The Department of Health is failing to make the most of cost-saving opportunities in its strategy to recruit agency staff into the NHS, a Commons’ select committee has said.
In a report looking at the financial sustainability of NHS bodies, the Public Accounts Committee pointed to the increasing high costs of hiring temporary staff – a £2.6bn spend in 2013-14, compared to £2.1bn in 2012–13.
It said the DH must ensure that hiring temporary workers within the NHS is done using a national framework contract unless clear value-for-money benefits can be demonstrated from local negotiation.
“Some agencies do not participate in the Department of Health’s framework contract, which limits local NHS bodies’ ability to achieve value for money”
Public Accounts Committee
The government must also benchmark the price of agency staff within and outside the national framework, said the committee. Government-approved framework contracts are currently available for trusts to use when purchasing temporary healthcare workers from private companies, but they are not mandatory.
In 2013, one such deal was agreed for the recruitment of agency nurses by the Government Procurement Service, which negotiates savings for the public sector by buying products and services in high volume.
The contract offers temporary nurses work based on “the same or no less favourable” treatment than if they had been directly recruited, according to the government.
“Radical change is needed to the way services are provided and…extra resources are required if the NHS is to become financially sustainable”
Margaret Hodge MP
But the committee report noted that “some agencies do not participate in the Department of Health’s framework contract, which limits local NHS bodies’ ability to achieve value for money when hiring agency staff, particularly those needed to fill high vacancy rates in emergency departments”.
The committee said it had asked the DH for details on its strategy to reduce NHS providers’ costs from hiring temporary staff and was told the government was developing a toolkit to address this issue.
The DH said the toolkit “aimed to predict volume so that providers could ensure they recruit enough employees to meet the numbers needed”.
It added that it was also considering new ways to lower the price of agency staff, through, for example, using its national purchasing power as the main buyer of medical staff from agencies to achieve a better price for workers.
As well as agency spend, the report looked at the overall state of the health service’s finances. It highlighted that the percentage of trusts in deficit increased from 10% in 2012-13 to 26% in 2013-14.
Committee chair Margaret Hodge said that overall the report showed finances had worsened across the NHS in the past two years, highlighting the “fragility” of available resources.
“NHS England, Monitor and the NHS Trust Development Authority recognise that radical change is needed to the way services are provided and that extra resources are required if the NHS is to become financially sustainable,” she said.
“This includes making better use of community and primary care services to reduce pressure on hospitals,” added Ms Hodge.
She called for “significant upfront investment” to implement these changes but acknowledged that the money available for this was being reduced due to the increasing number of trusts in deficit.
Ms Hodge also said that it would be difficult for the NHS to achieve the required savings by using the same approach from recent years, which has included pay freezes.
A Department of Health spokesman said: “Patient safety is top of our agenda, and in the wake of Mid Staffordshire NHS Foundation Trust [inquiry] agency workers have been used to correct historic understaffing, but we are helping the NHS to use its workforce more efficiently and reduce long-term reliance on expensive agency staff.”