How can the NHS really make agency spend savings?

The NHS Improvement (NHSI) agency rules continue to be hailed as a success, but is there more opportunity to realise savings on agency spend?

You may think this is a strange article to come from an agency specialising in the provision of NHS staff. 

If we believed everything that has been portrayed in the media over the last 12 months, it would be easy to assume that agencies are the cause of some very big overspends in NHS provider budgets. In reality, agencies are simply meeting a demand created by the Trusts.

As is the case in any industry, there are agencies and candidates who will take advantage of this ever growing demand − increasing pay rates and agency fees accordingly. At the other end of the spectrum are agencies who have worked with and will continue to work with the NHS to provide interim agency staff in an ethical and commercial manner; working in partnership to ensure a good return on investment for the NHS Trust.

So, how can Trusts continue to reduce agency spend without any further compromise on patient safety, or the quality of the interim staff, which is an inevitable consequence of the NHS Improvement agency rules?

Collaborative procurement: There is a very real opportunity for Trusts to use the NHSI approved frameworks to procure even better agency fees by running a competitive tendering exercise; thereby affording those agencies who are working through NHSI approved channels the opportunity to offer further savings in return for a larger share of the wallet. This, if done correctly, proves a win/win scenario for both parties.

Right solution: From preferred supplier lists through to full Managed Service Provider contracts, it’s really important that NHS providers understand the different products available, and which will suit their specific requirements before commencing any procurement exercise. This ensures that the right suppliers bid and offer the best solution for that particular NHS provider. Previous experience:  Currently many NHS providers lack in-house experience of successfully procuring and implementing a recruitment solution of the scale that will achieve the saving they need.  Bringing in the experience, with the right support from the Trust, will ensure a successful procurement exercise and afford the relevant experience.

Governance:  Procuring more attractive agency fees is the first step. Currently, however, many Trusts see this as the end goal: projected savings target achieved, box ticked.  In reality, without a thorough governance programme to support the award of a contract, no real savings will be achieved. So how do Trusts turn projected savings into a hard cost saving? It sounds simple but they need to ensure 100% compliance of the contract.  This can be achieved by:

  • Pre-engagement: It is important that the Trust engages with key stakeholders prior to the initiation of the procurement exercise. Gathering first-hand feedback on the current challenges, and scope of the requirements across the whole Trust, gains the support and engagement of the hiring managers reliant on agency staff. 
  • Executive sponsorship: Any contract award has to be supported and mandated by a board executive: either the Chief Executive, Director of Finance, or HR.  This needs to be communicated across the Trust with consistent consequence for rule breakers. 
  • Partnership:  NHS providers must understand that any contract will only be successful if the Trust is prepared to work in partnership with their chosen supplier.  Expecting any supplier to be able to engage and enforce compliance without the support of the Trust will inevitably lead to a failed contract.

Technology:  Building technology into the desired solution will add an extra layer of cost savings above and beyond immediate savings on agency fees. Technology will afford NHS providers visibility on such things as pay rates, contract length, seasonal trends and overtime – leading to tighter control of overall agency spend.

Whilst everything in this article may seem like common sense, the reality is far from it.  As one of the specialist suppliers to the NHS, the last four procurement exercises we have taken part in have either been cancelled because the NHS provider was unclear about what they were trying to achieve before starting the process, or the scope of the award has changed drastically from the initial request.

All in all, if the NHS can get the procurement process right there is a significant saving opportunity to be made on agency staff. But does the NHS have the appetite or expertise to bring this to fruition? Only time will tell.


By Tracey Sherring - Operations Director


See all , NHS
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