, broader and more capable: strategic workforce partnership.

For more than a decade, many authorities leaned on neutral vendor arrangements because they promised fairness, breadth of supply, and compliance at scale. But as workforce shortages have intensified, particularly in social care, planning, digital and environmental health, councils have discovered the limitations of a model built primarily to broker CVs rather than shape workforce ecosystems. Increasingly, chief executives, HRDs and procurement leads are acknowledging that neutrality without strategy has left them with data but no insight, suppliers but no alignment, and processes but no partnership.

Frameworks such as ESPO’s MSTAR4 were developed precisely to confront this gap. The MSTAR4 documentation makes clear that an MSP is expected to provide a partnership‑led, adaptive service, capable of managing complex supply chains, delivering robust governance, consolidating analytics, and supporting workforce planning, not simply forwarding candidates on request. ESPO explicitly positions MSPs as strategic partners who can integrate recruitment methodologies, insight dashboards, service‑specific talent strategies, and compliance frameworks to support councils’ wider organisational outcomes.

This distinction matters. A neutral vendor can help fill vacancies. An MSP can help reduce them. A neutral vendor manages tiers of suppliers. An MSP manages labour markets, demand patterns, attraction strategies, and pipeline development. It is the difference between a fulfilment service and a workforce transformation partner.

The shift is not just happening in local government. Nationally, the Cabinet Office has moved in the same direction. Through the Workforce Solutions Framework (RM6288), central government consolidated its approach to a single‑MSP service model, recognising that a fragmented supply‑chain structure could no longer meet the demands of an increasingly complex public sector labour market. The framework sets out that government bodies must be able to secure “the right skills, at the right price, through a range of delivery models”, spanning permanent recruitment, contingent labour, Statement of Work delivery, and Recruit‑Train‑Deploy pathways. This national consolidation is a strategic acknowledgement that the old piecemeal approach cannot generate the workforce resilience the sector now needs.

This transition is fundamentally about scope and mandate. To fix the 90%, the real cost base tied to workforce structure, talent scarcity, and labour‑market inflation, councils need partners who can operate across the entire recruitment ecosystem, not only within a narrow slice of contingent supply administration. They need MSPs who can:

• Intervene early in the talent pipeline

• Build and activate an EVP that speaks to modern candidates

• Analyse and reduce avoidable agency usage

• Map demand to skills and create multi‑year workforce plans

• Support hiring managers through behaviour change

• Deliver targeted temp‑to‑perm conversion strategies

• Connect social value commitments to tangible workforce outcomes

A neutral vendor model simply does not have the remit or the levers to achieve this. And councils know it.

The direction of travel is unmistakable. Whether driven by operational necessity, financial pressure, or workforce fragility, the sector is converging on the same conclusion:

You cannot reform the 90% without a partner who has the scope, capability and mandate to act on the 90%.

The future of public sector recruitment is not a procurement battle over the cheapest margin. It is a strategic partnership built on shared outcomes, long‑term workforce investment, and the recognition that recruitment is no longer a transactional process, it is a critical component of corporate resilience and financial sustainability.

Employee Value Proposition (EVP): the most underused recruitment lever

If temp‑to‑perm is the bridge into permanence, a compelling EVP is what draws people across it.

Evidence from the CIPD, in its analysis of the public sector workforce, confirms that improving EVP, particularly around flexibility, wellbeing, development and meaningful work, plays a major role in easing recruitment and retention pressures. The CIPD’s findings show that EVP-aligned improvements in pay fairness, workplace culture and career progression correlate strongly with better recruitment outcomes and reduced turnover across public services.

Yet in many councils, the EVP is almost invisible. Job adverts still read like technical specifications. Candidate packs feel bureaucratic rather than inspiring. Internal values fail to translate into external messaging. The result? Councils undersell one of the strongest value propositions in the labour market: purpose, stability, community impact and flexibility.

Where EVP is treated seriously, the difference is immediate. West Midlands Employers, for example, demonstrated this through their regional EVP programme, showing that councils adopting a clear, authentic narrative, such as “Your Career. Your Community. Your West Midlands.”, saw improved attraction, better engagement and stronger retention, particularly among younger and mid‑career professionals who are choosing employers that reflect their values.

EVP is not a poster, a slogan or a comms exercise.

It is the foundation of recruitment, and the psychological contract between councils and the people they want to hire.

Workforce planning: the difference between firefighting and foresight

If temp‑to‑perm addresses the short-term pipeline and EVP fuels attraction, workforce planning is what sets councils up for long-term success. It converts recruitment from a reactive activity into a strategic discipline.

Data from the Local Government Association shows that the most persistent hard‑to‑fill roles, planning, social work, environmental health, finance and digital, are not suffering from short-term market fluctuations but from long-term skills scarcity within the wider labour market. These roles cannot be filled sustainably through repeated external campaigns; they require proactive pipeline development, talent pathways, upskilling, early careers programmes and structured internal progression.

Recognising this, the LGA now provides councils with a range of recruitment toolkits, workforce planning frameworks and maturity models to help authorities shift from firefighting to foresight. These resources support councils to:

• Map workforce gaps against service plans

• Model demand trajectories

• Identify future shortage roles

• Develop targeted “grow‑your‑own” strategies

• Reduce unnecessary contingent spend

• Align recruitment with organisational strategy

The councils making the greatest progress on reducing agency dependency are not the ones running the most procurement competitions, they are the ones embedding workforce planning into corporate strategy.

In summary

• Temp‑to‑perm tackles dependency.

• EVP tackles attraction.

• Workforce planning tackles the future.

Together, these are the hidden engines of change, the levers that influence the 90% where the true cost, risk and opportunity reside.

The Social Value Question: Are We Measuring What Matters?

If there is one area where the gap between good intentions and real‑world impact is most visible, it is undoubtedly social value. Every council wants to deliver it. Every procurement exercise references it. Every supplier promises it. And yet, in practice, social value in recruitment contracts rarely influences the long‑term workforce challenges that councils are grappling with today.

This is not because the framework for social value is weak. Far from it. The updated Social Value Model (PPN 002) introduced by the Cabinet Office requires a minimum 10% weighting for social value in central government procurements. The accompanying guidance is crystal clear: social value commitments must “optimise effectiveness, efficiency and economy over the contract life cycle,” meaning they must deliver meaningful, measurable, and strategically relevant outcomes, not tick‑box gestures.

But while the national standard is strong, local implementation often falls short.

Many councils still accept forms of social value that, while well‑intentioned, have no bearing whatsoever on workforce sustainability. Generic volunteering hours. Broad-brush ESG statements. Internal staff wellbeing initiatives unrelated to council needs. These activities may look positive on paper, but they do nothing to address the workforce shortages driving 90% of recruitment cost, nor do they support the long‑term capability building local government urgently needs.

This is where the disconnect becomes dangerous. When social value is not tied to workforce outcomes, it risks becoming:

• A procurement decoration rather than a workforce solution

• A performative add‑on that consumes evaluation time but delivers no strategic benefit

• A distraction that draws attention away from the real levers of workforce reform

Yet the Social Value Model actually gives councils a powerful mechanism to reshape recruitment contracts for long-term impact, if they choose to use it.

Under PPN 002, councils are fully empowered to prioritise social value commitments that directly influence labour markets, workforce pipelines and long‑term cost reduction. For recruitment, that can be transformative. Instead of generic or peripheral social value promises, councils could insist on commitments such as:

• Local apprenticeship pipelines into shortage roles

Targeted pathways into planning, environmental health, digital and social care, the roles the LGA identifies as persistently hard to fill. These pipelines create future permanent talent, reducing agency dependency long‑term.

• Returner programmes for social work, planning and regulatory services

Bringing mid‑career professionals back into the sector is one of the fastest ways to rebuild capacity, particularly where experienced talent has left due to burnout or career breaks.

• Accredited training delivered through the MSP supply chain

Instead of isolated training initiatives, councils can require the MSP to coordinate or fund qualifications that build local capability in high‑demand areas.

• Temp‑to‑perm targets tied directly to service outcomes

Temp‑to‑perm conversion is one of the most powerful mechanisms for reducing external labour spend, and one of the easiest to embed into MSP KPIs. Creating explicit conversion targets encourages councils and providers to design journeys that actually transition agency workers into permanent roles.

• Sector‑specific diversity, youth employment and inclusion pathways

Recruitment is not just about filling vacancies, it shapes the future workforce. Targeted routes for underrepresented groups, disabled candidates, young people and career changers can diversify and strengthen the talent pipeline in ways that generic CSR activity cannot.

When councils frame social value around these workforce‑centric outcomes, a profound shift occurs:

• Social value becomes a strategic workforce tool, not a decorative procurement metric.

• It begins to reduce the 90%, by building skills, lowering dependency on temporary labour, and strengthening permanent recruitment outcomes.

• It evolves from “extra value” to core value, an essential part of how councils future‑proof their services.

• It creates a recruitment ecosystem where suppliers and councils share clear, measurable, financially meaningful goals.

This is the difference between social value as an obligation and social value as a catalyst.

Because ultimately, when social value is linked directly to workforce outcomes, it stops being a distraction attached to the 10% and becomes one of the most powerful levers available to councils for reforming the 90%.

If local authorities want to fix the workforce crisis, reduce agency dependency and stabilise critical services, then the question is no longer whether social value matters, it’s whether we are measuring the things that actually matter.

The Question Every Council Should Now Ask

There comes a moment in every organisation, especially those under sustained financial and workforce pressure, when a single, uncomfortable question must be asked. It is the question that surfaced repeatedly through our TALG research, the question HR leaders said they wished their corporate colleagues would ask more often, and the question that exposes the heart of the sector’s recruitment challenge:

“Are we working on the 90% or the 10%?”

This is not a rhetorical flourish. It is a diagnostic test, one that reveals, with surprising accuracy, whether a council’s recruitment model is built for sustainability or short‑term survival.

For too many authorities, the answer today is still painfully clear. If your workforce strategy is dominated by rate cards, supplier margin debates, framework retenders, and twelve‑month procurement cycles, then, however hard you are working, however well-intentioned your efforts, you are operating almost entirely in the 10% space. That is the part of the system where the least impact hides, where the smallest savings can be found, and where the loudest debates produce the weakest returns.

Working on the 10% means:

• Managing vacancy fulfilment, not workforce sustainability

• Focusing on inputs (cost per hour), not outcomes (permanent capacity)

• Negotiating margins rather than reducing dependency

• Treating recruitment as a transactional procurement process

• Evaluating suppliers on price instead of workforce impact

And crucially, it means the council remains locked into the same cycle: shortages → interim cover → rising cost → more shortages.

But councils that have begun shifting focus, deliberately, strategically, persistently, towards the 90% are experiencing something very different.

When your operating model is centred on:

• Temp‑to‑perm pathways

Because transitions from agency to permanent roles directly reduce the long‑term cost base and tackle structural dependency.

• EVP activation

Because a compelling Employee Value Proposition attracts talent that otherwise never would have applied, which research from the CIPD shows is essential for improving retention and easing recruitment pressure.

• Workforce planning

Because the hardest‑to‑fill roles identified by the LGA, planning, social work, EHOs, finance, digital, cannot be sustained through reactive hiring alone. Councils need proactive pipelines.

• Recruitment maturity models

Because modernising hiring processes, assessment methods and candidate experience is no longer optional in a competitive labour market.

• Social value tied to labour market outcomes

Because the Cabinet Office’s PPN 002 guidance requires social value to “optimise effectiveness, efficiency and economy,” and councils can use this to secure apprenticeships, returner programmes and accredited training that strengthen long‑term workforce capacity.

• MSP partnership governance

Because frameworks such as ESPO’s MSTAR4 and the national Workforce Solutions Framework (RM6288) were explicitly designed to deliver strategic workforce support, not just vacancy processing, enabling councils to access insight, analytics, supply-chain management and long-term planning.

• Insight‑led demand management

Because the real solution to rising labour costs is understanding and addressing what drives demand in the first place, turnover, retention failures, market shortages, poor onboarding, reactive recruitment and workforce gaps that no amount of procurement optimisation can solve.

When these elements form the centre of your operating model, then, and only then, are you working on the 90%, where the fiscal, social and organisational impact genuinely lies.

Working on the 90% means:

• Reducing dependency, not just managing it

• Building internal capacity, not outsourcing gaps indefinitely

• Addressing root causes, not symptoms

• Strengthening stability, resilience and capability

• Lowering total workforce cost through prevention, not last‑minute fixes

• Ensuring recruitment becomes a strategic function, not a transactional one

In essence, working on the 90% is the difference between short-term survival and long-term sustainability.

It is the shift from firefighting to foresight. From tactical procurement to strategic workforce design. From cost-per-hour to cost-per-outcome. From a fragile workforce ecosystem to one that can endure. And the councils embracing this shift, the ones treating recruitment as a lever of organisational resilience rather than a line of expenditure, are the ones starting to pull themselves out of structural dependence on temporary labour. The sector’s future depends on whether more councils make this pivot, and whether they do so quickly enough.

Because the question is no longer whether we can afford to change. It is whether we can afford not to.

A Practical Call to Action for Councils

If everything in this paper points to one truth, it is this: councils already have the tools to move from the 10% to the 90%, but the shift will not happen by accident. It requires intentional leadership, strategic alignment and a willingness to replace old habits with new disciplines. Here is what that looks like in practice.

1. For Chief Executives & Directors

Your workforce is now the biggest financial, operational and strategic risk you face, and the single greatest lever you have to stabilise your authority.To lead this effectively, every Chief Executive and Corporate Director should demand a 90% Workforce Dashboard: a single, authoritative view showing:

• Total workforce cost (permanent + temporary + on‑costs)

• Temp‑to‑perm conversion rates

• Agency mix and spend trajectory

• Retention data across critical services

• Hard‑to‑fill vacancy performance

• Forecasted workforce gaps against service plans

If that dashboard does not exist, instruct HR and Procurement, jointly, to produce it at pace.

Because without visibility, there can be no accountability. And without accountability, there can be no reform.

2. For HR Leaders

You are already carrying the weight of workforce crisis, but you also hold the keys to unlock long‑term sustainability.

Your first move is to redesign your MSP governance model so that it centres on:

• Temp‑to‑perm outcomes

• EVP activation and employer branding

• Targeted pipelines into shortage roles

• Workforce planning and demand forecasting

• Recruitment process maturity and hiring‑manager capability

Build in quarterly workforce planning reviews, aligned to service demand, market intelligence and demographic shifts. Make these reviews as non‑negotiable as budget monitoring.

When HR leads the organisation towards the 90%, the organisation follows.

3. For Procurement Teams

Procurement holds extraordinary influence, but for too long, the conversation has been limited to margins, rates and frameworks.

It is time to redefine what “value for money” truly means.

Success is not shaving pennies off a margin. Success is enabling a workforce model that reduces long‑term cost, stabilises services and improves outcomes.

In practice, this means:

• Re-scoring tender weightings so workforce outcomes and social value impact outweigh small price differentials

• Challenging suppliers on talent pipelines, conversion rates and workforce analytics

• Ensuring social value commitments target recruitment, skills, and labour market participation, not generic corporate volunteering

• Structuring call‑offs under frameworks like MSTAR4 or RM6288 to prioritise partnership, not commodity supply

Procurement can be the catalyst for the 90%, or the brake that keeps the organisation trapped in the 10%.

The choice sits with you.

4. For Members & Scrutiny Committees

Scrutiny must now look beyond procurement spreadsheets and into the heart of the workforce challenge. Members should hold officers accountable not for marginal savings on individual placements, but for:

• Reducing avoidable agency dependency

• Improving conversion and retention

• Strengthening recruitment pipelines

• Enhancing social value impact

• Delivering a workforce that protects statutory service quality

Ask the questions that matter: Are we treating recruitment as a cost… or as the engine that keeps the council functioning?

If Members champion the 90%, the organisation will follow.

Final Thought

The sector stands at a crossroads, and the path chosen over the next 12 months will shape the resilience of local government for a decade.

One HR Director put it bluntly during our TALG conversations:

“If we don’t fix the 90%, then the 10% won’t matter, because the system will simply become unaffordable.”

The evidence is overwhelming. The financial risk is undeniable. The workforce pressures are escalating.

And yet, the solutions are within reach, if councils choose to act boldly, decisively and strategically.

The era of incrementalism has expired. The era of structural workforce reform must begin.

So the question before every council, every leadership team, every HR director, every procurement function and every Member is painfully simple:

Are you steering towards the iceberg, or changing course?