The NHS is facing a bill of at least 100m as employment agencies seek to exploit nursing shortages and the new European working time directive to drive up the costs of hiring agency staff.

The regulations, which came into force on 1 October, entitle part-time workers to up to three weeks' annual holiday. Agencies have passed on the cost to the NHS by pushing up prices by an average of 6 per cent.

One agency, Thornbury Nursing Services, has written to other independent nursing agencies urging them to 'Push up your pay rates and your charge rates too.'

It adds: 'Given the current nurse shortages nationally and the new legal requirement to introduce paid annual leave for every UK worker, there is an opportunity here for us all, agencies and nurses alike.'

The size of the bill throws into sharp relief how much the health service relies on agencies to supply enough nurses to keep the NHS going. It also demonstrates how difficult it is for trusts to recruit nurses to full- time jobs.

Trusts are reacting angrily to the increases being imposed by

agencies. An internal memo written by a trust human resources director, which has been seen by HSJ, states: 'There is no case for the indecent and unilateral increases now being imposed.'

A teaching hospital HR director, who did not want to be named, told HSJ that the extra money would have to come from front line care.

'The bill is going to be big. Here it's going to be 500,000.

'That is a significant cost increase for which the NHS has no provision.'

Attacking the increases as 'exploitative', he said: 'It is not that there won't be some increases, but the level being proposed is outwith that likely to flow from the directive.'

He added: 'I think that if the NHS takes a strong line on this then we could certainly resist the level of increase being put through... With concerted action we could ratchet down the increase by at least half.'

Most agencies appear to have decided that 6 per cent increase on charges will cover the expected extra costs of the regulations, although there are reports of prices being raised 8 per cent and 11 per cent.

But Angel International, a London-based agency, has restricted rises to 3.9 per cent calculating it will 'break even' on this figure. Its executive chair, Janet Crawford, said it had costed the directive in detail and did not intend to profit from it.

Trusts are concerned that some agencies have built into their costings the assumption that all agency nurses will qualify for the full three weeks' entitlement. But few will achieve that.

There are also concerns that some unscrupulous agencies will seek to interpret the regulations to allow them to pass on to nurses a minimum amount of holiday pay.

The working time regulations include a limit of 48 hours that a worker can be required to work per week, and three weeks' annual paid leave, rising to four in November 1999. Doctors are not covered by the regulations.

See Comment, page 19.

RCN shows jobs crisis A 'snapshot' survey of 55 general medical wards in trusts throughout the UK found 71 per cent had nursing staff vacancies, the Royal College of Nursing disclosed this week.

Nearly one in five D-grade posts were vacant, and 96 per cent of nurses in charge of wards said their patients were occasionally put at risk by staffing shortages.