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Mackey hails ‘tremendous’ effort as trusts slash £1bn off agency staff bill

Major agency controls across the health service have so far succeeded in saving £1bn since they were introduced in October 2015, latest NHS Improvement (NHSI) figures show – but spending for locums remains excessively high, with the five most expensive locums costing over the NHS over £5m.

The regulator argued the latest figures are a testament to the “outstanding efforts” of trusts to reduce their agency expenditure, which had been steadily growing at 25% a year prior to controls being rolled out.

This picture has now largely changed, with almost 80% of trusts having been able to cut down on their agency spend since last year. Over half of them (95 trusts, or 40% of the total) have slashed this spending by more than a quarter.

Sample data also shows 18% reduction in nursing agency prices and a 13% drop in medical locum staff prices from October 2015 until now.

The latest figures build on similarly successful findings in NHSI’s report from October last year, at which point £600m had been saved since the same month in 2015. At the time, 37% of all trusts had reduced spending by more than a quarter, while 73% of them had reduced agency spending overall.

The regulator’s chief executive, Jim Mackey, hailed trusts’ “tremendous efforts” to save money and was pleased to announce that the extra £1bn saved would be “pumped back into improving services for patients”.

But despite today’s good news, NHSI argued once again that “there still much to do in this area”. Overall spend on medical locums is still expected to be around £1.1bn each year, and evidence shows there are “still very high prices paid in places for these locums”.

The top five paid locums cost the NHS over £5m, and £300m could be saved per year if all medical locums charged rates within the set price cap.

“We expect these new measures to take another big chunk out of excessive agency costs; there are far too many agency staff making the most out of the lower tax rates paid via personal service companies and limited liability partnerships. This is a key part of the problem of so many staff choosing to work as agency staff instead of NHS staff,” added Mackey.

“These new rules will make sure most agency staff get paid and taxed in the same way as their NHS staff colleagues. This will make it fairer and more attractive for people to become permanent NHS staff, which is great news for hospitals and patients.”

Although health secretary Jeremy Hunt has promised the NHS is “turning the tide” on agency spend, this issue has long been perceived as one of the major cash leaks in the health service. Early in 2016, NHS England boss Simon Stevens had revealed the NHS was on track to hit a massive £4bn temporary staff bill that financial year.

But despite the desire to cut down on expensive agency staff, some influential think tanks have argued that they are nevertheless necessary given the significant mismatches between funding and staffing levels in the health service.