Regulators have said the new price caps for agency staff will bring ‘significant risks’ for patient safety and performance, especially for trusts with reputational problems.

  • New price caps for agency staff pose “significant risks” for patient safety, but “balance of clinical risks” supports taking action
  • Regulators expect compliance rate of just 70 per cent, with particular challenges in reducing reliance on locum doctors
  • Phased approach means savings likely to be less than £200m in 2015-16

In an impact assessment, Monitor and the NHS Trust Development Authority have also flagged up financial risks associated with the policy, warning that it could drive an overall increase in pay costs if trusts respond by increasing their use of overtime shifts.

Last week, the Department of Health announced plans to cap the hourly rate the NHS can pay agency staff at 55 per cent above the pay levels of permanent staff.

The impact assessment says that while “national level price caps may play a role in reducing the reliance and expenditure on agency and locum staff”, they come with “significant risks to patient safety and performance, which need to be managed, and risks that savings will be limited”.

It warns: “Price caps may reduce the supply of agency shifts, leading to staff shortages. This could lead to risks to patient safety and clinical quality, and to performance and patient access.

“This may be experienced more acutely in particular trusts or in particular specialties. The greatest difficulties are likely to be faced by challenged trusts, especially those formally in special measures and/or subject to [Care Quality Commission] compliance/enforcement actions related to staffing.

“Experience suggests that, particularly as a result of adverse reputational issues affecting their ability to recruit substantive staff, such trusts often rely on agency staff to maintain continuity of services, and that those agency staff have usually required a significant premium to take on such roles.”

The document says trusts in rural areas may also struggle, and warns of a potential “negative impact” on services which have long suffered from staff shortages and are “often the most pressured”, such as accident and emergency and intensive care units.

It says the risks are greater for locum doctors than other staff groups, due to the high premiums that have been paid. This will be mitigated by a higher starting cap for junior doctors - of 150 per cent higher than substantive pay, although this will also reduce to 55 per cent higher by April.

The document adds: “There is a further risk that costs may increase overall, if trusts respond to price caps by significantly increasing the wage rates of all staff, including substantive staff, potentially through increased use of overtime.”

However, the regulators conclude that “the balance of clinical risks supports taking action to tackle agency costs now and bring agency staff back into the regular workforce”, provided various mitigating actions are taken.

The impact assessment assumes a compliance rate of 70 per cent with the caps, which reflects the potential use of “break-glass” clauses, which allow trusts to breach the cap on grounds of clinical safety.

Under this compliance rate, the regulators estimate the caps would produce annual savings of £370m once the changes are fully implemented, with £110m saved on agency nurses, £210m on locum doctors and £40 on other agency workers such as allied health professionals and clerical staff.

However, due in part to the phased approach, savings in 2015-16 will be significantly lower. The impact assessment estimates that the caps the DH proposes to introduce in late November would save around £200m annually. Given that they are scheduled to come in more than half way through the financial year, 2015-16 savings are likely to be below this figure.

NHS providers recorded a deficit of £930m for the first three months of 2015-16, and experts have warned that forecasts of a £2bn overspend for the full financial year are “well founded”.

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