Press Release – NHS agency staff research exposes widening gap in pay and commission between the North and South
After regulators revealed that spending on locums has risen by £800 million in just one year, a new report has exposed a widening gap between what NHS trusts in the North and South pay for the recruitment of temporary staff.
The findings revealed that 16 trusts in the North booked 50 per cent more temporary staff hours than the same number of trusts in the South, spending almost £10m in pay and commission, almost £3.5m more than the South in the same period.
The first quarterly update of ‘Taking the Temperature’, produced by Liaison, measures Q3 of the last financial year (2014/15), and is part of the most comprehensive review of NHS spending on medical locums ever carried out. The update comes hot on the heels of an announcement that a record £3.3 billion was spent on agency nurses and doctors in the last financial year — twice what had been planned.
The report, with its annual findings published in July, analyses pay and commission by grade and specialty across the trusts and boards that Liaison works with for its workforce services, and compares results by size, type, region and agency.
The trusts and boards researched in the Q3 update booked over 2,400 locums for a combined total of more than 350,000 hours and paid out £24m in pay and commission.
Among the report’s other findings:
- The North West and South West paid the highest hourly pay rates. The South East Coast paid the highest commission rates – 79% more than the East of England for a GM consultant.
- The percentage of commission relative to the total pay and commission bill fell slightly from 10.95% in Q2 to 10.49% in Q3.
- Across all grades, locum pay saw an increase in hourly rates with the biggest rise in the average hourly pay rates for a consultant, now at £88.73, up by £2 per hour.
- Pay rates continue to exceed recommended National Framework Agreement (NFA) rates, with consultant rates on average 46% higher than the average NFA rate (exc. tax and NI).
- The biggest reason for sourcing temporary staff was to cover the shortfall created by substantive vacancies. With 66% of hours booked being driven by unfilled vacancies, substantiating the wider workforce planning issues experienced by the NHS to fill permanent roles.
- Pay rates for 26% of bookings made were overridden, meaning pay rates that were over contract rates previously agreed with the agency were manually overridden at the time the booking was made. The system holds the contract rates by agency.
- The hourly pay rate for a locum Consultant in General Medicine averaged £90 per hour, however, the highest rate paid was almost half again at £133 per hour – down from £175 compared to 13/14 annual figures.
- The hourly pay for a locum Consultant in Accident & Emergency averaged £90, however, the maximum paid for a Consultant of the same grade and specialty reached £140 per hour. There are still major variations in commission levels that are being agreed between trust staff and agencies, for example the greatest increase for an ST3 hire, where commission reached £25.27 an hour, is over four times the national average.
The NHS spent approximately £2.1bn on agency staff in 2012*, yet despite efforts to reduce this, the market is continuing to grow, competition to attract staff is expected to increase and the under-supply of staff in particular groups will continue. The importance of controlling this rising cost has never been more critical.
Andrew Armitage, Liaison Managing Director said: “This is the most thorough investigation into temporary staff spending ever undertaken, and in its first two publications has already provided consolidated benchmarking data and information that the NHS is simply unable to access itself. The Q3 update couldn’t have come at a more appropriate time, as it gives experts the detailed analysis they will need in the coming months to see where savings can be made.
“We know that it can often be difficult for trusts and boards to get the levels of transparency they need on what they are paying on both pay and commission to be able to make decisions, and that is why we are working with them to improve this. Without this control and visibility, their ability to negotiate with suppliers or to benchmark themselves against their peer group or region is deeply affected.”
The data is derived from Liaison’s direct engagement service, part of its TempRE offering that comprises a range of services helping trusts and boards control and reduce their reliance on agency staff spending. 25% of all NHS trusts and boards in England and Wales are using Liaison’s services help them to better manage and reduce their temporary staffing costs.
Liaison’s support offers trusts and boards benefits such as a centralised system, meaning they are able to see and control how much they are spending on agency staffing; something that was previously very difficult to do. It also allows trusts and boards to analyse management information on the use of temporary staff and gives them the control they need in order to manage this spend more effectively, as well as giving them the power to challenge rates.
Liaison’s rate checking software is further helping trusts and boards by enabling them to set parameters for the agency rates they are prepared to pay and to challenge inflated rates at the point of booking. The service is also helping trusts and boards measure what they are spending and where, enabling them to negotiate discounts at the same time as eradicating invoice errors.