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NHS agency fee clampdown: Will nursing homes become the hidden victim?

A few weeks ago, Health Minister Jeremy Hunt vowed to deal with "rip-off" charges made by nursing agencies by limiting the amount the NHS spends on its agency staff. Hot on his heels, David Cameron announced new immigration laws meaning workers recruited from outside the EU since 2011 who earn less than £35,000 a year after six years will have to go home. To avoid any doubt, that means that 30,000 overseas nurses face the axe from the NHS. So where do care homes get the staff they need?


NHS England Chief Executive Simon Stevens has echoed Hunt's call, vowing to cut budgets for temporary staff and pledging to ensure that NHS hospitals offer employment to nurses who have previously swapped NHS contracts for better-paid agency work.

New rules designed to address overspending on agency staff will see the NHS set a maximum hourly rate for agency doctors and nurses, impose a ban on use of agencies outside approved frameworks and set a cap on total agency staff spending for NHS trusts who find themselves in financial difficulties.

Last year the NHS spent £2 billion – over twice the planned amount – on agency nurses, including £2,200 for a single nurse working a 12-hour shift. So who's to blame? Greedy agency bosses? The Government? The NHS?

Following Hunt's announcement the heads of various industry bodies were quick to defend their positions. The Royal College of Nursing's Chief Executive and General Secretary Peter Carter blamed the NHS for "poor workforce planning coupled with a shortsighted failure to invest sensibly." He went on to say that cutting the number of nurses working within the NHS was a "misguided attempt to save money".

The Recruitment and Employment Confederation (REC) countered with an open letter to Jeremy Hunt accusing him of "Scapegoating agencies and agency nurses for the lack of new nurses and years of poor workforce planning and financial mismanagement", highlighting the RCN's often-repeated claim that not enough new trainee nurses are entering the sector.

Hunt's crusade against agency charges may be music to the ears of a government tired of cutting its own departments but all this high-profile mudslinging has overlooked the needs of the independent care homes sector: a major player in the field of healthcare that is heavily dependent on nursing agencies but unable to match huge bargaining power of the NHS.

Nearly three quarters of care homes in the UK are now run by private providers. Over the past two years Britain's largest nursing home groups have reported an average 55% increase in the use of agency workers, and figures just released show that nurse vacancy rates are currently running at 9% in social care settings, as opposed to 7% in the NHS.

Almost one in ten of all the registered nurses in Britain (around 60,000 individuals) work in this sector, with residential homes typically needing up to three nurses on hand each day to look after residents who require medical care. Recruitment is a key issue here, particularly as the proportion of nurses aged 55 or over working in care homes is 30%, set against only 13% in the NHS. Proportionally more nurses are therefore retiring from the care sector as a time when cuts in training places mean that fewer nurses are ready to enter the profession.

Some care homes have already made the decision not to use agency staff. Pamela Ann Packham of David Gresham house told us "We have always prided ourselves on giving the care, the love, warmth and comfort that residents need. Using agency staff fails to provide this to the standard that we uphold. I prefer to use my long standing staff, my own bank of staff and even training apprentices over using agency staff". That view is echoed by Susanna Simmonds of Beech Tree care home who says "For continuity of care and the benefit of the residents I choose not to use agency staff and consider myself very lucky to have such a reliable and hard-working workforce".

But for those care homes that did use agencies, their views contained some very stark warnings. Kaisa, the manager of Grove road care home (Part of The regards partnership Limited) in Sutton told us " Agencies already charge a huge amount, sometimes double the "going" rate of dedicated full time employees. Should this rate rise even further it will stretch the care industry too far, putting too much emphasis on profit margins and nowhere near enough emphasis on care. Remember that this is on top of agency staff coming in with no idea of how the individual care home is actually run and we have to manage this very closely as this could lead to sub-standard care." Angela, the manager of Acorn House in Croydon said "Agency staff are already a financial burden on care homes, should this increase, some homes may have no alternative than to run under-staffed and the residents shall suffer as a result. Once again, the NHS get their way and care homes remain inadequately supported by authorities"

The recent exposé of the large sums charged by agencies – which has led to some agency bosses facing sharp interrogation by the media – may at first glance appear to benefit organisations who are dependent upon agency staff: surely such public shaming can only drive fees down? But if agencies can no longer rely on lucrative NHS contracts there's a chance that they may either go out of business or be forced to look elsewhere to shore up their shrinking profit margins.

Either way, the independent care sector is likely to become an unintended casualty of Jeremy Hunt's ambition to bring nursing agencies to heel.

The frustration about the inequalities between what is being paid to hard working employees at care homes as opposed to Nursing Agency fees is summed up by Theo, the Manager of 851 Brighton Road, who told us that "Pay needs to be regularised, there can be too much focus on money and then care/best practise becomes a secondary priority whereas it should always come first. For us it is of up most importance that residents, relatives and staff needs are met. An increase in agency fees is certainly not going to help and will put a lot of extra strain on the care industry, money could be a lot better spent elsewhere, for example, training full time staff"

While the NHS flexes its muscles, preparing to do battle with the nursing agencies, the beleaguered care sector can only watch ... and wait.

Author: Rob Anderson

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