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NHS could save £78m by improving staff productivity
Apr 30, 2006 - 11:40:00 PM, Reviewed by: Dr. Priya Saxena
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“And whilst these reductions are significant, further action is needed. Based on 2004/05 figures, if all NHS Trusts reduced their agency spend to the national average, that would release around £78m for other improvements in the NHS."
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By DoH, UK,
Health Secretary, Patricia Hewitt, highlighted recommendations from an NHS Institute for Innovation and Improvement’s report, showing that £78m could be saved by the NHS by driving down agency spend and improving staff productivity.
Patricia Hewitt said “Most NHS resources are invested in staff so using staff as effectively as possible is crucial for patient care, staff satisfaction and financial efficiency. The HR function has delivered some major achievements in recent years and I congratulate you on them. Now we have a real opportunity to drive forward the productivity agenda.
“Effective management of temporary staffing costs is one of the highest impact HR changes. Nursing has made the greatest reduction in agency costs out of all staff categories as the overall agency spend is continuing to decline, down from £1.4bn in 03/04 (5.1% of pay bill), to £1.3bn in 04/05 (4.2% of pay bill).
“And whilst these reductions are significant, further action is needed. Based on 2004/05 figures, if all NHS Trusts reduced their agency spend to the national average, that would release around £78m for other improvements in the NHS."
The Institute will shortly be publishing a document "Delivering Quality and Value – Focus on Productivity and Improvement." This document will identify where to focus activity for the greatest potential productivity and efficiency gains.
The creation of an in-house ‘bank’ of staff at North Bristol NHS Trust in 2004 has achieved a reduction from an average 5,300 agency shifts per month in 2003 to under 500 by the end of 2005.
In addition Bank staff provide better continuity of care which in turn contributes to better patient satisfaction. NHS Trusts are encouraged to use the NHS’s own bank staffing organisation, NHS Professionals, or ensure their high standards of NHS employment practice are rigorously adhered to for in-house bank staff recruitment.
On top of this, the Trust saved at least £100 per shift that was covered by its bank staff rather than an expensive external agency which resulted in a £6 million save in spending on temporary staff in 2004/05 compared to 2003/03.
The Health Secretary also encouraged NHS Trusts to reduce their sickness and absence levels in order to curb agency staffing spend.
The sickness absence rate for acute trusts varies from under three percent to over six per cent across the country. Reducing sickness rates to even average levels would create savings for each trust with a higher than average rate.
- Human Resources (HR) in the NHS conference in Birmingham
National Agency Staffing Project
1. Overall agency spend is continuing to decline, down from £1.4bn in 03/04 (5.1 per cent of pay bill), to £1.3bn in 04/05 (4.2pc of pay bill). This is the lowest percentage level in 6 years.
2. The agency spend by all NHS Trusts (excluding foundation trusts) on nurses has fallen from £479m in 2003/04 to £393m in 2004/05 , an 18pc reduction. The reduction in nurse agency spend over the full period, 2002/03 – 2004/05 is £181m, a decrease of 32pc over the 2002/03 nurse agency spend (excluding trusts which became FTs in 2004/05).
3. Where the NHS uses agency staff, NHS Trusts are encouraged to only use Agencies which have signed up to the Purchasing and Supply Agency (PaSA) Agency Framework Agreements. Agencies on the agreement must comply to strict cost and quality criteria.
4. For more information on The National Agency Staffing Project use the link on this page. The National Agency Staffing Project, led by South West London SHA which was launched by Lord Warner in May 2005, has highlighted a number of NHS Trust best practice initiatives which demonstrate ways to achieve value for money and improve quality of services to patients through consistent and continuous care.
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