Croydon Council is to spend £9m extending its contracts with agency staff, just five months after it offered voluntary redundancy to its entire workforce to plug a hole in its budget.

The authority is expected to save £3.3m after just 76 staff from its 10,000 plus workforce took the voluntary redundancy package offered in November.

Bosses believe they must cut the annual budget by £100m over the next three years and, at the time the offer was made, said they would review their use of agency staff.

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But at this week’s cabinet meeting councillors approved a five-month extension of Comensura’s contract, the company that provides agency staff to the council.

It is the second time the contract has been extended after it was initially approved in July 2012.

The council has spent about £20m on agency workers in the last year – more than half of that was spent on staff social care services.

Greta Farian, regional organiser for Unison in Croydon, said: “It makes little sense to pay inflated costs for agency workers to cover for gaps in staffing made by a redundancy programme introduced just six months ago.

“Staff who were made redundant suffered the hardship of losing their jobs and income and it is wrong to use agency workers to substitute for permanent council jobs.”

RELATED: Croydon Council spends £20m on agency staff after making hundreds redundant

It is not the first time unions have criticised the authorities spending on agency staff.

In 2012/13 its spending rose by £5m from £15.6m, denounced as a "a gross waste of money" by Unison.

Conservative councillor Jason Perry, shadow cabinet member for economic development, planning and regeneration, said: “I would have expected to see the expenditure on agency staff being reduced, especially as we have a higher cost for agency staff than permanent staff “Yet we seem to be keeping that at the same level of expenditure, are we expecting this to come down?

“I would have thought we would have fewer agency staff given we are in a position where we are having to make people redundant.”

Councillor Simon Hall, cabinet member for finance and treasury said: “There is a shortage of permanent social workers in London so we have no choice, we go through constant recruitment rounds, we are trying to look for innovative solutions in terms of social workers training contracts.

“That is the reality of the marketplace we are trying to deal with.

“If someone applied [for voluntary redundancy] where there position was going to be necessary going forward, then their application would have been turned down.

“There is no situation where we will bring in agency staff to replace someone who went under the voluntary redundancy scheme.”

Cllr Hall said spending on agency workers accounted for about 12 per cent of the councils overall staff budget.

He said: “We are looking at bringing that to under 10 per cent.

“In terms of authorisation for agency spending there is more controls both on the initial going out to get someone in and on the contract extensions, that has to go through a much higher level now in the organisation than it used to.”