NHS organisations across England could face almost £1 billion in additional annual costs under proposed changes to employment law aimed at reforming zero-hours contracts, according to new analysis from NHS Employers.
The warning comes as the government consults on regulations linked to the Employment Rights Act following Labour's 2024 manifesto commitment to tackle what it described as "exploitative" zero-hours working arrangements.
The proposed reforms would give workers on zero-hours and low-hours contracts new rights, including guaranteed-hours contracts based on their regular working patterns, greater notice of shifts and compensation for shifts cancelled or changed at short notice.
While most NHS staff are employed on permanent contracts, trusts rely heavily on internal staff banks to fill temporary shifts, often at very short notice, to maintain safe staffing levels during periods of sickness absence, seasonal demand and emergency incidents.
NHS Employers argues that NHS staff bank arrangements differ significantly from the employment practices the government is seeking to address. The organisation says NHS banks offer flexibility for both employers and workers, enabling healthcare professionals to decide when and where they work while helping services maintain 24-hour patient care.
According to NHS Employers, around 85 per cent of NHS bank workers already hold a substantive NHS contract and choose to take on additional work through trust staff banks. Survey data also suggests many bank-only workers value the current system, with 74 per cent stating they can work the shifts and hours they want.
The organisation is concerned that the proposed legislation could create substantial administrative and operational challenges at a time when NHS organisations are being asked to improve productivity, reduce spending and absorb other financial pressures.
Although the full impact remains uncertain because consultation proposals are still being developed, NHS Employers estimates implementation could require more than 800 additional administrative staff and around 610 whole-time equivalent managers across the NHS in England.
These resources would be needed to support workforce monitoring, compliance requirements, workforce planning and payroll administration.
When combined with compensation payments for cancelled shifts and upgrades to workforce and digital systems, NHS Employers estimates the changes could lead to approximately £900 million in recurring annual costs.
The organisation also fears the reforms could make bank working less attractive, reducing workforce availability and increasing NHS reliance on costlier agency staffing.
As part of its response to the government's consultation, NHS Employers has proposed several changes aimed at protecting workforce flexibility while supporting the overall objectives of employment reform.
Suggested measures include exempting NHS employees who undertake additional bank work from the guaranteed-hours provisions, allowing workers to opt out of guaranteed-hours offers if they prefer existing flexible arrangements, and creating exemptions for emergency staffing requirements, sickness cover, annual leave and seasonal pressures.
NHS Employers has also called for the removal of additional compensation requirements for shifts cancelled at short notice where those cancellations are necessary to manage operational healthcare demands.
Ben Morrin, Chief Executive of NHS Employers, said:
“We support the government's ambition to tackle exploitative employment practices, improve income security for workers and end one-sided flexibility. These are important objectives that can improve people's health, wellbeing and financial security.
“However, the current proposals risk creating significant unintended consequences for the NHS. They could reduce the flexibility that many bank workers actively value, increase bureaucracy and generate substantial unbudgeted costs at a time when the NHS is focused on improving productivity and delivering better value for taxpayers.
“The government’s current proposals do not adequately reflect the operational realities of delivering healthcare services 24 hours a day, seven days a week. Flexible staffing arrangements play a vital role in maintaining safe care, responding to fluctuating demand and reducing reliance on more expensive agency workers.
“The NHS has worked hard to improve the experience of colleagues who choose to undertake temporary work and has successfully expanded the use of staff banks to support patient care. We are keen to work with government and trade unions to explore further improvements for bank staff.
“Before introducing regulations that could impose substantial additional costs without clear benefits for NHS staff or patients, it is clear the government should pause implementation and undertake further engagement with health and social care employers.”
NHS Employers is now calling on ministers to pause implementation of the proposed reforms and undertake a full impact assessment covering financial costs, productivity implications and equality considerations across health and social care.
The organisation says further engagement with NHS employers and workforce representatives is essential to ensure any new regulations balance employment protections with the flexibility required to deliver safe and effective patient care.
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