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29th March 2018 in Blog, Latest blog posts

Taking the Temperature Q3

Positive signs as average locum pay and commission falls in Q3

As staff shortfalls remain a principal issue across UK trusts, the challenges faced by the NHS are no secret. Locum support provided by agencies is, of course, intrinsic to the NHS; required to ensure the services provided to the public are not compromised, and continues to be a focus of financial decisions made by trusts.

Working with more than 25% of the NHS to help better control, manage and reduce the costs of temporary staffing, our quarterly report, Taking the Temperature, offers up to date pay and commission rates from 68 trusts to help better inform future spending.

Whilst some locum pay rates continue to exceed price caps introduced by NHS Improvement in 2015, our latest report on spending in Q3 2017/18 does offer some really encouraging signs.

Overall, average locum pay and commission rates have fallen as we continue to work with trusts and boards to combat high expense buying habits and encourage collaborative banks to keep locums working within the system. Driving forward, more management information reporting to challenge and negotiate commission charges with agencies is proving valuable, and it is especially positive that we have seen commission fall for the second consecutive quarter, both overall and for the four main grades of staff. Pushing to keep all costs within rate cards and framework and / or commission amounts, we are confident this trend can continue into Q4 and beyond.

Further emphasising the reliance the NHS has on agency workers to fill substantive vacancies – the reason for more than 80% of bookings in Q3 – we found that although commission rates dropped, average pay rates increased for the four main grades of staff. We see this most significantly for Staff Grade locums, where rates climbed 1.5% over the quarter, with the highest rate paid in this field standing at more than double the core price cap of £117.97. In spite of this, it is clear that where trusts and boards are finding it difficult to curb pay rates they are compensating in negotiations on commission, where rates are continuing to fall.

As the challenge facing the NHS to secure better deals on both pay and commission remains, we found that almost 60% of pay rates overridden in Q3 were due to the need for a specialist locum and in 24% of cases this was because the agency agreed to reduce their commission fees – an increase from 22% in Q2.

With the highest pay rates for locum Consultants and ST3s in Radiology and General Medicine, coming in at more than £160 an hour and average pay rates at more than £100 per hour, the recruitment of full-time positions across these specialities is continuing to pose a problem for the NHS. The highest individual rate paid to Radiology Consultants comes in at £169.31 p/h.

As is to be expected, the maximum rates for ST3s were paid in A&E, Anaesthetics and Surgery to provide locum support enabling departments to cope with medical emergencies. Bookings made at short notice accounted for 15% of all hourly rates overridden this quarter.

Supply of specialists continues to fall short of demand and trusts and boards are continuing to pay substantial sums to agency workers in specialist fields.  Across the top ten highest earning locums during Q3, the projected annual cost to the NHS is £3.54m.

If these 10 locums’ pay rates were limited to NHSIs cap, the annual saving to the NHS would be £892k, a significant amount on a small, high cost area of spend.

Of these top 10 locums, seven have worked consecutively for six months or more, putting a continued strain on finances as trusts and boards struggle to employ full-time workers to fill vacancies.

Despite this, it is encouraging to see the number of locums paid £120 or more per hour reduced from 6% to 5% in Q3, indicating that the requirement for Chief Executives to sign off the very top pay rates is working to reduce the volume of highly-paid agency staff.

Regionally, NHS South Central sits top of the table for the highest average pay rate in Q3 for General Medicine Consultants, where pay rates increased by £10.76 to £190.49 per hour, closely followed by the East Midlands.

Whilst the East Midlands actually had the third lowest average rates for General Medicine ST3s, the South Central region has experienced difficulty across grades of staff, paying the second highest rates for GM ST3s in addition to its table-topping spend on GM Consultants.

Although Yorkshire and the Humber paid the second lowest pay rate – £100.88 – for General Medicine Consultants, the region contributed to the highest rates for GM ST3s in Q3, with a substantial average pay and commission of £96.61, £13 more than the second highest paying South Central.

 

Whilst spend rises as pay rates increase, our findings do indicate positive change for trusts up and down the country, as we strive to streamline costs within the NHS and we are hoping to see the promising findings from Q3 continue into the final quarter of the year.

Our independent support provides NHS trusts and boards with a technology enabled service that offers transparency, guidelines and benchmarking to help them track performance, identify areas of necessary improvement and enable significant movement towards control of agency staffing spend.

To view the full ‘Taking the Temperature’ report for Q3 2017/18, click here.

 

Judith Shaw

Director of Workforce Management