Agency spend in Wales peaks at over £500 million

Liaison Workforce

According to a Freedom of Information (FOI) request from the Welsh Conservatives, over £500 million has been spent on agency staff in the Welsh NHS in the past four years (2016-2020). Sizeable as these figures are, it only covers six of the seven health boards in Wales, with Cardiff and Vale University Health Board yet to disclose its costs, so the total is likely to be even higher. Almost £245 million (nearly 50% of the spend) went on medical agency staffing costs.

Andrew RT Davies MS, the Shadow Minister for Health, Social Care and Sport, said: “Spending large funds on agency staff is a short-term solution, when NHS Wales needs a sustainable, long-term one. More than half a billion pounds would have been better spent on recruiting, reskilling and – crucially – retaining essential health professionals. It is key that we not only equip staff with the necessary tools but also retain them – and not just for the short term.”

NHS Wales have an agency and temporary workforce spend issue that is proving difficult to reduce and control. There will be further expenditure, over and above the agency costs, on staff sourced through internal banks, waiting list initiatives and overtime. This all needs measuring and controlling.

Why is agency spend so high across NHS Wales?

In 2019-20 alone, it was forecast that over £150 million would be spent on agency staff in Wales, representing an 18% increase on the previous year. At Cwm Taf University Health Board, nursing and midwifery agency spend more than doubled between 2018/19 and 2019/20 – rising from over £7 million, to almost £17 million. But why?

NHS Wales employs over 98,000 people and is the largest employer in the country. It often relies on agency staff to supplement its substantive workforce when key posts become vacant or when employees are sick or on holiday.

Factors which are contributing to the rise in agency spend include:

• a rise in hourly rates of pay charged by agencies
• increase in demand for services e.g. ageing population, winter pressures, Covid-19
• skill shortages
• difficulties recruiting and retaining staff
• meeting the requirements of the Nurse Staffing Levels Act (Wales) 2016
• people choosing to work through agencies for a more flexible work/life balance.

What is NHS Wales doing to address the rising spend?

Nesta Lloyd-Jones, Assistant Director of the Welsh NHS Confederation, responded to the recent figures from FOI request. She said: “We are under no illusions that agency spend does need to be reduced. Health boards and trusts across Wales are continually looking at ways they reduce agency costs and work closely with Health Education and Improvement Wales to do so.”

However, there is currently no national analysis of just how much each of these factors has contributed to the increase in agency spending. NHS Wales needs access to consistent and comparable data at an all-Wales level to track the volume, nature and cost of agency staff used. Liaison Workforce presented an outline business case in 2019 to the Welsh Government to improve the control, visibility and reporting of temporary workforce spend to deliver financial savings to the Welsh NHS, building to an estimated £18 million per annum, compared to current spend levels.

Read more about Cutting the cost of temporary staff in Wales.

How can Liaison Workforce help you reduce your NHS agency spend?

At Liaison Workforce, we work with NHS health boards and trusts to share data-driven insights and develop ground-breaking technology to support a comprehensive range of programmes for all areas of workforce management including collaborative working, workforce optimisation and workforce advisory services.

Judith Shaw, Managing Director at Liaison Workforce, said: “We partner with health boards in Wales to drive agency spend down via Agency Direct Employment, and encourage the implementation of temporary staff banks to fill vacancies. We’ve saved the NHS in Wales over £4 million through ADE placements in the past. By implementing an All Wales initiative, the savings would run into tens of millions every year.”

Our Agency Direct Employment (ADE) service helps NHS organisations facilitate direct fixed-term contracts with workers sourced and vetted by agencies. This provides the NHS health board or trust with more transparency over who it employs and over what period. During the fixed-term contract, the employment relationship is solely between the trust and the worker, affording greater control for both parties.

In its first year of using Liaison Workforce’s TempRE service for Allied Health Professionals (AHPs), Hywel Dda University Health Board increased ADE take up by 150% and saved £148,633. Download the full case study.

To find out more about how we’ve reduced agency spend for our NHS clients, please get in touch via [email protected].