News / Framework agreements aim to contain increase in agency staff costs

Monitor and the NHS Trust Development Authority published details of the approved frameworks during September as part of broader rules that also set an annual ceiling for total nursing agency spend for each trust. Price caps are also planned for later in the year.

NHS providers spent £3.3bn on temporary staff in 2014/15. Trust spending on agencies was described by Monitor as ‘one of the most significant causes of deteriorating trust finances’.

While increasing use of temporary staff has also been linked to quality concerns, the framework agreements requirement aims to address cost issues. Even where hospitals have frameworks in place, many have had to go ‘off-framework’, and pay higher rates than those negotiated through the frameworks, to secure the staff they need.

Use of approved frameworks is mandatory for all NHS trusts and foundation trusts receiving interim support from the Department of Health or in breach of their licence for financial reasons. However, Monitor is encouraging all foundation trusts to comply. It has warned that ‘inefficient or uneconomic spending practices’, including those relating to agency spending, will be taken into account in assessing governance and the new value for money assessment trigger.

While the rules allow for deals outside of the frameworks in exceptional circumstances, with patient safety the overarching requirement, getting all hospitals to stick to the framework agreements is seen as the best way of putting more control in the hands of trusts.

Trusts must not exceed the maximum rates published in the framework agreements for their chosen supplier. However, Monitor and the TDA reminded trusts that they did not need to pay the maximum rate. Instead, trusts should ‘negotiate the best deal they can, including, but not limited to, conducting mini-competitions where possible and appropriate’.

Paul Briddock, HFMA director of policy and technical (pictured), said: ‘Any help that organisations can have to contain their costs on temporary staff is welcome. The framework agreements make sense, as do moves to try and introduce maximum rates for agency staff.

‘But we also need to ensure that we address the cause of these rising costs – there is an imbalance between supply and demand and we need to ensure we plan for the right numbers of staff to meet the service’s needs – especially in key specialties and service areas.

‘In the short term, we need the whole service to act as one – a co-ordinated response – rather than organisations acting in isolation. That will require broader use of the framework agreements than just within those organisations subject to the nursing agency rules.’