Merton Council has achieved a significant reduction in its expenditure on agency workers, with spending falling by nearly £1 million in the first six months of 2026 compared to the same period in the previous year. The total spent on contingency and agency staff between January and June 2026 was £8.4 million, a decrease from £9.3 million in the first half of 2025. This reduction is attributed to a multi-faceted strategy implemented by the council to curb reliance on temporary staff.
Merton Council has actively reduced its reliance on agency staffing across several service areas, including Admin & Clerical, Facilities & Environment Services, and Manual Labour. Specific reductions were noted in Admin & Clerical (from 34 to 16 agency workers), Facilities & Environment Services (from 23 to 7), and Manual Labour (from 34 to 23). The Social & Healthcare Unqualified sector also saw a decrease from 13 to 7 agency workers. These changes reflect a broader effort to bring roles in-house.
This reduction is accompanied by a drop in the average number of agency workers employed by the council, from 299 to 253. A key initiative has been the monitoring of the length of time agency workers have been engaged. The council is no longer encouraging prolonged agency engagements, instead promoting a transition to permanent roles within the council's workforce. Furthermore, the council has successfully converted day-raters to fixed-term contracts, a practice that has proven effective even for IT contractors.
A targeted review has commenced to examine agency workers engaged for more than 12 months, with a priority on the oldest posts. This aims to reduce reliance on long-term contingency arrangements and foster more sustainable workforce planning. Alongside these measures, strengthened recruitment and retention efforts are underway. These include targeted recruitment campaigns, enhanced career development pathways, improved induction and retention arrangements, and investment in a social work academy to reduce dependency on agency staff.
Mildred Phillips, Director of People and Culture at Merton Council, presented the HR Employment Report, highlighting that the trend of falling agency worker expenditure is expected to continue. She acknowledged that while the council will always have some reliance on agency workers for short-term needs, efforts are being made to convert these roles to permanent positions where possible. The council's long-term strategy focuses on developing a skilled, motivated, flexible, and agile workforce, with an emerging Workforce Strategy to guide this development. This includes encouraging talent development, providing internal opportunities, and supporting staff in learning new skills.
Despite these successes, recruitment remains challenging, particularly in professional areas like legal and IT, where the market is highly competitive. The council competes with the private sector for specialist skills, and there is a risk of losing valuable knowledge when highly expert, day-rate individuals depart. Embedding organizational culture in freelancers is also difficult, and national shortages in specialist professions like Speech and Language Therapy further complicate permanent recruitment. The council also acknowledges the need for flexibility to access specialist expertise for time-limited transformation programs.
If the current trend of reduction continues at a similar rate for the full year 2026, a further reduction in expenditure is projected for the second half of the year, though a precise full-year figure is not yet available. The council is also increasing its use of the Apprenticeship Levy to fund qualifications and support local employment and skills development, further contributing to its long-term workforce planning goals.
While the report does not directly address potential negative consequences such as impacts on service delivery or employee morale, it notes the continued use of agency workers for short-term needs and specialist skills. The increase in interim workers, particularly those paid above £400 daily, is linked to the need for specialist skills in IT transformation and regeneration projects, suggesting that a complete reduction might affect the pace of these initiatives.
For more details on the council's governance and audit committee, refer to the Public reports pack.
