Simon Stevens, NHS CEO – Let’s Make Staffing Agencies the Scapegoats for NHS Problems

hospital sign sepia 200It is clear that Simon Stevens is not stupid. Far from it, he is one of the cleverest men in the country. As an ex political adviser at the highest levels, a CEO of a major healthcare corporation, and now Chief Executive of the UK’s National Health Service, he has proved himself to be a man of talent and intelligence.

So you have to assume he knows that he is talking absolute nonsense when he blames “agencies” for the woes of the health service, and that there must be some reason for his daft comments in recent days. Here is the Health Service Journal.

“HSJ reporter Judith Welikala is at NHS England’s board meeting this morning, where chief executive Simon Stevens will say the entire NHS provider deficit of £822m can be accounted for by overspending on temporary staff”.

He was on the BBC yesterday too, saying much the same thing. I’m sure the entire £822 million could also be accounted for by PFI excess profits, spend on drugs that don’t work, or the cost of treating fat people. But no, it is down to temporary staffing agencies “ripping off” hospitals.

So why is Stevens taking this line? The reason isn’t too hard to find if you think of him as a politician as well as a civil servant. What is the classic political manoeuvre of any leader who is under threat? Find a convenient group of “outsiders”, and blame them for everything that is going wrong. Unite your people - or most of them anyway – in opposition to this group, who are responsible for all and any problems.

The left tends to use “the bankers” as the all-purpose example of this these days. The right in the UK tend to refer to “benefit scroungers” who are clearly the reason for the entire budget deficit. Immigrants, the French, witches, fat-cats ... you can add your own favourite scapegoat. And the worse the situation, the more vitriolic the leader becomes in condemning the group in question. So Stevens has obviously decided that “agencies” are a handy equivalent given the current (pretty much permanent) crisis of funding and performance in the NHS.

Now it is true that spend on temporary staff is a component of the current financial problems facing the sector. But the causes of that spend are many: poor long-term resource planning going back years; lack of skill in shorter-term manpower management; the unattractiveness of certain jobs in the health service; the CQC getting obsessed with staffing levels as a proxy for good care (that in itself following the North Staffs tragedy); the additional flexibility and cash that staff can get through agency working compared to being employed; the freezes on NHS staff pay in recent years, and the temptation to make lots of money for a few extra shifts. The list goes on.

Stevens must know that agencies make a margin but it is a relatively small part of the total fee paid. That in itself reflects supply and demand, which is driven by those factors outlined above and other deep issues in the NHS. And he must know that some 70% of medical interims are actually employed in the NHS – they are moonlighting in effect!

Are some agencies exploiting this? Of course they are. If they work on a percentage margin basis, the higher the rate, the more money they make. But most agencies are engaged via frameworks let by public procurement processes, either by collaborative bodies or individual Trusts. So is there a failure of procurement there too, if the suppliers' interests are not aligned with their customers? Yes.

Stevens is talking about putting a cap on fees charged, but here is one simple though for him. Change the standard employment contract so NHS staff can’t moonlight. (Most private sector firms have that approach). They can do overtime for their own Trust but not go and work elsewhere. But the danger then is more might resign and go fully interim, and you will have to relax the CQC rules because Trusts will, in the short term at least, experience shortages – just as they will if Stevens introduces a cap. But let’s come back and look at that idea of a cap in more detail another day.

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Voices (2)

  1. Bill Atthetill:

    Some observations:

    – agencies are not charities and like many private companies (such as those providing PFIs, like Innisfree they want to make as much profit as possible and be extremely successful

    – agencies operate within an open devolved market of local choice not in a single, centralised, command and control organisation. They compete, they win, they charge whatever the market can bear, they change prices (upwards) whenever possible, because that’s what suppliers do whenever they can (post-award)

    – procurement in the NHS is now in a very poor state (aside from local initiatives). There isn’t any national procurement strategy for agency – just a pile of duplicative ‘frameworks’ (including the widely/publicly rejected nursing framework ‘delivered’ by the Crown Commercial Service). We were told by the DH Commercial team, in Aug 2013, that a national strategy would be developed and launched, but there is still no sign of it. From what I know, there is no procurement expert within DH commercial permanently dedicated to this massive area of (increasing) spend. (Perhaps this is why Stevens came up with the idea of a cap because he had no-one to turn to…)

    – suppliers respond to market and customer demand – trusts are shopping for staff and suppliers have staff on their books that they want, at market prices, which trusts are able to pay

    – workforce management within trusts is also dire and trusts have outsourced the problem to the markets knowing that they (trusts) can never go bust and all supply contracts are backed by Treasury (even Foundation Trusts)

    – CEOs and CFOs don’t get sacked for overspending on agency staff – they sacked for fundamentally failing their citizens in the delivery of quality and standards in healthcare. They might get sacked (eventually) for failing to reduce massive deficits above c£100m (like Barts) but rarely below that figure

  2. Sam Unkim:

    Any move to stop moonlighting whilst the government, are ignoring the recommendations of the independent Pay Review Body, would be really toxic.

    Would this apply to Locum Doctors as well ?

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