NHS spending on agency staff has “increased markedly” in recent years

22 Jan 2019 - 12:06am

Consistent and comparable data needed, along with strong leadership to manage expenditure on temporary staff, says Auditor General

NHS spending on agency staff has increased markedly in recent years – a rise of 171% over seven years - according to a report published today by the Auditor General for Wales. About 80% of agency spend to date in 2018-19 is providing cover for vacant positions and the NHS is seeking to reduce both the demand for agency staff and the price it pays for them.

Temporary staff in the NHS generally cost more than equivalent employees on substantive contracts. Those supplied by agencies tend to be the most expensive source of temporary staff.

NHS Wales now needs more consistent and comparable data to understand the root causes of agency spend. And, strong leadership and change management are also needed to achieve the consistent implementation of difficult decisions across all NHS bodies in Wales.

Today’s Auditor General report is a ‘facts only report’ which sets out the key information about the use of agency staff by NHS bodies in Wales. Together with a data-tool developed by Wales Audit Office staff, it aims to offer insight and enables readers to conduct their own analysis of agency expenditure. The report also promotes improvement by sharing information about current initiatives to curb agency spend and highlights the related challenges facing the NHS .

NHS agency spend in Wales peaked at £164.4 million in 2016-17. On average, health bodies spent nearly half of their total agency expenditure on medical and dental staff since 2014-15 and a further third on nurses and midwives. Factors that have contributed to the rise in spend includes the escalating hourly rates of pay charged by agencies; an increased demand in services and difficulties recruiting and retaining staff. But, there is no national analysis of just how much the various factors have contributed to the increase in agency spend.

Each health body holds data on how much agency staff they use and why. But, there is still no all-Wales analysis of how many doctors, nurses and other staff are being hired through agencies, their specialties and grades. The NHS is now developing arrangements at an all-Wales level to better understand nursing and medical agency usage, which are the two largest areas of spend.

The NHS is also seeking to reduce demand for agency staff through increasing the attraction of NHS Wales as an employer; trying to recruit and retain more staff; reducing sickness absence and improving rota management and job planning.  The demand for agency staff has fuelled competition between health bodies and has driven up the rates of agency pay. Health bodies are now working together via all-Wales working groups to try to control the costs.

Today’s report identifies two key challenges to improving the management of agency staffing expenditure. Firstly, NHS Wales needs consistent and comparable data at an all-Wales level to track the volume, nature and cost of agency staff used and the impact of changes in agency spend on other temporary staffing costs, such as overtime and internal staff banks.

Secondly, future projects to manage agency and other temporary staffing spend will need strong leadership and the capacity to drive change in a timely manner, to deal consistently with difficult decisions.

Auditor General, Adrian Crompton said today: “This report is packed with useful statistics and insights on the current picture of NHS agency expenditure in Wales. I hope it will be used by a wide range of people and professionals in Wales, along with the data tool we have produced, to help NHS Wales continue to bring down and control these costs at a time of significant financial pressure.”

Ends

Notes to Editors:

  • This report sets out key facts about the use of agency staff by NHS bodies in Wales – including expenditure; analyses by health bodies of underlying reasons; national initiatives to control this type of spending; and the challenges that lie ahead.
  • The NHS in Wales employs almost 80,00 full-time equivalent staff (excluding GP’s and those employed directly by GP Practices) and spent £3.62 billion on pay in 2017-18.
  • But NHS Wales also needs additional staff to supplement the full-time workforce – when key posts are vacant; staff are on sick leave, holiday or absent for some other reason; or when demand for services increases, for example through winter pressures. These posts can be filled by paid overtime; internal staff banks; private sector agencies or people who enter into a direct contract with health bodies on an ad hoc basis.
  • Staff supplied by agencies tend to be the most expensive source of temporary staff. NHS bodies in Wales collectively spent over £160 million on agency staff in 2016-17, more than four times the equivalent figure for 2012-13. There have also been large increases in agency spend in other UK countries.
  • The Auditor General is the independent statutory external auditor of the devolved Welsh public sector. He is responsible for the annual audit of the majority of the public money spent in Wales, including the £15 billion of funds that are voted on annually by the National Assembly. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £7 billion) and to local government (over £4 billion).
  • The audit independence of the Auditor General is of paramount importance. He is appointed by the Queen, and his audit work is not subject to direction or control by the National Assembly or government.
  • The Wales Audit Office (WAO) is a corporate body consisting of a nine member statutory Board which employs staff and provides other resources to the Auditor General, who is also the Board’s Chief Executive and Accounting Officer. The Board monitors and advises the Auditor General, regarding the exercise of his functions.