As a direct result of increased frontline pressure, NHS hospital spending on temporary agency staff is expected to climb, according to a report by healthcare market analysts Laing and Buisson. The report estimates that the dependency of the health services on expensive agency staff cost the taxpayer more than £2.1 billion in 2012.

The report also reveals that spending on agency staff by NHS hospitals and community services rose by +42% in real terms over the five years between 2008 and 2012. According to the analysis, this was driven by a sharp rise in dependency on overseas staff in the last three years of the Labour government, due to substantive staffing shortages as the NHS sought to achieve to targets.

The report stated that the coalition government had restricted agency use as part of its NHS efficiency drive, which included a demand to reduce agency spending by £300 million. NHS agency spend fell by -10% in 2010/11 and by -16% 2011/12, although it still accounted for 4% of total health service spending. Nursing staff accounted for almost a quarter of total agency spend during 2011/12.

The Laing and Buisson report predicts that figures for 2012/13, ending 30 March 2013, would show an increase that was likely to have continued into the present financial year. Their investigation in March was based on Freedom of Information Act requests from 100 acute trusts. It found payments for agency and bank staff were likely to be +20% higher in 2012-13 than in 2011-12.

The expected increase, Lang & Buisson said, was being driven by heightened pressures on frontline services, which separate evidence shows are now reaching record levels. These pressures will be exacerbated by growing shortages in nursing, the report warned.

Report author and economist Philip Blackburn said: “Pressures on the system are likely to encourage greater use of flexible staffing resources to offer short-term solutions, providing there is necessary funding to meet these demands.”

In February Nursing Times revealed there could be 47,545 fewer nurses than the NHS needed by 2016, based on estimates from the Centre for Workforce Intelligence, an independent agency set up to advise the government.

Peter Carter, chief executive and general secretary of the Royal College of Nursing, said: “Agency nurses provide a vital service in the NHS, covering unplanned absences at short notice. They should not be used as a solution to short-sighted, boom and bust workforce planning.”

“This [report] is a clear example of short-term cuts to staffing levels actually proving more expensive in the long run, as hospitals are forced to use expensive agency staff to fill gaps in their workforce that they created,” he added, calling for a longer term approach to workforce planning to ensure enough nurses were trained to cope with demand now, and in future years.

The Laing and Buisson report highlighted “cyclical” trends in agency spending, with peaks and troughs over the past 25 years depending on the growth of NHS budgets, the wider economy and level of directly employed staff.

There also appeared to be a north-south divide in agency spending levels. London and the surrounding Home Counties dominated the market with 45% of all agency spend in 2011-12, compared to other parts of the UK.

Jacqui Skinner, interim managing director of HCL Nursing, which supplies agency staff to the NHS said: “We cannot emphasise enough the critical importance of agency staffing to the NHS. We believe this staff group is an essential part of the solution to the impending nursing crisis facing the UK.”

She said: “We are constantly investing in our nurses to maintain the highest levels of customer service, compliance and in-depth quality management. As a minimum requirement, we ensure every one of our candidates is fully vetted as outlined within the NHS Employers standards for the recruitment of healthcare workers.”