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How is reducing agency spend saving the NHS £600m

Reducing agency spend in the NHS is saving moneyThe measures introduced by NHS Improvement (then Monitor) last November are clearly working, saving over £600m in its first year. How is the NHS going about reducing agency spend and where are the effects being felt?

The CEO of NHS Improvement, Jim Mackey, recently stated that: “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.”

73% of of NHS Trusts have reduced agency spending

Indeed, 73% of trusts have reduced their agency spending with over half of those curbing spend by 25%. Yet, there is still a fair way to go to reduce the monthly £250m spend. The cap forms part of a larger bid to tackle agency spend, which was over £3bn in 2014/15. The additional measures include:

  • the publication of league tables on best and worst performing trusts
  • collecting anonymised information on the 20 highest earning agency staff, per trust, and of long-standing agency staff
  • additional reporting to NHS Improvement, including shifts that cost over £120 an hour
  • demonstrating the intention to introduce an approval process for the appointment of any interim senior managers who charge over £750 per day
  • ensuring trust boards have the right level of oversight of agency spend

A spokesperson for NHS Improvement said that “Trusts have also been asked to stand up to the excessive rates being charged, particularly by medical agency staff who are able to negotiate their own individual fees; often at prices well above the cap.”

How could even more be saved?

Analysis has shown that a further £102 million could be saved if the rate paid above the wage cap is reduced by £10 per hour – for those earning a large amount this could be an easy change. Another report, “Agency, Bank and Overtime spending in maternity units in England in 2015’ published by The Royal College of Midwives (RCM) revealed that spend on agency midwives had risen to £25m – an increase of £7m since 2014.

The full midwife agency spend was £72.7m including agency, bank and overtime. “For the same cost 3,318 full-time midwives could have been employed solving the current midwife shortage in England.”

Still too reliant on bamk and agency staff?

RCM found the average spends per hour on agency staff was £41.25, with the highest monthly spend in December 2015 when spending peaked at £50.58 per hour.

“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,” said Jon Skewes, Director for Policy, Employment Relations and Communications at the RCM. “This is an incredibly expensive and wasteful way to staff maternity units and it simply cannot continue.”

Most agree that although a positive start, the NHS must look long-term to addressing gaps in the workforce. NHS Improvement issued a plea to trusts to ‘help encourage staff back to the NHS by allowing them to work more flexibly.’

To read about how eProcurement techology can help implement collaborative purchasing, data sharing and good procurement practice, download our paper Implementing the NHS eProcurement Strategy.

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