NHS agency staff costs: treating the symptom not the cause

Candace Imison explores the Secretary of State for Health's recent campaign against agency staff costs and considers whether this approach might well be treating the symptom, but not the cause.

Blog post

Published: 09/06/2015

The NHS spent £3.35bn on agency staff in 2014/15; 31 per cent more than in 2013/14. Both Monitor and the Trust Development Authority, who regulate NHS hospitals, have linked escalating spend on agency staff to the deteriorating financial position in trusts. So the Secretary of State for Health won some politically welcome headlines last week as he went to war on agency costs, saying “it's time to crack down on rip-off NHS agencies”. The government’s plans include setting a maximum hourly rate for agency doctors and nurses; banning the use of agencies that are not on approved frameworks; and putting a cap on total agency staff spending for each NHS trust.

Many hospital trusts have also welcomed national action in this area, particularly trying to reduce the rates set by agencies. However, some have questioned whether the proposals will save the NHS money. There is a risk that these measures could ultimately drive up the cost of permanent staff and/or exacerbate the shortages of staff that are driving up costs in the first place. It is also unclear how "mechanisms" to override the individual trust limits in the interest of safety will work in practice.

This is even more relevant given the recent suspension of work on safe staffing levels by the National Institute for Health and Care Excellence. Is the government sending a message that trusts should now be focusing on cost rather than quality? The Francis Inquiry into the failings at the Mid-Staffordshire NHS Foundation Trust showed us how dangerous that can be. That is not to say that setting the right staffing levels is straightforward. However, while crude ratios have many difficulties, they create a line in the sand for trusts under huge financial pressure. A line that Mid Staffordshire crossed to the great detriment of patients.

The real problem - which government proposals completely fail to address - is that hospital trusts are finding it difficult to fill vacancies on a substantive basis and at the same time there has been an increase in the number of nursing posts required to meet activity pressures and the newly defined safe staffing levels.

What is particularly aggravating is that the shortage of nursing staff has been anticipated for some time. In 2012, the Royal College of Nursing said “workforce scenarios in NHS England strongly point to the likelihood of reduced supply of NHS nurses over the next five to 10 years". Modelling done by the Centre for Workforce Intelligence in 2013 suggested a shortfall of over 47,000 nurses by 2016. In 2014, a review of nurse supply by NHS Employers found that 83 per cent of organisations surveyed were experiencing problems recruiting nurses, and 44 per cent of those surveyed had over 50 full time equivalent (FTE) vacancies.

For 2015/16 the annual number of training places for nurses in England only increased by 989 (4.5 per cent) to just under 23,000. Yet nurse training courses are hugely over-subscribed. We are turning away people who could help solve our staffing problems. Given the numbers of nurses leaving due to retirement or other reasons, as well as those failing to complete their training, the current numbers mean we will barely stand still, even with return to practice initiatives. At the same time the restrictions on international recruitment, make it hard to fill the gap by this means, particularly from outside the EU. Amazingly, nurses are not on the shortage occupancy list.

This is not a sustainable position: tackling inflated agency costs - or worse still rowing back on safe staffing levels - merely treats the symptoms and not the underlying causes of the problem. Effectively addressing the growing agency bill will only be achieved if we can address the shortage in permanent staffing.

A version of this blog was first published by Public Finance. 

Suggested citation

Imison C (2015) ‘NHS agency staff costs: treating the symptom not the cause’. Nuffield Trust comment, 16 June 2015. https://www.nuffieldtrust.org.uk/news-item/nhs-agency-staff-costs-treating-the-symptom-not-the-cause