Is the NHS ripped off by agencies or its own workforce planning?

Health secretary Jeremy Hunt pitted the NHS against ‘rip-off staffing agencies’ last week in a bid to save the health service millions of pounds.

But his announcement of new rules on how NHS trusts use staffing agencies in England, including a cap on agency staff spending for trusts who are in financial difficulty, quickly prompted criticisms.

Included in the package of measures, a maximum hourly rate for agency doctors and nurses will be imposed on trusts in financial deficit and all NHS employers will be banned from using agencies that have not been approved.

But Tom Hadley, director of policy at the Recruitment and Employment Confederation (REC), the professional body for the recruitment industry in the UK, argues that Mr Hunt is ‘scapegoating agencies for the NHS’s own mismanagement of workforce planning’.

Safe staffing

RCN general secretary Peter Carter says more detail on the government’s plans is needed to answer questions such as how the maximum rate will be set. He cautions that the plans for a spending cap must not prevent trusts from providing safe staffing levels where there are no alternatives.

In the past three years, the spend on agency staffing by the NHS in England rose from £1.8 billion to £3.3 billion in 2014/15. The Department of Health (DH) says this was more than the cost of that year’s 22 million A&E admissions combined.

The DH points to agencies being paid up to £3,500 per shift for doctors. Meanwhile, the Frontline First report published by the RCN in February showed that between 2012/13 and 2013/14, spending on agency nurses by 168 trusts surveyed in England rose from £327 million to £485 million.

Mr Hunt says the new measures on the use of agencies will sit alongside a £2 billion budget increase for the NHS this year and a further £8 billion every year until 2020.

‘Make efforts to value and retain existing staff’

– Peter Carter

The NHS needs ‘to deliver its side of the bargain for patients by eliminating waste, helped by the controls on spending we are putting in place’, Mr Hunt said. ‘The NHS is bigger than all of these companies [staffing agencies], so we will use that bargaining power to drive down rates and beat them at their own game.’

Under his plans, regulators Monitor and the NHS Trust Development Authority (TDA) will work respectively with foundation trusts and NHS trusts in financial deficit to set caps on their agency staff spending.

Seventy seven out of 152 foundation trusts ended 2014/15 in deficit, as did 40 of 91 NHS trusts.

Spending restrictions on nursing agency staff will be introduced from July 1, followed by caps on the amount spent on clinical and management staff.

Both regulators will have to sign off trusts that want to spend more than their cap or use agencies that are not part of the NHS framework agreements, which are designed to provide NHS organisations with value for money when sourcing temporary staff from commercial suppliers.

Voluntary compliance

A DH spokesperson says the cap on agency staff spending will take into account regional labour markets.

The maximum hourly rate will apply to all foundation and NHS trusts getting financial support from the DH or in breach of their Monitor licence, and the rate will be set locally by the two regulators and NHS England, with oversight from the DH.

In a letter to the chairs and chief executives of foundation trusts, Monitor chief executive David Bennett said that while the controls will apply to trusts in financial difficulties, all other foundation trusts will be asked to comply voluntarily to make better use of their resources.

Trusts will also have to seek permission from their regulator for any management consultant contracts over £50,000. Plans for collective negotiations with suppliers have also been announced.

At the REC, Mr Hadley says agency nurses ‘play a vital role in ensuring safe staffing ratios and quality patient care in an NHS that cannot find sufficient permanent staff’.

He adds: ‘There has been an increase in demand, and the reason for that is there is a shortage of trained nurses and healthcare workers. There has not been investment in the pipeline for people coming into the sector.’

This is backed by a report published in April by independent cross-party body Civitas, which said that since the coalition government came to power, nurse training places have been cut from 25,904 in 2010/11 to 21,529 in 2012/13.

Picture credit: Daniel Mitchell

Mr Hadley also questions whether trusts that have reached their cap on overall spending will be able to cope with surges in patient demand, such as during a winter cold snap.

In his letter to the trusts, Dr Bennett said: ‘There will be a mechanism for local managers to override these limits in the interests of patient safety.’

The DH also says the rules should not compromise patient safety, adding there will be an ‘exceptions process’, which it is working on with Monitor and the TDA.

A spokesperson for the TDA, which now works with 89 NHS trusts, said: ‘There is a consensus that we need to do something different on the cost of agency staff and consultancy.

‘We are currently working with providers and Monitor to establish the best way to implement these new rules.’

Mr Hadley agrees that there must be controls on costs and a balance struck between temporary and permanent staff, but he argues that ‘there needs to be a recognition that well-managed agency staffing is a real bonus to the NHS’.

Dr Carter says that it is encouraging to see the DH and NHS England chief executive Simon Stevens making a concerted effort to tackle the long-standing problem of agency staffing.

But he adds: ‘Instead of relying on agencies, efforts must be made to reward and value existing staff and to retain the skilled and experienced workforce through the introduction of family-friendly working policies.’

Unison head of health Christina McAnea says that the NHS ‘must make nursing more rewarding to would-be recruits’.

‘Always a role for agencies’

Helen Goldsmith, a clinical nurse lead for Local Care Force, an agency in the north of England, says she is not aware of any agency nurses getting ‘exorbitant amounts of money’ in her patch in West Yorkshire.

She earns between £16 and £25 per hour – the latter rate for night shifts – in the private healthcare sector, and is aware of similar rates for upper band 5 agency nurses in the NHS.

She says the framework for agreed suppliers is monopolised by a handful of big agencies, and that ‘if there were more agencies on the framework, the NHS would have better choice and could ensure they are not being charged crazy rates’.

‘At the end of the day, agency staff will always have a role in the NHS,’ says Ms Goldsmith. ‘There are not enough trained nurses and it takes three years to train a nurse.

‘Until they get the numbers up, they will always be in a muddle.’

She thinks the main reasons nurses choose to leave permanent posts for agency shifts are the stress of working in the NHS and more flexibility in their hours with agencies.

‘If you work for an agency, you can pick and choose when you want to work,’ she adds.

This article is for subscribers only