News

Agency cap saves £600m, but ‘much more to be done’

The cap on agency spending has saved £600m in its first year, but more needs to be done to cut costs further, NHS Improvement has said.

The cap, introduced to curb inefficient spending on agencies, has led to 73% of trusts reducing their agency spending, 37% of them by more than a quarter.

However, NHS Improvement unveiled its new range of measures, such as league tables of the best and worst performing trusts, to further limit spending on agencies, which is still at £250m a month.

Other measures include:

• Collecting anonymised information on the 20 highest earning agency staff, per trust, and of long-standing agency staff;
• Additional reporting to NHS Improvement, including of shifts that cost over £120 an hour;
• The intention to introduce an approval process for the appointment of any interim very senior managers who charge over £750 per day; and
• Ensuring trust boards have the right level of oversight of agency spend at their trust.

Jim Mackey, CEO of NHS Improvement, said: “The NHS simply doesn’t have the money to keep forking out for hugely expensive agency staff. The progress we have made in a single year is really promising and trusts have responded well to the caps.

“They’ve worked hard to cut these bills and, in many cases, improved the way they manage their workforce. But there’s much more to be done, especially to reduce how much trusts pay for medical agency staff and bringing staff back into the NHS.”

Initial figures show that the cap did not apply to nearly three-quarters of shifts in the first 10 weeks after it was introduced.

NHS Improvement added that if the sector reduces its spending on agency staff above the wage cap by £10 an hour, it could save £102m a year. It will now examine medical and nursing shifts to explore what more can be done to bring down the costs of those shifts which are paid above the cap.

The Royal College of Midwives (RCM) also published a report ‘Agency, Bank and Overtime spending in maternity units in England in 2015’ which revealed that NHS organisations spent £25m on agency midwives last year, an increase from £18m in 2014. The cap came into force in November 2015.

In total, the NHS spent £72.7m on bank, agency and overtime midwives in 2015. According to the RCM, for the same cost, it could have employed 3,318 full-time midwives, almost enough to address the shortage of 3,500 midwives.

Jon Skewes director for policy, employment relations and communications at the RCM, said: “The findings of this report are deeply concerning and clearly reveal that many trusts within England are far too reliant on agency and bank midwives.

“This is an incredibly expensive and wasteful way to staff maternity units and it simply cannot continue. For over a decade now the RCM has warned that an over reliance on temporary staff will inevitably cost more in the long run.”

The RCM said NHS organisations should review their maternity staffing levels and fill any vacancies as a matter of urgency.

Paul Briddock, director of policy at the Healthcare Financial Management Association, said that despite the "positive progress" on agency spending, the NHS still needed to address the issue of excessive premium rates on staff, and the shortages in the NHS workforce.

“Although today’s news is very encouraging, the issue of agency staff costs will continue to be difficult to manage unless the NHS also redesigns services across wider geographical patches to provide a much more sustainable service for the future," he added.

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