NHS finance chiefs doubt agency staff cap will save money

16 Jul 15

Spending controls being introduced in the NHS, including restrictions on the use of agency workers, are unlikely to result in savings, health service finance directors have warned.

The latest quarterly monitoring report from The King’s Fund found that more than 60% of NHS trust finance directors polled say controls on agency spending announced in June would not significantly reduce the amount spent.

Health secretary Jeremy Hunt announced that a maximum hourly rate will apply to payments from all NHS bodies to agencies providing doctors and nurses, while use of firms not on approved NHS procurement frameworks would be banned.

In addition, hospital trusts deemed to be in financial difficulty will be given a cap on agency staff spending, while all consultancy contracts over £50,000 will need to be approved centrally.

However, the King’s Fund found that only one in ten trusts surveyed thought the controls would lead to savings.

Although the survey found three-quarters of trusts intend to recruit more permanent nurses in the next six months, a third of trusts plan to reduce the number of permanent staff overall, with non-clinical posts expected to be cut.

John Appleby, chief economist at the King's Fund, said it was already clear that 2015/16 was the most challenging year for NHS providers this century, with two-thirds (66%) of NHS trusts, including 89% of hospital trusts, forecasting a deficit.

“There are considerable opportunities to make productivity improvements, but continuing to rely on top-down policy levers such as limiting staff pay increases and capping agency fees will not be sufficient,” he observed.

“The most promising opportunities lie in changing clinical practice to deliver better outcomes at lower cost, something that can only be achieved by engaging NHS staff in a new mission to deliver better value.”

The poll also found that around 40% of trust finance directors and 30% of clinical commissioning group finance leads are concerned about achieving their targets for productivity improvements this year. 

The report was published as Hunt reiterated the government’s plans for a seven-day NHS. He said he would make the health service an offer of fewer centrally mandated targets in return for more transparency.

The “litmus test” of this approach would be the implementation of seven-day care across the health service.

Hunt urged doctors to accept new contract terms to assist reforms or he would impose changes later this year.

“This is not about increasing the total number of hours worked every week by any individual doctor. Doctors already work extremely hard, and their hours should always be within safe limits,” he said.

“But we will reform the consultant contract to remove the opt-out from weekend working for newly qualified hospital doctors. No doctors currently in service will be forced to move onto the new contracts, although we will end extortionate off-contract payments for those who continue to exercise their weekend opt-out."

He said there would now be a six-week consultation with the British Medical Association about a new deal ahead of a decision in September.

“But be in no doubt: if we can’t negotiate, we are ready to impose a new contract,” he added.

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