Capping, bank conversion and collaboration key to tackling agency spend

Source: NHE Jan/Feb 16

Stephen Dangerfield, chief executive of NHS Professionals, discusses how trusts are responding to the recently introduced agency price caps.

Price caps for agency staff in the NHS came into effect in November last year and trusts are already responding positively and proactively, according to the head of NHS Professionals (NHSP). 

Stephen Dangerfield, chief executive of NHSP, the NHS’s in-house solution to temporary workforce management, told NHE the caps were a “hugely positive” step, as something “significant” was needed in the marketplace to bring supply and demand back under control. 

As most NHE readers know, the Department of Health’s (DH’s) measures to limit agency spend across all NHS trusts, including FTs, have three core pillars: 

  • Mandatory compliance with agreed procurement frameworks
  • Capped rates for agency use
  • Capped overall spend proportion 

At the start of 2016, the new health regulator, NHS Improvement, said the new measures will save up to £160m by the end of the year, and £1bn from the agency staffing bill by 2018. But Dangerfield believes the price caps – if implemented correctly – along with encouraging more people to come back to the NHS bank could lead to even larger savings: potentially double. 

The DH noted that last year hospitals spent £4bn on agency staff. And an NHE investigation highlighted that nearly 70% of NHS trusts and FTs spent at least double what they had budgeted on agency. 

Since 2012, NHSP, which works with more than 60 NHS acute and mental health trusts across England, supplying a growing registered bank workforce of nurses, doctors, and other healthcare professionals, as well as administration and clerical staff, has also tracked a “steady increase” in agency usage among the majority of its clients. 

In its autumn 2015 ‘National Trends’ report, NHSP also revealed that between October 2013 and September 2015, demand for nursing in England increased by 35% in acute and 38% in community and mental health trusts. This has led to greater use of staffing agencies to meet the shortfall of available bank staff. And the “general scarcity” of registered nursing staff has also led to increased competition between trusts for resources and a consequent increase in agency rates for available nurses. 

Framework discussions 

Dangerfield said that since the price caps came into effect, NHSP has been receiving direct feedback from many clients about what support they need from his organisation. 

“And, certainly, we’ve been able to help all our trusts by giving them all the data and information around their agency activity, where it is occurring, the rates they are paying, and which agencies they are using. Off the back of that we have seen – even though it is early days – a lot of movement by trusts,” he said. 

“All our trusts have been through the agencies they use to determine if they are framework or non-framework. We have then been working with them to remove those non-framework [agencies] from our cascades for shifts.” 

There has been “quite substantial” progress on removing non-framework activity from framework agencies. 

Since the introduction of the agency cap, NHSP has also been highlighting where expensive staffing agencies are being used and, where possible, plugging those gaps with bank workers at a reduced cost for the NHS. 

“Most of our trusts have looked at their whole agency activity,” said Dangerfield. “A lot of them have certainly met with the agencies around the capping. Direct conversations have been had with non-framework agencies with a view to them stopping supply to the trust or getting themselves onto a framework and complying. 

“And in early January we’ve seen some quite significant movements where agencies have been removed from the agency cascades and either new ones have come in or we have started to see some bank conversion coming through.” 

Love the NHS 

Dangerfield reiterated that a “huge piece” of the puzzle when tackling the agency staffing problem is what is known as bank conversion, an issue NHE has focused on in the past. 

Asked what efforts are being made to make the bank look more attractive, he said: “It will be a combination of effort by us and the trusts. Some of the key things that will bring them [agency staff] back is if they actually can’t get the shifts through the agencies – then the route is to get them on bank or permanent employment. 

“That is a factor for people because, at the moment, they are pretty much guaranteed shifts from agencies. Suddenly, if that dries up, that will be a first detractor. 

“The second element is that we are putting some incentives in place. A number of trusts have got a ‘welcome back to bank’ incentive and some improved pay rates.” 

He added that the vast majority of people working for agencies are NHS-employed “in some manner”. And NHSP is running a campaign, throughout January and February, to encourage people back to the bank. 

“It is effectively a concept of ‘Love the NHS’. With the goal of all our trusts supporting that, the management supporting that, and wearing the badge, and encouraging agency workers to come back to the bank or permanent employment,” said Dangerfield. 

“I think we are going to see a lot of activity over the next few months, especially as the next levels of cap kick-in in February and April.” 

Next capping levels 

The maximum total hourly rate that trusts may pay for an agency worker will be reduced further on 1 February 2016 and 1 April 2016. This means that from April all staff groups – doctors, nurses and all other clinical and non-clinical staff – can only be paid 55% above basic substantive hourly rates. 

However, the price cap rules stated that the new figures only represent the maximum that trusts can pay and “should not be interpreted as standard or default rates”. 

“Trusts will want to, and should, continue to secure the majority of agency staff at rates below the price cap,” the rules add. 

The rules include a ‘break glass’ provision for trusts that need to override the caps on exceptional safety grounds. But these should be used only after all possible alternative strategies have been explored and only for patient safety reasons. 

But are trusts getting enough support? Dangerfield said: “The general feedback is that trusts are getting the support they want. They know it is tough and they have to manage the risk associated with it, but there is some good guidance coming out and Monitor is pretty open in being able to talk to trusts and for trusts to contact them.” 


One way trusts can gain favourable rates for agency staff is through collaboration. “As a result of agency capping, and working with us, a number of trusts in individual regions are starting to come together,” Dangerfield said. “And that is, again, where we can support them and that activity in managing their relationships with the agencies and help drive down the agency rates.” 

This type of work is not new for NHSP. Back in 2012 the organisation developed the Agency Partner Programme (APP) concept to help NHS trusts manage their agency expenditure by working with a small set of approved staffing agencies at agreed rates. 

In the north west, a consortium of five NHSP foundation trust clients – Central Manchester University, Stockport, Salford Royal, University Hospitals of South Manchester and Tameside Hospital– adopted the programme (more on this over the page). 

Working with NHSP, the trusts provided data on rates and hours worked by a variety of agency staff in bands 2 to 5. For the initial programme, it covered general nursing roles only, excluding all critical care. 

To compare the savings generated, four groups of trusts, including other NHSP clients, were established as controls. This comparison showed that hourly rates in the APP consortium were between £5.66 and £11.12 lower than the average rates charged across the control groups. It also led to savings of between £3.5m and £5m. 

“The APP is a great programme as it brings us and the trusts together in collaboration in regional areas,” said Dangerfield. “But it was the forerunner of agency capping, effectively. 

“It is a natural part of what we are doing. But what we are starting to see is non-NHSP clients and NHSP clients in regions coming together. That is where we are starting to support some of these collaborations to make it happen. 

“I think collaboration is so powerful where they (trusts) get together. And if you can control that whole region, understand what is going on with the staffing across that region, then that is a really powerful tool. And I think that will happen more and more.”

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