Agency staff 3/3: War on agency staff spending

March 17, 2017 • Reading time 2 minutes

One year ago, NHS Improvement declared war on agency staff spending and introduced price caps.

Here is my original blog on the proposal – in summary: I did not think they would work or be effective. It generated a lot of interest, mainly from people directly affected by the proposed caps.

One year on: NHS Improvement claims the caps have bought down spend by £600m, but say there is more to do to reduce spending.

1. Counterfactual and full analysis

It is a bit simplistic to simply take spend last year and compare it to spend this year (what if we had a particularly mild winter?).

Has the cap driven the impact (i.e. a lower price for staff), or has there been a fall in the number of staff? Having seen the challenges of running a safe and sustainable ward, I am not sure how I feel about under staffing.

2. Broader financial situation

It may be great news that spending on agency staff has gone down, but the narrow focus misses the fact that provider deficits have increased.

Either there is a lot more to go at on agency spending (seems to be the tone of the NHS Improvement press release), or agency spend is not as important as implied.

3. Productivity impact

Referral to treatment times have been going up. The standard for an elective operation is 18 weeks, although many hospitals have been failing this in recent months.

One of the blockers to having an operation is a lack of nursing staff in hospital operating theatres. Without enough qualified staff, the theatre cannot go on. So operations are not scheduled or cancelled at the last minute.

It would be good to see more data published on agency spending to get under the skin of what is actually happening (“is anything unexpected happening?”). And it would be good to spend more time investigating the effect. But perhaps two bits of anecdotal feedback contain some food for thought:

  • A conversation with a senior executive in an agency: “cap, what cap… our business has grown since the cap was introduced”.
  • The hiring of agency staff (when previously there were none) at a well-run hospital to help address their RTT challenges.


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