Regulator to 'tighten the screws' on agency spending

HSJ has learned NHSI has instructed trusts to apply new “robust internal controls” on temporary staff spending.

These new rules include:

• A reduction in the sign off limit for high cost agency and bank shifts from £120 to £100 per hour with immediate effect.
• Trusts to formally report all shifts signed off by chief executives above £100 per hour to NHS Improvement weekly from July.
• Executive director sign-off will be required for all agency shifts that are 50 per cent or more above the price cap but less than £100 an hour. These shifts will need to be reported weekly to NHSI.
• New reductions in agency costs for non-clinical admin staff
• All trusts to restrict use of admin agency staff and where possible purchase through bank arrangements.
• Trusts to target zero usage of off-framework administrative agency staff.

NHS Providers director of policy Saffron Cordery told HSJ it would be difficult to “tighten the screws even further” and said trusts must continue converting agency staff to bank posts.

Details of the changes were spelled out in a letter from Ian Dalton on 31 May sent to trust chief executives, finance directors, medical directors and nursing directors.

It said recent data from trusts had shown an increase in the volume of agency shifts purchased, but a slight decrease in the amount paid per shift.

NHS Improvement said it was vital this “reduction in unit cost is maintained and accelerated” and also “the volume of agency use is reduced in coming months”.

Controlling agency spend has been a national priority for NHS Improvement since 2015 when it introduced a nationwide cap on all agency spending, including nursing and medical workers, in November 2015.

Last month, NHSI data revealed trust spending on agency staff fell by more than £500m compared with the previous year. Trusts also overspent on bank staff by almost £1bn.

Ian Dalton’s letter said there was a “large opportunity” to further reduce costs in non-medical, non-clinical agency spend.

He added: “We will work with the highest spending trusts to ensure they implement further internal controls on agency administrative staff in ways we know have been successful.”

The regulator will also work “intensively” with eight of the highest spending trusts on agency staffing to address some of “the more deep-rooted issues” and “help facilitate savings”.

This further tightening on agency spend has been branded “brutal” by senior NHS figures.

One chief executive told HSJ anonymously that although the move is “right on principle”, it may on some occasions be “undeliverable in practice”, as their priority is to keep essential services fully staffed.

Saffron Cordery, director of policy and strategy at NHS Providers, told HSJ the national support given to providers to help reduce agency staff has been welcome and resulted in “good progress”.

However, Ms Cordery said it is going to be “really difficult if we want to tighten the screws even further”.

“We have got to continue doing what we can to make agency a less attractive option for trusts but also for people using them,” she said. “We have to make the alternatives better and transfer from agency to bank.”

“We need to be clear, it will get more challenging as we bring down the levels of [agency] pay,” Ms Cordery added.