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The National Audit Office has found that while the NHS has successfully reduced its expenditure on agency nursing staff, temporary staff remain a key component of trusts’ ability to be flexible and expenditure on temporary nursing staff employed through nursing banks and NHS Professionals has increased. Many NHS trusts do not have robust information to help determine cost-effective staffing levels or to understand their real staffing needs. The National Audit Office’s report estimates that between £38 million and £85 million a year can be saved by better procurement of temporary nursing staff and better management of permanent nursing staff.

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Acute and foundation trusts in England spent £790 million on temporary nursing staff in 2004-05, 9.4 per cent of their total nursing expenditure, down from 10% in 1999-00. Trusts have made good progress at reducing their expenditure on agency nursing staff, the most expensive type of temporary staff. This has fallen from its peak of seven per cent of the total spent on nurses down to three per cent in 2004-05. However, trusts have paid less attention to addressing the wider issues of controlling and managing demand for all types of temporary nursing staff.

There is wide variation in spending on temporary staff. In 2004-05 expenditure as a percentage of total nursing expenditure ranged from less than five per cent to as much as 29 per cent with trusts in the south of England relying more on temporary nursing staff than trusts in the north.

NHS trusts have to be able to respond to fluctuations in demand and staff availability through flexible staffing arrangements. The use of temporary staff forms a key part of this flexibility for many trusts. However, high levels of unmanaged use of temporary nursing staff can be costly, particularly when trusts place high levels of reliance on agency nursing staff. In addition high levels of vacancies and extensive use of temporary staff can worsen patient satisfaction and staff morale.

In response to concerns about the cost and quality of temporary nursing staff and in recognition of the fact that some staff want to be able to work more flexibly within the NHS in 2001 the Department of Health launched NHS Professionals, a national temporary staffing service. It also encouraged the NHS Purchasing and Supply Agency to set up and audit a series of framework agreements to improve the cost and quality of nursing staff procured through nursing agencies. This report finds that work by NHS Professionals and the NHS Purchasing and Supply Agency have improved the cost and quality of temporary nursing staff but more needs to be done to ensure that all temporary staffing suppliers are operating to consistent standards.

The National Audit Office recommends that trusts need to concentrate further on managing their demand for temporary nursing staff. Many trusts do not have adequate and timely information on staffing needs nor do they have a clear understanding of the factors driving their demand for staff. It is particularly important that trusts develop this understanding as NHS reforms such as Payment by Results and Commissioning a Patient Led NHS take effect across the NHS and activity levels and funding levels in individual trusts are likely to fluctuate from year to year. Trusts need to able to operate a mechanism that will allow them to flex their staffing levels and remain in financial balance whilst ensuring that they can provide a safe and effective service for patients.

“Trusts have been successful at reducing expenditure on agency nursing staff but there is scope to obtain greater value for money by improving the procurement and management of all temporary nursing staff. It is very important that trusts further develop their understanding of their demand for all nursing staff as the ability to be able to manage the workforce effectively will play a major part in determining whether trusts remain in financial balance under Payment by Results.”

Sir John Bourn


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