Agency controls: expenditure reduced by £1 billion and new measures

NHS trusts have gone to great lengths to reduce agency expenditure but more needs to be done to tackle spending on expensive medical locums.

Latest figures show that our agency controls have reduced expenditure by £1 billion since they were introduced in October 2015.

Outstanding effort from trusts

This milestone recognises the outstanding efforts of trusts in reducing their agency expenditure, which prior to the introduction of controls, had been growing at 25% a year for the last two years.

77% of trusts have been able to reduce their agency spending since last year. Over half of these (95 trusts; 40% of the total) have reduced their spend by more than a quarter.

Sample data shows 18% reduction in nursing agency prices and 13% reduction in medical agency staff prices from October 2015 to present.

New measures to tackle spending on medical locums

However, there is still much to do in this area. Overall spend on medical locums is expected to be around £1.1 billion nationally.

Our evidence shows there are still very high prices paid in places for these locums.

The top 5 paid locums cost the NHS over £5 million, and £300 million per year could be saved if all medical locums charged rates within the set price cap.

These latest figures show the tremendous effort trusts have made to save money through our agency controls, and we’re really pleased we can say the NHS has an extra £1 billion this year to pump back into improving services for patients.

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 limited liability partnerships. 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.

Jim Mackey, NHS Improvement’s Chief Executive

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