Agency caps one year on: expenditure reduced by £600m, but spending is still too high

The NHS has reduced expenditure by over £600 million in the first year of measures to curb spending on agency staff.

The measures were brought in after the NHS spent over £3 billion on agency staff in 2014/15. Some trusts requested help negotiating with agencies and bringing staff back into the NHS. 

Almost three quarters of trusts (73%) have now successfully reduced their agency spend, and over half of these have reduced spend by more than a quarter.

However, despite monthly spend now being around 20% less than it was at the same time last year, the sector is still spending £250 million a month on agencies. 

We're now bringing in a new raft of measures to further reduce spending. These include:

  • the publication of league tables of agency spend on best and worst performing trusts
  • collecting anonymised information on the 20 highest earning agency staff, per trust, and of long-standing agency staff
  • additional reporting to NHS Improvement, including shifts that cost over £120 an hour
  • the intention to introduce an approval process for the appointment of any interim very senior managers who charge over £750 per day
  • ensuring trust boards have the right level of oversight of agency spend at their trust

We're calling for more trusts to improve how they manage their existing workforce to help encourage staff back to the NHS by allowing them to work more flexibly. Trusts have also been asked to stand up to the excessive rates being charged, particularly by medical agency staff who are able to negotiate their own individual fees; often at prices well above the cap.

Jim Mackey, Chief Executive of NHS Improvement, said:

“The NHS simply doesn’t have the money to keep forking out for hugely expensive agency staff. The progress we have made in a single year is really promising and trusts have responded well to the caps. They’ve worked hard to cut these bills and, in many cases, improved the way they manage their workforce. But there’s much more to be done, especially to reduce how much trusts pay for medical agency staff and bringing staff back into the NHS.

“Over a third of the agency bill is spent on medical agency fees, so we need to ensure agencies and doctors do their bit to make sure they’re not overcharging. With hospitals across England struggling with patient demand, trusts need all the support they can get and trying to cash in on the NHS just isn’t on.

“We need everybody to pile in, and patients deserve that effort from us to make sure they’re getting the right care, from the right staff, at the right time. We’re committed to making sure hospitals can spend their money on their care and not on excessive agency fees.”

Our analysis indicates that if the rate paid for each shift above the wage cap is reduced by just £10 per hour, the sector could save a further £102 million in a year. 

Agency caps: at a glance

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