NHS expenditure on agency staff in London soars into 2016

NHS spending on agency staff in London is spiraling out of control, with costs set to top a whopping £400m this financial year.

The projected expenditure for 2015-16 reflects an increase of over £65m on the previous financial year.

The news adds further urgency Health Secretary Jeremy Hunt’s attempts to reduce agency costs. Last June Mr Hunt said the annual bill for agency staff had risen from £1.8bn to £3.3bn over three years.

The findings in London suggest this number is only increasing.

Freedom of Information requests were sent to all 45 NHS organisations in London, 32 of which responded. Of these, 22 are set to increase their expenditure for the second consecutive year.

Foundation Trusts, which run the majority of the capital’s hospitals, made up eight of the top 10 spenders this year.

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The £412.6m estimate for the current financial year was based on expenditure from April to December. The winter months could make the final figure even bigger, said Sally Gainsbury, senior policy analyst at health think tank the Nuffield Trust.

“Traditionally you see a huge peak of demand for NHS services during the winter time,” she said.

“Supply-demand is the root of the problem. Demand for NHS staff, particularly nursing staff, went up just at the time when the supply was diminishing.”

Jane McVeigh, human resources director at Central and North West London Foundation Trust (CNWL), agreed with Ms Gainsbury.

“Temporary staff will always be something the NHS needs when responding to surges in demand,” she said.

CNWL’s forecast expenditure this year is £23.7m. The Foundation Trust average of £24.1m is enough to employ 952 nurses annually.

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“Staff can often earn more through an agency than the standard NHS pay rate,” Ms McVeigh said.

The flexible hours and higher pay offered by agencies, she added, were leading many workers to leave permanent posts for temporary employment.

The agencies also offer benefits to the NHS, said director of research at CNWL Lynis Lewis, who is responsible for hiring new staff in her department

“The recruitment process can take five months to get someone in post,” she said. “With a temp it’s done within a week. And trying to get rid of non-performing staff is nigh-on impossible in the NHS.”

The two trusts with the highest levels of spending – London North West Healthcare and King’s College Hospital – were also the two with the highest forecast deficits for the year.

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King’s College Hospital Foundation Trust, with a total of £57.4m, is set to be the biggest spender for the second successive year

London North West Healthcare has a projected £88.3m deficit and will almost double its agency expenditure since last year to over £35m.

Ms Gainsbury was unsurprised by the link.

“Are you going to employ staff on a permanent basis if you’re worried about redundancies? If you foresee a need for cutbacks it wouldn’t be sensible.

“And you wouldn’t want to work at a hospital on the verge of bankruptcy as you might be made redundant.”

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