Getting to grips with the gig economy III: the public-sector workforce

14 December 2016

The first blog in this series explored the size and growth trends of the UK’s gig economy, while the second considered in more detail how social-security reform could address poor working conditions. This blog looks at a platform for domiciliary care workers and considers the radical impact similar platforms could have on the way the public sector uses temporary staff.

Gig workers care

In 2015, 5 per cent of all nurses working in the adult-social-care sector were employed by an agency, costing on average more than double the hourly rate paid to equivalent staff employed by the NHS. As gig-economy workers provide services on a temporary and flexible basis, paid only when there is demand, gig platforms present a possible, lower-cost, alternative to temporary-staff agencies.

HomeTouch – which matches customers with domiciliary carers – is one such example. While HomeTouch carers cost around half the price of agency equivalents, these gig workers earn on average 67 per cent more than agency staff, the vast majority of whom are paid at or around minimum wage because of agency commission. And service users – who are able to choose their preferred carer – are also afforded a greater role in shaping the care they receive.

If government was to develop its own platform, dependence on agency staff could be significantly reduced. Service providers could apply to be appointed to the platform, listing relevant details such as their qualifications and experience, desired work and payment level. Rather than contacting an agency, staff managers would instead select the preferred individual from the platform, who would then receive an instant notification of the employment offer. Developing and managing the platform, including vetting potential service providers, would require investment. However, given the scale of the costs associated with temporary agency workers, such investment could yield significant fiscal benefits in the long term.

Tomorrow’s gig government

Such platforms should not be restricted to social care. Government-owned platforms could drive significant efficiencies across vast swathes of the public sector.

One such area is supply teaching. Here, as with the example of social care, huge amounts of taxpayers’ money could be saved whilst also offering teaching staff better pay. In 2014-15, £855 million was spent on agency supply teachers by local-authority maintained schools and academies. Of this, an estimated £257 million was taken as commission by employment agencies. Meanwhile, only 6 per cent of supply teachers responding to a survey claim to earn £150 or more per day – around 10 per cent lower than the average rate paid by schools to a teacher with five years of experience.

Similarly, the National Audit Office found that £3.3 billion was spent on NHS agency staff in 2014-15, with agency nurses, for example, costing an average of £12 per hour more than their permanent counterparts. By eradicating these agency fees, government-owned gig platforms could drastically drive down the cost of temporary staff whilst still ensuring adequate protections against fluctuating demand. In turn, this could allow higher pay for temporary staff and substantial savings for the Exchequer.

Clearly, the vetting process for supply teachers and hospital staff must be significantly more stringent than for an Uber driver, and this means the platforms are unlikely to ever be quite as efficient. Nevertheless, HomeTrust demonstrates that labour platforms involving vulnerable service users can successfully provide high-quality temporary staff at a much lower cost than agencies.

Thinking even bolder

The above examples cover the ‘lower-hanging fruit’ – service areas where similar platforms are already emerging, where government equivalents could be relatively easily implemented and where the benefits of developing them would be particularly significant. However, looking even further into the future, it is conceivable similar platforms could be used even more radically. The police, for example, could use them to draw temporary non-emergency support for large public events. Additional ambulance drivers could be hired for tasks such as transporting patients to and from routine hospital appointments.

These service areas present greater challenges, since the consequences of failing to appropriately fill the role are much more severe. Nevertheless, the benefits already brought to workers, service users and the taxpayer by similar platforms demonstrate that these are challenges that can and must be overcome.

Ben Dobson, Researcher, Reform

Comments

Comments

Jim Bignal

19 December, 2016

This seems a great idea and needs to be looked into very carefully. But quality, reliability and security could potentially be a big challenge.