The Association of Professional Staffing Companies raised concerns about the impact on employers of the recent increase in National Insurance Contributions and the introduction of the Health and Social Care Levy in the UK.

APSCo's concerns were brought forward in a letter to Rishi Sunak, chancellor of the Exchequer, and Edward Argar, minister of state for health.

“A combination of rising inflationary pressures, increasing wages and skills shortages, has led to employers facing rapidly rising costs in salaries and benefits for their permanent hires and temporary workforce,” said Tania Bowers, global public policy director at APSCo. “We felt that an increase in employer costs would exacerbate this situation. The reality four months later is in fact more acute given the cost-of-living crisis and the long-term impacts of the Ukraine war.”

APSCo members in the healthcare sector, in particular, are affected, Bowers said.

“The price caps set by NHS England and Improvement have not increased to meet the employer NICs and frameworks including the Crown Commercial Service’s Workforce Alliance, are requiring recruitment companies to fund the increased Employer NICs from the supply chain,” she said.

Compliance and vetting is extraordinarily complex in the healthcare sectors and staffing firms employ disproportionately large compliance support teams to meet onboarding and other requirements, according to APSCo. These costs must come from staffing firms’ margins and are in addition to other costs such as digital right-to-work checks, training, interview and other costs.

“Unlike the private sector, where there is a valid argument that it is a commercial negotiation as to who should bear the burden of increased supply costs, our members have minimal negotiating power with trusts on framework,” Bowers said. “Given the inequality of bargaining power between the contractual parties, this makes the position taken by the frameworks at the very least unfair and arguably an abuse of their dominant position.”

APSCo urged the government to investigate the issue of increased employer costs.