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Exclusive: Trusts struggling to stick to agency caps


Trusts have found it increasingly difficult to comply with caps on the hourly rates paid to agency nurses, as the government-enforced rules have been ratcheted down in the past few months, reveals official data shared with Nursing Times.

While many trusts in England were initially able to stay within the rules, they were struggling to do so after 12 weeks, according to data from NHS Improvement, the regulator enforcing the new caps.

“We have always recognised some shifts will be over the price caps”

Chris Mullin

Experts leading the work provided Nursing Times with data from the final phase of the rule tightening, which indicated an increase in the number of times trusts overriding the caps.

However, they said it was to be expected and noted it was important trusts could breach the rules to maintain patient safety. They stressed the caps were leading to reduced agency spend overall.

When the caps were first introduced at the end of November, trusts were on average paying agency nurses and midwives 90% more than substantive staff, though the rules actually allowed them to pay up to 100% more.

“Predominantly, it’s about has the nursing director got good workforce systems in place”

Chris Mullin

The average hourly charge for agency nurses and midwives then fell in the following months – from 91% above permanent staff rates in December, to 86% above in January.

However, when they were tightened from 1 February – to 75% more per hour than substantive staff – trusts found it more difficult to stay within the rules, overall.

The data, based on a sample of 60 mainly acute and mental health trusts, showed they were paying on average 78% more for agency nurses and midwives than for substantive staff in February.

“We have always recognised some shifts will be over the price caps, so it’s inevitable the average price paid is likely to be higher than the price caps once you start ratcheting it down,” said NHS Improvement’s economic director Chris Mullin.

He was unable to provide more recent nursing data, including for when the caps were brought down further to 55% on 1 April. But he told Nursing Times that, across all agency shifts, there had been a 30% increase in the number of overrides at the start of April, compared to the month before.

He said the trend was typical of agency shifts for nurses and midwives. He noted the number of overall overrides had shrunk back by 10% by May, but had not fully returned to previous levels.

“We hear anecdotally a shift back in to bank in some trusts but we don’t collect data on that”

Chris Mullin

Mr Mullin acknowledged there was “variation” across different trusts in levels of compliance. “There are some that are having more difficulty than others and we are working closely with them,” he said.

Asked whether trusts may not always be overriding the rules when necessary to ensure patient safety, Mr Mullin said the regulator was monitoring the situation. “Trusts have an opportunity to report to us, as part of their weekly monitoring, where they have concerns about patient safety,” he said.

The “vast majority” of trusts had reported no change in the number of unfilled shifts since the caps were brought in, he added.

Trusts had also reported the price caps had helped them reduce both agency prices and volumes, with 76% saying prices had fallen since February and 45% were using fewer agency shifts since February.

Meanwhile, Mr Mullin said trust variations in compliance with the caps were more related to how much “grip” nursing directors had over workforce issues, rather than geographical factors.

“Predominantly, it’s about has the nursing director got good workforce systems in place, good advanced planning, and good rostering of shifts, and are they working effectively with the finance director and the rest of the board to tackle the agency challenge,” he said.

NHS Improvement

Exclusive: Trusts struggling to stick to agency caps

Chris Mullin

However, some areas, such as central London, had been more successful in complying with the rules so far, because rates were set at a higher rate due to the city’s expensive living costs, he said.

Despite this, London providers have recently complained of some agencies refusing to comply with agency cap rules, particularly for intensive care unit nurses. Agencies said the new cap introduced in April had been a “challenge”, according to Nursing Times’ sister title Health Service Journal.

When the agency rules were announced, the stated aim was to not only reduce agency spend but also to bring more staff back into permanent roles.

Nursing Times asked if NHSI was seeing an increase in the number of shifts filled by substantive or bank staff, but Mr Mullin said such data was not being collected. “We’ve been very mindful not to put too much of a data burden on trusts,” he said. “We hear anecdotally a shift back in to bank in some trusts but we don’t collect data on that.”

Earlier this month NHSI announced that, overall, the caps had saved trusts an estimated £290m between October and February. A “large proportion” of the savings had come from reduced agency spend on nurses and midwives, said Mr Mullin.

NHS Improvement’s focus for the future would now be to ensure the rate of cap overrides was brought down and to apply successful strategies from nursing to medical workforce planning, where there was less of a “grip”, he said.

NHS Improvement


Readers' comments (2)

  • You assert that "When the caps were first introduced at the end of November, trusts were on average paying agency nurses and midwives 90% more than substantive staff, though the rules actually allowed them to pay up to 100% more".

    This incorrectly propagates the notion that agency nurses are (or were) being paid huge amounts compared with those directly employed by the NHS. In fact, the initial cap of 100% above AfC pay rates referred to maximum agency charges including nurses' pay, 12.1% holiday pay, 1% pension and 13.8% employer's national insurance contribution, plus a modest agency margin to pay for things like recruitment, on-going staff compliance costs, rostering, 24/7 on-call, payroll, invoicing and management costs, etc.

    Now that the cap is stricter and all of that must come out of a 55%-on-AfC mark-up, a lot of agencies are struggling to retain nurses and carers, many of whom are leaving the profession because there is now no higher hourly wage to make up for the lack of guaranteed work or NHS pension, the main downsides of agency work.

    Also bear in mind that agencies' margins are squeezed for those of their staff who qualify for higher holiday pay rates under the Agency Worker Regulations. And, as companies become obligated to pay up to 5% employee Workforce Pension contributions, they will still not be allowed to charge a higher fee, meaning margins will be squeezed to a level that makes the agency business largely unsustainable, especially for the hiring of more specialised staff. This is all despite the fact that agencies (rightly) have to abide with greater and more expensive quality thresholds every year imposed under NHS framework agreements.

    Few people have sympathy for nursing agencies, though most of them were always entirely responsible organisations in no way responsible for those ridiculous "Agency staff earn £1,000 an hour" headlines) but price caps at the current level are bad for nurses and dangerous for hospitals looking for a flexible workforce and consistency of patient care.

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  • I actually think the framework agencies are the good guys and it is regressive management, government and non-framework agencies who are the real problem here. Retaining or attracting permanent staff is not happening and in fact the last refuge for nurses is increasingly the agencies. In making the struggle for staff greater by too much capping is in fact resulting in permenant staff turn to agencies. I hear so many stories of bad management by those who have previously been permenant. This government is deluded for if you break the agencies you break the hospitals - maybe that is what they want.

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