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(See: Clampdown on staffing agencies charging NHS 'extortionate rates' - June 2015, Shout99)
But are the criticisms fair?
The answer to that question is a simple ‘No’ according to Adrian Marlowe, Chairman of the Association of Recruitment Consultancies (ARC).
He writes:
Jeremy Hunt refers to charges ‘by some agencies’ of £3,500 for the supply of a doctor for a single shift. Similar figures were reported in March this year by the Telegraph who claimed NHS hospitals have paid doctors and nurses record sums amid a spiralling crisis in Accident and Emergency departments, with locum medics able to charge up to £3,200 each per shift, and agency nurses on ‘unprecedented rates of up to almost £1,900 a day’.
Given this, Mr Hunt has a real basis for looking into this area and on the face of it saying that expensive staffing agencies are ‘ripping off the NHS’.
The regulator Monitor separately reported that NHS trusts overly rely on agency staff, so it is easy to see why Mr Hunt has said what he has and that there are genuine reasons why he wants to cap overall spending in this area.
Ripping off
There is a temptation for me, as Chairman of an association that is pledged to support its agency members and improve the landscape for recruitment business in the UK, to say that it is a shame he has used what appears to be inflammatory language casting aspersions on the agency sector. However, an emotional response is not what is required. The ‘ripping off’ comment I believe is only made because it is the agencies that submit the bill to the NHS, and it’s best if we look behind this.
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If the rates were reasonable on the face of it, would this attack be mounted? If the NHS were not suffering from major staff shortages and had no peaks in staffing requirements, had its own bank of qualified staff to fall back on, would this issue arise?
It’s basic economics that if there’s a shortage of a commodity and demand for it increases, prices inevitably go up, and the reverse happens if there is an oversupply. This applies in the same way to the NHS where by all accounts there is a critical shortage of staff both generally and for peak pressure times. I don’t want to state the obvious but given the comments made I feel I ought to.
Piggies in the middle
Because of this critical situation two factors come into play. First managers of NHS Trusts know they need the staff and will be criticised if they fail to meet targets, and indeed may even lose their jobs. Second, all staff, whether regular or temporary, know this. Those staff who choose to work temporarily are in a position to bargain for better rates, and by that I mean rates that reflect the shortage and the pressure due to the targets.
The ‘piggies in the middle’ are the recruitment agencies who are engaged by the NHS to find staff often at very short notice. When they are given a requirement I assume they are given an applicable rate by NHS procurement. They then have to find temp staff who will work for those rates, allowing for the agency margin charge (the agency is not going to do this for nothing and margin charges or fees will have been agreed with the NHS in advance).
It is clearly often impossible to find people to work for scale rate. The outcome is that an agency may have no choice but to put forward those applicants that it can find and specify the rate the candidate will work for. Can it realistically do anything else? It is then down to the hiring NHS Trust to agree the rate or otherwise.
We now are told that trusts have been agreeing very high, indeed shocking, rates but it is entirely wrong to suggest that this is the fault of the agencies. If the issue were about agencies charging exorbitant margins, that would be a different matter. As things stand this does not appear to be the criticism, and I hope that Mr Hunt notes this point.
Market forces
Given that rates charged are driven by market forces working on the minds of temporary staff, and supply and demand, surely the government is right now to restrict rates the NHS is allowed to pay by law. After all the NHS belongs to the taxpayer that wants value for money. Logically if temporary staff cannot by law earn higher rates they would not be in a position to find work at those rates. Of course this could lead to a large number of nurses and doctors looking to the private sector for work, but the glut should result in prices reducing.
The reason for staff shortages in the first place is outside my remit, but so far as rates are concerned the outcome of a law capping rates may be a good result for the taxpayer, assuming there is no mass migration of medical staff abroad and rates remain sufficiently attractive to necessary temporary staff. But please let’s not point the finger of blame for the historical position at agencies who have worked hard to support the NHS and provide it with the flexible workforce it needs.
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Susie Hughes © Shout99 2015
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