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Agency staff pricing caps bring NHS ‘significant risks’

  • 3 Comments

Regulators have said the new price caps for agency staff will bring “significant risks” for patient safety and performance, especially for trusts with reputational problems.

An impact assessment, published by Monitor and the NHS Trust Development Authority, also flagged up financial risks associated with the policy, warning that it could drive an overall increase in pay costs if trusts respond by increasing their use of overtime shifts.

“Price caps may reduce the supply of agency shifts, leading to staff shortages”

Impact assessment

Last week, the Department of Health announced plans to cap the hourly rate the NHS can pay agency staff at 55% above the pay levels of permanent staff.

The impact assessment stated that while “national level price caps may play a role in reducing the reliance and expenditure on agency and locum staff”, they come with “significant risks to patient safety and performance, which need to be managed, and risks that savings will be limited”.

It warned: “Price caps may reduce the supply of agency shifts, leading to staff shortages. This could lead to risks to patient safety and clinical quality, and to performance and patient access.

“This may be experienced more acutely in particular trusts or in particular specialties,” it said. “The greatest difficulties are likely to be faced by challenged trusts, especially those formally in special measures and/or subject to [Care Quality Commission] compliance/enforcement actions related to staffing.”

It added: “Experience suggests that, particularly as a result of adverse reputational issues affecting their ability to recruit substantive staff, such trusts often rely on agency staff to maintain continuity of services, and that those agency staff have usually required a significant premium to take on such roles.”

The impact assessment document suggested trusts in rural areas may also struggle, and warned of a potential “negative impact” on services which have long suffered from staff shortages and are “often the most pressured”, such as accident and emergency and intensive care units.

The document added: “There is a further risk that costs may increase overall, if trusts respond to price caps by significantly increasing the wage rates of all staff, including substantive staff, potentially through increased use of overtime.”

“The greatest difficulties are likely to be faced by challenged trusts”

Impact assessment

However, the regulators concluded that “the balance of clinical risks supports taking action to tackle agency costs now and bring agency staff back into the regular workforce”.

The impact assessment assumed a compliance rate of 70% with the caps, which reflected the potential use of “break-glass” clauses, which allow trusts to breach the cap on grounds of clinical safety.

Under this compliance rate, the regulators estimate the caps would produce annual savings of £370m once the changes are fully implemented, with £110m saved on agency nurses, £210m on locum doctors and £40m on other agency workers, such as allied health professionals and clerical staff.

  • 3 Comments

Readers' comments (3)

  • So even the "leaders" of the NHS agree that this daft move is dangerously risky and yet will save much less than imagined. So logic suggests that the government shouldn't go ahead with it. Is that going to stop them? No!

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  • yet another move towards tearing apart the nhs so they can sell it off cheap to their buddies from eton

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  • Why will Trusts struggle to pay less per hour? That is, no more than 55% above NHS pay per hour.

    You don't need to be Einstein to work out that you could have 2 manpower hours of permanently employed staff for the price of 1 manpower hour of agency staff.

    Can hospital wards have permanently employed staff at "nursing rush hour" times? Is there sufficient flexibility for this?

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