Simon Stevens, chief executive of the National Health Services in England, said the health service will “clamp down on some of the staffing agencies ripping off the NHS.”
In an interview on BBC One's Andrew Marr Show, Stevens promised to tackle the high cost of agency spending, stating that NHS hospitals were “overspending" on temporary staffing.
The interview was broadcast the same day the findings of an investigation by The Telegraph newspaper showed revenue at 10 of Britain’s biggest medical recruiters rose by almost 40% over three years, with the companies posting overall takings of £7.7 billion since 2009.
The Telegraph showed photographs of the large houses in which the CEOs of healthcare staffing firms lived and highlighted that one of them drove an Aston Martin DB9 sports car.
Figures obtained by The Telegraph show Barts Health NHS Trust in London spent most heavily on agency staff, with an £81 million bill in 2014-15 while spending on agency staff by NHS foundation trusts — two-thirds of hospitals — rose by 64% over a two-year period. A recent regulator's report showe NHS foundation trusts in England spent £1.8 billion in 2014 on agency and contract staff — more than twice the planned amount.
Stevens said the increase could be partly attributed to hospitals putting more nurses on wards, following the public inquiry into the Stafford Hospital scandal. He added “what we’ve got to do is convert that [agency] spending into good, paying permanent jobs.” Though he admitted it was “very hard” for individual hospitals to take action against agencies, he said “collectively the NHS can take action here and we will be doing that.”
Dr. Peter Carter, chief executive of the Royal College of Nursing, agreed, arguing agencies are currently charging “top dollar.” However, he also pointed the finger of blame at the NHS itself, going on to say: “The reality is that because of very poor workforce planning and because of cuts, particularly in the number of new student nurses taken on, the NHS is now playing catch-up and to fill that vacuum agencies have stepped in,” said Carter.
In a riposte to Stevens’ accusations, Tom Hadley, director of policy at the Recruitment and Employment Confederation, said “poor workforce planning has left the NHS short of nurses, and although they are advertising they can’t find people willing to take on jobs as permanent employees. They then turn to agencies that can provide nurses at the last minute or on short to medium term contracts to ensure safe staffing levels are maintained.”
“What [Stevens] doesn’t mention is that many agency nurses have previously had long careers as NHS employees but because of pay freezes, poor management and inflexible schedules have decided it suits them better to seek work via agencies who can help them find shifts that fit round their family life and allow them to work where and when they choose.”
John Nurthen, executive director, global research, for Staffing Industry Analysts commented: “Simon Stevens seems surprisingly unaware of his own National Framework Agreements for the Supply of Nursing and Nursing Related Staff. NHS overspending on agency staff is entirely due to the organization’s own management failures and government under-investment in training much needed health professionals. If he has specific examples of agencies ripping off the NHS he should name them rather than scapegoating the wider staffing industry in this way.”
According to the NHS London Procurement Partnership website, the national framework “provides NHS customers and other public sector bodies with access to a wide range of suppliers who are able to provide nurses and nursing-related staff covering a wide range of specialisms. … Prices are competitive and the framework agreement has a transparent contract pricing mechanism. NHS trusts and other public sector bodies can release efficiency savings through negotiating service level agreements and benefitting from additional discounts for volume of business agreed with the appointed framework agencies.”
The REC’s Hadley added: “Pay will vary depending on experience and skill set but generally speaking a Band 5 agency nurse will earn £20-£25 per hour and an agency will charge a fee to the trust of between 10% to 20% to cover the costs of finding, vetting and supplying the skilled nurses they need.”
The largest provider of flexible workers to the NHS, NHS Professionals (which was omitted from The Telegraph article), is wholly owned by the Secretary of State for Health. NHS Professionals was founded in 2001 to manage temporary and flexible worker banks on behalf of NHS Trusts and they reported 36% growth in revenue in 2014 to £369.6 million while EBITDA grew 14% to £7.9 million. In their 2014 Annual Report, CEO Stephen Dangerfield remarked that: “… the gap between workforce supply and demand continues to grow. This increasing gap between unchecked demand for temporary workforce and real growth in bank-filled shifts has created a space in which expensive staffing agencies can thrive.” Despite their growth, NHS Professionals has failed to meet the increased staffing demands placed on the NHS and in 2014, it was rumored the Secretary of State for Health, Jeremy Hunt was planning to sell off the organization sometime in 2015. While a privatized NHS Professionals might become more efficient in sourcing healthcare professionals, it is difficult to envisage how this step would encourage lower staffing agency costs which the NHS wishes to achieve.
