Agency Staffing – Demand Management Richard Humble – LPP workstream lead Pia Larsen – NHS lead LPP member event 25 th

1. Agency Staffing – Demand Management Richard Humble – LPP workstream lead Pia Larsen – NHS lead LPP member event 25th March 2014

2. Agency Staffing - Market Management • Financials • Pay consistency • Pay rate competitiveness • Patient safety • Pre-award audit • Annual file audit

3. Market Management vs Demand Management

4. Spend at trust level London trusts on average each spend around £6m a year on agency staff. But wide variation – one trust spends 12% of total workforce expenditure on agency staff – another (outside of London) reports 0%.

5. Demand Profile - Nursing 2012-13 = £106m 2013-14 = £130m

6. Cost comparison Band 5 general nurse (London) £19.67/HR £26.38/HR

7. What is it that we are buying? • Paying more for the same resource – no additional skills or experience • compared to substantive member of staff of same grade • Agency workers need induction and familiarisation • Evidence of lower quality care where there is an over-reliance on • temporary staff • Issues around continuity of care • Impact on morale for substantive members of staff

8. Bank supply comparator - Nursing Based on existing demand, by transferring nursing supply from Agency to Bank we could save £40m across London or employ almost 2,000 additional nurses

9. Challenge £2bn in savings by end of 2015/16; identifies agency spend as one area where significant savings are possible Targets 25% saving on agency staff

10. Savings Challenge

11. Managing agency spend – scope & priorities Permanent Staff Staff Bank Agency Staff 3. Unit cost management … does not necessarily result in any real savings 1. Demand management … reduces or contains total spend. Effective Solutions here are likely to yield the biggest savings. 2. Cost avoidance … reduces unit costs compared to agency supply Trusts may undertake pieces of work to reduce unit costs of agency supply – but this is still the most expensive supply route and without demand management will actually increase overall costs. Often seen as corporate project(s) outside the scope of procurement Often seen as procurement projects Effective agency management Direct engagement (VAT saving) Permanent staffing complement Effective staff bank Effective e-rostering Direct engagement (VAT saving) may appear to offer a “saving” but is still a more expensive supply route compared to the staff bank where VAT is not payable. Where an internal staff bank cannot fill a shift at AfC rates – demand flows through to more expensive agency supply. Where this is done at the last minute this may create risks of pay rate escalation. Open staff vacancies and lack of robust e-rostering procedures feed demand for temporary staffing.

12. Workforce Management • Is there a policy on management of temporary staff that has been • agreed at corporate level and communicated? • Is it clear that permanent members of staff cannot take additional • shifts via an agency at their own trust? • Are all staff automatically enrolled onto the bank? • Is there an absence/sickness management process in place? • Is there an agreed and appropriate staffing complement? • Are there procedures to identify (and forecast) upcoming vacancies • and to recruit permanent members of staff within a reasonable timescale?

13. E-rostering • Are shifts being filled months in advance? • Does the roster remain fixed? • Is it being used – rather than spreadsheets? • Does it include all staff groups – doctors, nurses, AHPs, admin? • Does the e-rostering system link to the Bank system to avoid double keying? • Can staff allocate themselves a bank shift?

14. Managed Staff Bank • How much notice does the Bank receive to fill a shift? • Is Management Information available to monitor performance? • Is the Bank appropriately skilled and resourced to deliver? • Are there sufficient numbers on the Bank? What is the recruitment • process? Are staff automatically enrolled? • Is there a procedure in place to deal with users who regularly request • shifts at short notice?

15. Optimum staffing model • At a point in time now whereby trusts (if they have not already done so) need to look at effectively managing agency spend and demand management across the entirety of the system – not just looking to frameworks to reduce unit costs. We should be able to develop (and implement) a standard operating model to manage agency spend: Temp staff requirement Demand management Supply management • Long and medium term • Effective policies and sanctions on use of temp staff • Clearly defined staffing establishment • Filling permanent vacancies as quickly as possible • Use of long-term contracts as appropriate • Effective e-rostering for nurses and doctors 90% spend • Medium term- Bank • Building effectiveness of Bank (internal and external recruitment) and efficient structure and process • Target setting and active performance management of the Bank 8% spend • Short term - Agency • Controlling unit costs (pay rates and commission) via SLA or Master Vend 2% spend

16. Challenges • Not simply a procurement issue – requires corporate commitment • If we don’t get to grips with demand we are potentially creating a market management • challenge / pay rate inflation as non NHS organisations are able to set pay • If we don’t get it right it has the potential to threaten the financial • sustainability of some trusts

17. Return on Investment • For every £1 reduction in agency spend you get 30p back (based on simple transfer of staff from agency to bank). • This means a 10% reduction on an average agency spend of £6M – saving is £180,000. A 100% reduction in agency staff is a saving of £1.8M. • This does not include additional efficiency savings from better resource management of permanent staff • Positive impact on patient care

18. UCLH Video – case study

19. Prize Maintaining front line staffing levels Reducing costs Improving patient care

20. What happens next? • Developing a diagnostic tool and Action Plan to help trusts progress actions to reduce agency spend. • Any volunteers?