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Nursing bears brunt of NHS clampdown on agency spending

  • 9 Comments

The majority of savings made by the NHS so far on agency staff have come from nursing, according to regulators, who admit that more needs to be done to curb spending on locum doctors.

NHS Improvement said trusts had made progress in reducing agency spend from £3.7bn in 2015-16 to roughly £3bn this financial year.

“It is clear from the data… that we have made the most progress with nursing agency staff”

Jim Mackey

It said latest figures showed agency controls, including caps on hourly rates and targets on individual trust spend, had saved the NHS around £1bn since they began being introduced in October 2015.

The regular praised trusts on their “outstanding efforts” in reducing their agency expenditure, which prior to the introduction of controls, had been growing at 25% a year for the last two years.

It noted that 77% of trusts had been able to reduce their agency spending since last year, with 40% having done so by more than a quarter.

Sample data showed an 18% reduction in nursing agency prices and 13% reduction in medical agency staff prices from October 2015 to present, said NHS Improvement.

“Our evidence shows there are still very high prices paid in places for these locums”

NHS Improvement

However, the regulator admitted that most success had been achieved in reducing the agency spend on nursing and that it now intended to increasingly target locum costs.

“It is clear from the data you [trusts] provide that we have made the most progress with nursing agency staff, but that there is still a long way to go in tackling excessive costs for medical locums,” said NHS Improvement chief executive Jim Mackey.

Around 100 locum staff are earning in excess of £200,000 per year from NHS agency work, he stated in a letter to trust chief executives and chairs.

He also revealed that another 400 individuals were “earning in excess of £150,000 per year, whole-time equivalent”.

An accompanying statement issued by the regulator revealed that overall spend on medical locums was expected to be around £1.1bn nationally.

“Our evidence shows there are still very high prices paid in places for these locums,” it warned.

The top five paid locums cost the NHS over £5m, and £300m per year could be saved if all medical locums charged rates within the set price cap, it said.

In his letter, Mr Mackey set out a range of measures aimed at curbing the spend on agency doctors, including the introduction of a national target to reduce medical agency spend by £150m in 2017-18.

Specific measures include banning trusts from employing agency workers who hold substantive roles at other trusts from April. Such staff will have to be employed through the trust’s staff bank instead.

Jim Mackey

Jim Mackey

Jim Mackey

From 1 April, there will also be a significant reduction in the use of personal service companies –often used to reduce an agency worker’s tax bill – and each trust will be required to agree an improvement target on medical locum spending with NHS Improvement for 2017-18.

In a statement, Mr Mackey said: “These latest figures show the tremendous effort trusts have made to save money through our agency controls, and we’re really pleased we can say the NHS has an extra £1bn this year to pump back into improving services for patients.

“We expect these new measures to take another big chunk out of excessive agency costs; there are far too many agency staff making the most out of the lower tax rates paid via personal service companies and limited liability partnerships,” he said. “This is a key part of the problem of so many staff choosing to work as agency staff instead of NHS staff.”

He added: “These new rules will make sure most agency staff get paid and taxed in the same way as their NHS staff colleagues. This will make it fairer and more attractive for people to become permanent NHS staff, which is great news for hospitals and patients.”

  • 9 Comments

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Readers' comments (9)

  • Fair enough curb agency costs, but I know many individuals who work agency on top of their normal jobs to ensure a decent standard of living. If pay is low for normal workers, more nurses will leave the profession because it is unrealistic to live at the low income. I am not talking about huge hourly rates, but marginally better than NHS rates. Restricting substantive staff from doing agency is unfair and inappropriate and in the long run I believe will end up costing the NHS more in lost productivity and talent and potential to people choosing to work only for agencies.

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  • If NHS nurses are well paid, then they wouldn't want to work for agencies. It is not about targeting agency workers, but focusing on increasing the pay for the permanent staff.

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  • Sorry but as I will start my nursing degree in September 2017, I will have a massive debt at the end of my training due to the 30k + loan to pay for tuition fees. The first thing I will do after graduating and 1st year experience is to find the best agency that pays the best and even find a second agency to make sure I get plenty of shifts! Why shouldn't I?

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  • How can the NHS dictate to Doctors who work in substantive positions within the NHS, that they must work through hospitals banks and not agencies? Surely there must be some kind of restrictive practice here? If the NHSi continues down this road I fear more and more healthcare staff will look at their future options and either move to full time agency or look further afield for better employment opportunities.

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  • This is all in the aim to privatise the NHS it is in the plans! As for anonymous 6:03 Don't go into a profession that will not pay you back financially it is not worth it especially with the accompanied stress that is attached to this profession. Get out while you can.

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  • There is more to do agency than meets the eye nurses do agency for the following reasons.
    1. control of when and where to work there is not time or constraints and most of all no arguments over the shift patterns that is dictated to you in a permanent post.
    2. they can take annual leave when and how long they want!
    There are downfalls they have no sick pay they have to pay for all of their courses, no NHS pensions so it is not as glamorous as it may seem.
    There is also facing the attitude of the staff who feel that agency is earning more than them but if you factor in the costs of courses sick pay annual leave the agency nurse is not necessarily better off.

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  • Fair enough monetary impact was made for the positive as suggested. However, what impact did this move have on patient care? It would be nice to see a government body doing the research and actually presenting the findings!

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  • Nurses are supposed to be caring. @6.34, that attitude you speak of sexams to me to be jealousy. However, I hope it's lack of understanding because as far as I am aware, jealousy is not a trait possessed by true nurses.

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  • *sexams.... Sorry typo. Meant to be "seams"

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