Breaking the cycle of avoidable agency expenditure

Agency staff expenditure is a long-standing challenge in the NHS, and trusts and health boards have predominantly focused on tackling ‘agency spend amplifiers’. Here, Ed Leonardo, Business Development Director for Liaison Workforce, looks at the four key pillars needed for reducing avoidable agency spend.

30 April 2024




Recently, I spoke at the HCSA Excellence in Supply Conference for the London and South, where I shared the stories of how NHS organisations are working in different ways to reduce avoidable agency spend, whilst increasing workforce capacity.

Across all NHS stakeholder groups, we’re aware that the healthcare financial landscape is one of huge challenge, with deficits growing and continuous cost pressures. Organisations are faced with staffing issues due to high levels of absence and turnover, which are compounded with challenges in retaining and attracting staffing, many of whom are now looking for more flexible ways of working.

This is leading trusts to use Agency Staffing to plug clinical gaps, resulting in agency usage being the largest contributor to over-expenditure in workforce costs. The recently published 2024/25 Priorities and Operational Planning Guidance states that agency spend is expected to be reduced across the NHS to a maximum of 3.2% of the 2024/25 total pay bill. However, as agency spend accounted for 4.15% of gross pay in 2021/22, and has since increased by 16%, this could prove to be a difficult cycle to break.


Agency Spend Amplifiers

Agency staff expenditure has been a long-standing challenge in the NHS throughout the last decade, and, historically, NHS trusts and health boards have predominantly focused on tackling the “agency spend amplifiers” to ensure they removed non-framework spend, improved rate control, and obtained some level of reporting.

As can be seen here, the amplifiers only really set out to reduce 10% to 15% of expenditure, and arguably does not deliver the long-term sustainable change that we are looking for – reducing overall reliance on avoidable agency expenditure.

Four Key Pillars for Reducing Avoidable Agency Spend

At Liaison Workforce, we’re currently supporting over 50 NHS organisations to tackle this problem through an approach focused on four key pillars to reduce avoidable agency expenditure:  


1. Grip & Control

  • Reduces agency expenditure by 15% to 20%
  • Time to value – 6 to 8 weeks
  • Provides significant cost reduction opportunities on medical, dental, AHP/HSS and A&C staffing groups’ pay bill.
  • Increases flexible capacity through a shared talent pool and access to national retirees bank.

For example: A Trust in the London region has realised savings in the region of £7m in just over two years, reduced reliance on agency supply, increased bank utilisation, and reduced operating costs through the adoption of our robotic automation technology.


2. Demand Management

  • Reduces agency expenditure by 20% to 25%
  • Time to value – 6 to 8 weeks
  • One single system manages substantive and temporary staff
  • Unlocks the ability to proactively deliver workforce planning and forecasting
  • Enables understanding of what the drivers of avoidable agency are
  • Provides the ability to combine accurate workforce data with productivity data
  • Reduces overall demand for temporary staffing

For example: One Trust in the West Midlands benefitted from a 50% WTE reduction in temporary staffing. This organisation is now on track to deliver a cost reduction of circa £500,000 from demand reduction in a year.


3. Retention, Absence & Turnover

  • Reduces temporary staffing expenditure by 20% to 25%
  • Time to value – 6 to 8 weeks
  • Identifies and mitigates workforce turnover risks early, including redeployment of talent
  • Reduces absence through simplified people insights and targeted actionable intelligence

For example: A Foundation Trust in the North West of England is now able to bring together fourteen different workforce data sets across six different systems to get a holistic view of their workforce on one screen, identifying root causes for demand through triangulating data sources and gaining actionable intelligence.

This organisation has benefitted from a reduction in absence by a factor of 10%, mitigating c.£3.7m in absence related costs, and has also been able to reduce turnover by a factor of 3% and avoid c.£182k in recruitment costs.

Further, an organisation in the East Midlands is now able to understand its recruitment demand up to three years in advance, as well as understanding the workforce turnover risk to the organisation. For the first year of the programme, the organisation is now on course to recoup c.£1.5m to £2m in cost benefit.


4. Productivity

  • Increase in capacity between 10% to 50%
  • Time to value – 6 to 12 weeks
  • Provides clinical pathway automation that removes thousands of unnecessary appointments and could save NHS trusts in the UK over £1billion.
  • Enables clinical care coordination that tackles the need to release clinical time, and reduces waiting lists whilst retaining the clinicians’ trust and providing an exceptional patient experience.

For example: Users in a North West London NHS Trust have benefitted from improved patient care, discharging patients 5 days sooner and avoiding over 20,000 excess bed days, leading to a capacity increase of 50%.

In the East of England, users have seen a reduction of outpatient follow-ups of more than 56,000 appointments per annum. With a programme of work spanning across 46 specialties and 180 pathways, clinical teams now have the capacity to reach patients with the most urgent clinical need quicker.

Also, Junior Doctors at a South West England Foundation Trust’s out-of-hours team saved an average of 91 minutes per shift, with 85% of users reporting improved task allocation using our task management solution.

Implementation of our modular solutions could lead to national savings of over £578million, and enable NHS organisations to break the cycle of avoidable agency overspend. They deliver consistent processes for clinical staff deployment and management to increase workforce capacity, and improve attraction and retention of staff through provision of better flexible working, whilst also providing standardised and consistent reporting mechanisms to achieve reduction goals on agency expenditure.


If any of these outcomes would benefit your organisation, I’d love to have a chat with you.

Get in touch today



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