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Government clamps down on ‘rip-off’ agency staff

Staff cuts of the past is root cause, says RCN

Jo Carlowe

Tuesday, 02 June 2015

New financial controls are to be introduced to clampdown on ‘rip-off’ agencies charging the NHS extortionate rates. 

Health Secretary Jeremy Hunt has today announced a package of measures to curb spending on agency staff and to cap payments to management consultants. 

The new rules will: 

  • set a maximum hourly rate for agency doctors and nurses
  • ban the use of agencies that are not on approved frameworks
  • put a defined cap on total agency staff spending for each NHS trust in financial difficulty
  • require specific approval for any expensive consultancy contracts over £50,000

Use of agency staff has risen from £1.8 billion to £3.3 billion in three years to help correct historic understaffing on wards and some agencies are charging up to £3500 an hour for doctors, the health secretary states.

He added: “Expensive staffing agencies are quite simply ripping off the NHS. It’s outrageous that taxpayers are being taken for a ride by companies charging up to £3500 a shift for a doctor. The NHS is bigger than all of these companies, so we'll use that bargaining power to drive down rates and beat them at their own game."

Initially the cap on total agency staff spending will apply to nursing staff, but will be extended to other clinical, medical and management/administrative staff. Capped rates will be reduced from the initially set level over time. 

Mr Hunt’s comments, follow those of Sir Simon Stevens, chief executive of NHS England, who this week on BBC One’s Andrew Marr Show, spoke of the need for hospitals to offer nursing staff ‘flexible employment’, adding that agency spending should be converted into “good, paying permanent jobs”. 

The new rules will be introduced later next week. 

The measures will also tackle spending on consultancy, which cost the NHS nearly £600m last year. An immediate cap of £50,000 will be applied to all management consultancy contracts. Trusts which need to break this cap for clinical reasons will have to get permission from their regulator, Monitor or the Trust Development Authority. 

In addition, there will be changes in procurement. Hospitals currently negotiate prices for supplies individually but under the changes the NHS will collectively negotiate with suppliers. 

Responding to the announcement, Danny Mortimer, chief executive of the NHS Employers organisation, said: “We welcome this focus on the agency market.”

However, he added: “Patient safety is our absolute priority and it’s important to remember that agency staff are useful for ensuring continuity and quality of care. In controlled, smaller numbers agency and bank staff will have a long-term future helping the NHS respond to fluctuations in demand.

“There is potential for NHS trusts to reduce spend on agency workers through further improvements in flexible working, technology and arrangements with local agencies.

“In the short-term NHS trusts will sometimes need to recruit permanent staff from other countries. This is a responsible approach to recruitment and will need continued support from the Government and other bodies.”

Dr Peter Carter, Chief Executive & General Secretary of the Royal College of Nursing (RCN) said: “The NHS can’t continue spending so much money on short-term staffing solutions so it is right to focus on getting better value for money, and to improving the continuity of care, which is better for patients. It is encouraging to see a concerted effort to tackle this long-standing problem from both Simon Stevens and now the Department of Health.”

But he added that a lack of investment in nurse training had led to the situation.

“The health service needs to focus on the root cause of this problem, not just the symptoms. A lack of investment in nurse training and cuts to nurse numbers mean that trusts now have no choice but to pay over the odds for agency staff and recruiting overseas.”

And he called for more details:

“Further detail on these plans is needed to answer questions such as how a maximum rate will be set and whether it will vary based on location and experience. Patient safety must always come first, so any plans for a cap on spending must ensure that it does not prevent trusts from providing safe staffing levels when there are no alternatives.”

He added: “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.   

“It is right to clamp down on excessive spending but this will only work alongside longer-term solutions, like converting agency staff to permanent staff, and continuing to increase training places to catch up with demand.

“The NHS will only cope with the unprecedented demand it is under by investing in long-term workforce solutions, making sure it retains its existing experienced staff and avoiding the ill-advised staffing cuts of the past.”

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