Capping Agency Costs in the NHS: A vindictive act by Jeremy Hunt…

Posted: November 29, 2015 in Discussion, National Health Service, Politics, Uncategorized
Tags: , , , , , , , ,

The role of an agency has historically been to provide a source of labour to bridge short term vacancies, through sickness or maternity leave etc., within permanent establishment numbers.  Naturally, due to the nature of the short notice required to fill these vacancies, the cost to the Hospital, and the remuneration to the agency staff, is higher than a basic payment.  However, more so now-a-days, agency staff are found to be in post, in the same hospital, for years, enjoying higher rates of pay than their permanent colleagues; having to add here with less security and benefits.  But is this their fault; that agency staff can find themselves in such a position?  The answer is a resounding no.

There are reasons as to why agency staff, from all professions, find themselves in long term posts.  These reasons have remained unchanged over the years and include, but are not limited to:

  • High turn over of permanent staff – either out of health care completely, or on to the agency; tempted by the flexibility brought about through agency work.
  • Stagnation in the employment market – unless there are substantial benefits to moving, most staff remain at the same place of employment for considerable periods of time.
  • Inability to recruit experienced staff into permanent positions
  • Develop good working rapport with department – flexibility

On the 23rd November 2015 Monitor and the NHS Trust Development Authority (TDA) introduced price caps relating to the total amount Trusts can pay per hour, across all professional groups of agency staff.  The reason being that due to the existing pressures on health care budgets managing agency costs could allegedly save considerable sums.

Jeremy Hunt had indicated that such an action could save approximately £1 billion over a three year period.  A secondary, less publicised objective of the price caps being the eventual forced migration of agency staff  back in to permanent posts within the health service.

Introducing capping of the gross amount payable to an agency provider, thus in effect capping the remuneration of agency staff, at a time of year when people are at their most vulnerable, is a deliberate crass act by Jeremy Hunt.  Obviously a sanction timed with deliberate intention; reducing the potential risk of rebellion by the agency staff, withdrawing their labour.  Moreover, the timing of such an act would appear to be a deliberate attack on Junior Doctors in retaliation to their planned industrial action.

For clarity, the how and why of capping:

4. How have the proposed price caps been calculated?
4.1 The caps would determine the maximum total hourly rate trusts can pay an agency for an agency worker.  The cap would apply to the total charge and therefore would include:
 worker pay
 worker holiday pay
 employer national insurance
 employer pension contribution
 administration fee/agency charge
 any other fixed or variable fees or payments to the worker or agency or bank (e.g. travel, accommodation, finder’s fee, bonuses)

http://bit.ly/1LS1Nvo

1.10 The price caps are intended to support trusts when they procure from agencies and to encourage staff to return to permanent and bank working.  They should enable trusts to manage their workforce in a more sustainable way, reduce reliance and expenditure on agency staffing, raise quality and improve the working environment for their staff.

The effect of the capping for Band 5 and Band 6 on maximum AfC rate, most typical of Nursing and Operating Department Practitioners (ODP) can be seen here (on page 17).  An agency shift rate calculator can be found here.

This is not the first time there has been an attempt to address the high cost of agency expenditure, with the introduction of NHS Professionals.  An agency provider, owned by Government.  Professing to be the primary provider of healthcare professionals in the country, NHS Professionals does not appear to achieve the objective of having a positive impact on overall agency expenditure.

The continuing use of agency staff will inevitably remain a thorn in the side of NHS expenditure, as safe and effective health care provision is a catch twenty-two situation. The provision safe and effective health care is man power dependent.  If the provision of health care has to be pared-down to a minimal work-force in order to save money, to re-invest in other area’s, then the money saved will never reach those other areas: it will be needed to pay for mistakes made.  Invest in a work-force and whilst it will cost more to get the provision of health care right the first time, the savings made in the future will be rewarding and significant.

Effective work-force planning in health care, as with education is compounded by the lack of fluidity within the professions.  It is difficult to plan ahead for recruitment and retention in these areas and therefore there is, and will continue to be, a need for agency staff. And the capping of agency rates, to draw staff away from agencies into permanent positions is not the resolve.  It will only serve to move experienced health care professionals away from the NHS.

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Comments
  1. Isobel says:

    Depressing, but well said.

  2. Gary says:

    As an agency ODP due to there being no permanent work in my area,I agree with you one hundred per cent.these caps now mean that my guitar teacher is on more money an hour than I am!
    how can that be right?

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