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London's NHS organisations collaborate to save £27m on agency staffing costs in 12 months

Working together to ensure that pan-London pay rates for agency workers are within NHS improvement pay caps will see London's NHS save £27m in the months to August 2017 on its bill for clinical staff.

London's NHS organisations collaborate to save £27m on agency staffing costs in 12 months


The savings are the result of London's NHS trusts comitting to working collaboratively to reduce spend on agency workers, using the NHS Collaborative Procurement Partnership Clinical Staffing Framework. This framework, which went live in August 2016, enables trusts to source agency workers (nurses, medical locums and other clinical staff) in line with NHS pre-employment checks, and at pay and charge rates that are within the caps set by NHS improvement in April 2016.

London trusts have an established history of working together to share and learn from their experiences of employing agency workers through a monthly meeting of staff bank managers. Known as the Staff Bank Manager's Forum, it is hosted and organised by the NHS London Procurement Partnership (LPP). Agencies play a vital role in enabling the NHS to provide quality care to patients. Agencies, however, have been used to working with each organisation as an individual customer. When one trust increases the rates it will pay, that puts pressure on neighbouring trusts to increase their own rates in order to attract or retain staff.

The introcution of the caps facilitated a sea change in the relationship with agencies. Following the introduction of the first caps, in November 2015, London's trusts displayed a united front against agencies refusing to comply with the new rates - and the result has been an unprecedented commitment on the part of agencies to support NHS trusts to meet their obligations.

In August 2016, the Collaborative Procurement Partnership (CPP) launched the CPP Clinical Staffing Framework which ensures NHSI rate compliance - and has the facility to amend caps downwards again if NHSI makes any further rate changes.

Identifying the savings opportunity to be gained from the new framework

Prior to the award of the new framework, LPP undertook an analysis of pay and charge rates for agency workers across the capital based on pay rate information collected from the (then) current LPP temporary staffing frameworks. This data included information on shift patterns and the specialist areas of supply.

Based on this analysis and in discussion with staff bank managers, LPP developed a detailed picture of agency supply costs by type of agency worker. This enabled trusts to determine that it was appropriate not simply to aim for NHS Improvement caps, but in some instances to be more ambitious and require pay and charge rates to be below the capped rates to generate additional savings.

Agreeing to pan-London pay rates for agency nurses and agency AHP/HSS staff

LPP, in consultation with trusts, devloped a working proposal for pay rates which could be applied under the new framework. This was tested to ensure workability, focusing firstly on agency nursing and allied health professional staff. Trusts saw the benefit of agreeing consistent pan-London rates to remove the incentive for agency workers to migrate to whichever trust or supplier was willing to pay the most.

From an agency point of view, ensuring agency workers are compliant with NHS employment standards is the biggest cost incurred by agencies supplying clinical staff to the NHS. Reducing the migration of workers in search of higher rates means that agencies are less likely to incur compliance costs for workers only to lose that worker to another supplier willing to pay a slightly higher rate. Trusts have managed to implement these changed without any adverse impact on fill rates.

Next steps

NHS trusts are faced with the challenge of not only complying with NHSI pay and charge rate caps, but also reducing the total amount of money they spend on agency workers. LPP continues to take a data-led approach to managing the agency market and will seek to identify any issues of non-compliance eithin pan-London agreements. This data will continue to be reveiwed at the monthly Staff Bank Managers' Forum where trusts will agree a common course of action to manage any instances of suppliers failing to supply according to pan-London requirements.

The next phase of work will be to adopt a similar collaborative approach to the setting of pay rates for medical locums.

NHS trusts remain committed to working together to get the best deal for patients and for the NHS as a whole, and are clear that the best way to ensure a sustainable and affordable service is to share information and a common approach to managing the agency market.

National coverage via the NHS Collaborative Procurement Partnership

LPP manages the London region, but the framework is of benefit to the NHS nationally. It is a join collaboration between LPP, North of England NHS Commercial Procurement Collaborative, East of England NHS Commercial Procurement Collaborative, East of England NHS Collaborative Procurement Hub and NHS Commercial Solutions, working together under the banner 'NHS Collaborative Procurement Partnership'.

What NHS trusts are saying

"I really felt it was the first time the agencies saw us as a united front working together, not the LPP and individual trusts working in our own blinkered silos open to manipulation."

"The fact that I can say we are united as trusts and are meeting agencies with the LPP has certainly increased our strength to hold the line."

"The evidence of the success of this approach is that we have achieved commitment from both trusts and agencies to work together to get that compliance."

05-04-17    Agency

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