• Trusts will no longer be allowed to employ other trusts’ medics as locums through an agency, and register on the trust’s staff bank instead
  • More than 100 locums earn more than £200k a year, Jim Mackey letter reveals
  • £300m spent on locums above the cap set last year.
  • Significant administrative burden for trusts as trusts are banned from paying locums through personal service companies
  • Trusts may have to publish rates of agency staff earning more than £150,000 a year

“Around one hundred” locum staff are earning ”in excess of £200k per year from NHS agency work” according to NHS Improvement chief executive Jim Mackey.

In a letter sent to trusts by Mr Mackey he also reveals that another 400 individuals were “earning in excess of of £150k per year, whole-time equivalent”.

Almost a fifth of the national medical locum spend is incurred in A&E.

In a subsequent release NHS Improvement said the top five locums cost the NHS more than £2m last year.

Mr Mackey said trusts had made progress in reducing agency spend from £3.7bn in 2015-16 to roughly £3bn this financial year but admits that most of this has been in reducing the spend on nursing.

In his letter and an appendix Mr Mackey sets out a range of measures aimed at curbing the spend on agency doctors.

These include:

  • Banning trusts from employing agency workers who hold substantive roles at other trusts from April. These staff will have to be employed through the trust’s staff bank instead.
  • ”A significant reduction in the use of personal service companies from April 1” - these are often used to reduce an agency worker’s tax bill.
  • A national target to reduce medical agency spend by £150m in 2017-18.
  • Each trust will be required to agree an improvement target on medical locum spending with NHS Improvement for 2017/18

Mr Mackey said: ”NHS Improvement continues to identify significant differences in the rates paid by providers in the same local workforce market, particularly around escalation rates (‘break-glass’ rates). Therefore, the NHSI agency intelligence team will be working with you to make the rates paid more transparent and agree local escalation rates that all trusts locally should support and stand firm on.”

The measures will apply to trusts which are subject to agency rules, whicn includes all NHS trusts and foundation trusts receiving interim support or in breach of their license.

A cap on the hourly rate for agency staff was introduced last year.

The appendix said further measures could be introduced soon. It said ”Greater transparency is needed around the pay of locum staff earning in excess of £150k. We will give more details of proposed actions in coming weeks, but as part of this we may ask providers to publish rates paid to high-earning locums; similar transparency measures already exist in government, where the names and pay-bandings of civil servants and senior officials earning £150k and above are published.”

In a statement released later by NHS Improvement Mr Mackey said: ”We expect these new measures to take another big chunk out of excessive agency costs; there are far too many agency staff making the most out of the lower tax rates paid via personal service companies and LLPs. This is a key part of the problem of so many staff choosing to work as agency staff instead of NHS staff.

”These new rules will make sure most agency staff get paid and taxed in the same way as their NHS staff colleagues. This will make it fairer and more attractive for people to become permanent NHS staff, which is great news for hospitals and patients.”

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