News

Three-quarters of trusts failing to comply with agency caps

Trusts failed to use the agency cap in nearly three-quarters of shifts for the first 10 weeks after it was introduced, a survey conducted by Liaison, which provides financial services to the NHS, has found.

A sample survey of 55 trusts found that of all shifts worked in the 10 weeks after the cap – designed to help reduce the NHS deficit – was introduced in November, 74% did not conform to the ceiling, leading to an overspend of £10.8m. This covered shifts across the four main staffing grades in the health service.

Since then, the missed savings have increased because the cap has increased but the amount of money actually paid has stayed fixed. For example, the capped rate for consultants decreased from £97 an hour to £76 between November 2015 and April 2016, but the average rate consultants are paid stayed at £105.

While the survey showed some initial progress in cutting pay and commission rates for locum staff, it highlighted how trusts across England are “currently enable to fully comply with the rate cap requirements”.

A 55% cap came into place on 1 April. If trusts achieve 70% compliance, this could save £191m, but this doesn’t seem likely given the existing performance rate.

And based on spend on the four largest staffing grades in Liaison’s sample, it is expected that the NHS could still have to dish out another £764m in agency costs this financial year.

Andrew Armitage, Liaison’s managing director, said: “Our report goes some way to quantifying the impact that the agency pay cap is having on the NHS. We are able to benchmark the position the NHS was in before the caps came into place and then quantify their actual and potential impact on a periodic basis. That way, we can advise the NHS on how successful the policy has been and where some trusts are performing better than others and why.

“Although the figures indicate a step in the right direction for the NHS, there is still some way to go. We are beginning to see more locums joining their trust’s bank. In areas where there is a shortage of locums, some are refusing to accept the new rates and this is putting the trusts and their agencies under pressure to not only keep within the rates, but to source suitable locums in the first place.”

Demand for temporary staff was higher in healthcare than any other sector in March, and healthcare leaders, including NHS England’s chief executive Simon Stevens, admitted in January that agency spend was the biggest driver behind the NHS deficit.

The Public Accounts Committee also warned last month that the NHS urgently needs to get value for money on agency spending.

James Foxlee, co-founder of Circular Wave, wrote for the most recent edition of NHE about how technology can be used to reduce agency spending.