NHS could save £191m a year on locums, pay rates analysis finds

By The Press Association14th April 2016News EnglandNews England, NHS, Pay, Pay and Conditions, Recruitment / Retention, Workforce

Trusts could make savings of £191 million per year in spending on locums across the four main staffing grades, as new figures show the impact of the fresh cap on pay rates for NHS agency workers.

In the ten weeks from when the rate cap was introduced on November 23, 74% of shifts worked by the four main staffing grades did not meet the cap, according to Liaison, which provides financial services to two-thirds of the NHS.

Analysis of 55 trusts in England found that for every ten locums, six consultant locums, five staff grade locums and nine ST3 (Specialty Trainee Year 3) locums were paid over the rate cap, while ten out of ten FY2 (Foundation Year 2) locums were paid in excess of the cap.

While there has been some progress in driving down pay and commission rates for locum staff, trusts across England overspent on the new target by £10.8 million in ten weeks as they sought to get to grips with the new system aimed at helping the NHS control agency spend rates.

Health Secretary Jeremy Hunt told the Commons in October that a maximum shift rate would apply to all clinical staff employed through agencies by the end of November.

The Department of Health (DH) had already announced that a cap would apply to nursing staff first before being extended to other clinical, medical, management and administrative staff.

Researchers found that ST3s accounted for 29% of hours worked and 90% of these hours exceeded the capped rates. This creates the biggest amount of approximately £4 million, according to the Liaison report.

It was found that 63% of consultant hours exceeded the capped rates, amounting to an average of £8 per hour.

Consultant locums make up about 35% of locum hours worked. This is the largest share of locum hours, equating to £3.4 million in further savings which could have been achieved, according to the report.

Researchers found that, based on the spending on the four largest staffing grades in the sample, the NHS could pay out up to £764 million on these locums this financial year.

The report suggests the NHS could save £191 million every year – a quarter of their current medical locum agency staff bill. This would need a 70% compliance level to be reached with the 55% capped rate that came in on 1 April 2016.

The NHS spent approximately £3.3 billion on agency staff in 2015, and as the market continues to grow, the 55% cap is expected to help counter the rising cost to the NHS.

The report shows that the average rate paid for FY2 locums is still 24% higher than the November capped rate of £40.36.

The highest rate paid for an ST3 locum was more than double the capped rate of £57.05.

Staff grade locums are the closest to their cap at only 3% higher than the November cap of £66.43.

Consultants are still being paid on average more than £100 per hour, 28% more than the April cap.

Average rates for FY2 locums need to fall by around 53% if they are to be brought in line with the April caps, bringing hourly rates down from £53 to £25 per hour, according to the report.

Liaison’s managing director Andrew Armitage described the figures as “a step in the right direction for the NHS” adding: “In areas where there is a shortage of locums, some are refusing to accept the new rates and this is putting the trusts and their agencies under pressure to not only keep within the rates, but to source suitable locums in the first place.”