NHS could free up £480m by limiting use of temporary staffing agencies

The NHS could free up £480m to reinvest into NHS services and improve patient care if trusts filled temporary vacancies with workers from a ‘staff bank’ instead of using expensive staffing agencies.

Temporary staff, such as doctors and nurses supplied by agencies, cost on average 20% more than those from the NHS’s own ‘staff banks’ despite doing the exact same job.

Bank staff tend to come from internal pools of workers who are already employees of the NHS trust and have agreed to work flexible shifts.

As bank staff generally work within the trust, their use increases the likelihood of a patient being treated by the same healthcare professional throughout their care.

The NHS has already managed to cut its spending on agency workers by £1.2bn, or a third, since we introduced a cap on the cost in 2015. Also, improvements to staff rostering and new options of flexible working hours for NHS staff have meant fewer staff feel the need to join agencies in the first place.

Last year (2017/18), spending on bank staff was higher than for agency for the first time in several years, leading to a £528m reduction in agency spend for the NHS.

But the NHS is still missing out on significant potential savings, which could be instead used to improve care for patients.

We are calling on all NHS trusts to take a ‘bank first’ approach to recruiting temporary staff, and only use agencies as a last resort.

We have set all trusts in England a target of reducing their agency costs by 17% for 2018/19.

‘Trusts have made fantastic progress in reducing spending on expensive private agency staff over the last three years. These savings mean more money for other vital NHS services and ensure every penny the NHS spends counts.

But there is further progress to be made. Bank staff cost the NHS less than agency staff and could improve a patient’s continuity of care. That is why we want trusts to take a bank first approach, and only use agency staff as a last resort.

Temporary agency workers play an important role in ensuring staffing numbers remain at a level that provides the best possible care for patients and gives them the opportunity to work flexibly. But an over-reliance on high cost private agencies when there are other options available is not good for patients or for the NHS’s finances.’

Ian Dalton, Chief Executive, NHS Improvement

‘Today’s announcement is welcome news. It is better for patients to have the continuity of care from existing staff picking up additional shifts, rather than using agency workers.

Not only is the patient experience improved, but moving away from relying on paying expensive agency staff also means that the NHS saves money. However, there is more to do and as part of our long-term plan for the NHS we are determined to make sure every penny of taxpayers’ money is invested effectively.’

Steve Barclay MP, Minister of State for the Department of Health and Social Care

The five most expensive locum doctors currently cost the NHS more than £2m per year. One agency has been charging up to £480 an hour for one consultant, and £200 for a further five – compared to £76.10 which is what the NHS would expect to pay if they came from the trusts’ own ‘banks’.

Over 150 locum doctors have been working at the same trust for over two years, with 14 doctors having worked at the same trust for over five years. Almost 340 nurses have been reported as having worked over two years at trusts.

The price cap means that NHS providers should not spend more than 55% above the basic rate for a staff member, taking into account ‘on costs’ such as pension and national insurance contributions. Any agency shift which costs more than £100 an hour must be signed off by the trust’s Chief Executive and be reported to us.

To help support trusts to increase their use of bank staff, we are working with the Department of Health and Social Care to pilot the use of app technology that makes it easier for bank workers across NHS trusts to directly sign up for shifts that work best for them.