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Uniting to challenge rising agency staffing costs

Following the recent imposition of caps on the rates the NHS can pay for temporary staff, London's NHS trusts have worked together to provide a united front against agencies refusing to comply - and the result in an unprecedented commitment by agencies to support trusts to meet their obligations.

Uniting to challenge rising agency staffing costs

The NHS London Procurement Partnership's existing framework agreements for clinical staff already provided ceiling prices for agency staff pay. The aim of this was to ensure consistency of pay across the London region, and remove the pressure on trusts to increase rates in order to attract more workers. Similarly, when LPP worked with the other NHS collaborative hubs (as the NHS Collaborative Procurement Partnership, or 'CPP') to create the National Collaborative Framework for the supply of Nursing and nursing related staff (launched in 2014), the principle was to enable trusts nationally to benefit from the use of capped rates.

The clallenge: complying with Monitor's new agency staff pay rates at speed

Monitor's guidance in November 2015 outlined the requirements for NHS organisations to comply with an overall hourly charge on clinical staff commissioned to work at trusts through an agency. This cap on the overall charge rate was the start of the Government's actions to reduce the spiralling cost to the NHS for temporary staffing. Any trusts breaching those caps has to report the amount of and rationale for the breach weekly.

Suppliers 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 do likewise in order to attract or retain staff. Once Minitor introduced the caps, trusts recognised that this situation needed real join action, and a consistent message from the NHS that trusts are working as one to ensure compliance.

These are the steps the trusts took to support compliance with the caps:

To support its members to manage this major change, which requires trusts to amend their rates downwards on three occasional in under six months, LPP put the following measures in place:

  • LPP's Staff Bank Managers forum for London trusts used to meet once every two months - from the moment Monitor announced that new caps would be implemented, this forum has met every month to share market intelligence and learning on how to manage the market.
  • This forum also allowed LPP to make trusts aware of trends in the market and clearly outline the framework stance.
  • LPP created a secure forum on LPP's online portal 'myLPP' for staff bank managers to share best practice in a safe place, share lessons learnt and discuss actions taken in the market.
  • LPP and its NHS Collaborative Procurement Partnership hub colleagues gave suppliers on the current National Collaborative Framework for the supply of Nursing and nursing related staff the opportunity to amend their pricing to fall in line with the new caps.

Managing agencies which were refusing to lower their rates:

The immediate response was that the majority of supporters amended their pricing in London. However, a minority of agencies refused to move all or some of their pricing to comply with the caps. In response, London's trusts took concerted acetion to give the consistent message that they would not use those agencies:

  • A series of meetings were organised by LPP between trusts and the top 11 agencies supplying temporary nursing, AHP and medical locum staff, at which it was made clear that the agencies were expected to comply with the caps.
  • The result was a clear understanding from the agencies that trusts would prioritise those agencies whose rates were compliant with the caps.
  • At those meetings, agencies agreed one to one to move to be in line with the caps, and confirmed that agreement formally to LPP.
  • As the meeting progressed, word spread within the agency market and LPP received news from agencies prior to meetings that they would comply with the caps.
  • Following this exercise, LPP provided the opportunity for all agencies to amend their February rates for a second time, and this led to a number bringing rates below the caps.
  • In support of this activity, LPP produced 'Stand Firm' information for each trust to display throughout its hospitals. It's aim is to explain the importance of this stand to avoid the use of non-compliant agencies to agency and non-agency staff alike - and to act as a reminder to agencies that this is a concerted effort by trusts working together.

As one LPP member said, "I really felt it was the first time the agencies saw us as a united front working together, not... working in our own blinked silos open to manipulation."

Supporting agencies to comply with the caps

It has always been recognised that agencies play a vital role in enabling the NHS to provide quality care to patients. There is also recognition that compliance is the biggest cost incurred by agencies supplying clinical staff to the NHS. The new caps will still require agencies to meet this level of compliance. Consequently, LPP members have:

  • set up a project group to reveiw the cost of agencies of compliance, and the parity between compliance requirements of the new framework and those of NHS employers. The aim is for trusts and agencies to consider how they can still achieve these levels of compliance and support on-framework agencies to work in partnership with the NHS.
  • issued a survey to framework agencies to allow LPP to understand the main areas of the cost of compliance, and to inform discussion on how trusts and agencies can work together to ensure quality is maintained within the pricing caps.

The future

This work has been underway at the same time as CPP has been working on a new national framework to cover the supply of all clinical staff at Monitor-approved rates - this framework is expected to go live in the early summer 2016. CPP has been very clear with the market that the new framework will comply with the caps being implemented on 1st April. The evidence of the success of this approach is that London has achieved commitment from both trusts and agencies to work together to get that compliance.

What trusts are saying about this approach

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

"I also found my colleagues' ideas and opinions on issues very interesting and have written up processes last night to implement some of them."

"I am meeting a number of our nursing agencies today and led by Pulse moving to under cap and the fact I can say we are united as trusts and are meeting agencies with the LPP has certainly increased our strength to hold the line."

"...we showed we are working in unison, we also demonstrated that we are liasing closely with our Board members and have their support (which I think doesn't occur to these agencies!) - this strengthens our positions in these meetings."


03-01-16    Agency

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