Almost £80m could be saved by the NHS by driving down agency spend and improving staff productivity, health secretary Patricia Hewitt has said.
Speaking at the HR in the NHS conference in Birmingham yesterday, Hewitt underlined the potential savings to be achieved through managing staff more effectively.
“Most NHS resources are invested in staff, so using staff as effectively as possible is crucial for patient care, staff satisfaction and financial efficiency. Effective management of temporary staffing costs is one of the highest impact HR changes,” she said.
The NHS spent £1.3bn on agency staff last year, an equivalent of 4.2% of the total health service pay bill.
Hewitt said that if all NHS trusts reduced their agency spend to the national average, that would release about £78m for other improvements.
The health secretary also encouraged NHS trusts to reduce their sickness and absence levels to curb spending on agency staff.
But her comments were criticised by the Recruitment and Employment Confederation. Tom Hadley, its director of external relations, said the savings that Hewitt highlighted were false.
“Reducing external spend on agency staff produces some nice figures. However, the vast majority of the £78m ‘saving’ is made up of staff salaries, NI contributions, holiday pay and so on,” he said.
“If these staff are recruited through internal staff ‘banks’ these costs remain. It simply is not true to suggest that £78m could be saved through reducing the use of agency staff alone.”
See next week’s Personnel Today for coverage of the HR in the NHS conference.