Innovating Healthcare Recruitment


NHS Price CAPS – Solving The Problem

2nd November 2018 | Posted in Blog, Nursing, Recruitment | Tags: , , ,

NHS price caps are a controversial topic. Many professionals agree that the current cap system isn’t working. In 2015, shortly after the caps were introduced, it was reported that the caps were breached over 50,000 times a week. However, there seems to be no alternative solution to ease financial pressures on the NHS while ensuring trusts get the staff they need to provide patient care.

The caps were first applied in 2015, when a new NHS plan called ‘agency rules’ was introduced. However, NHS price caps have become increasingly stringent since then, resulting in potentially unsafe staffing pressures on trusts around the country, unrealistic expectations from NHS Seniors and added pressure to front-line staff.


In theory, NHS price caps apply to the total amount that a trust can pay per hour for an agency worker across all departments. The agency rules set by NHS Improvement states that trusts should not spend more than the price caps stipulate, except in exceptional circumstances where a patient’s safety is in danger; this is referred to as the “break glass” provision.

This “break glass” provision is used by the NHS every minute of every day because the caps don’t work. They don’t consider or care for the cost of migrating specialist staff around the UK, they don’t offer rewarding and fair renumeration for the work completed by specialist healthcare professionals and they don’t factor in the costs of outsourcing stringent pre/post-employment checks required by the NHS before a healthcare professional can set foot in its grounds.


The NHS price caps are meant to apply to all healthcare recruitment agencies who provide agency workers to NHS services in any speciality or department. The price caps also apply to agency workers who are contracted on a sessional or fee-for-service basis.

The new Agency Rules document published by NHS Improvement in 2015 and again in May 2018 states that NHS price caps always apply when:

There are some circumstances when NHS price caps do not apply, such as when staff are employed by a trust on a fixed term contract. The caps are not applied to bank workers, permanent staff and overtime payments – does that mean there is no interest in the cost of bank workers?


The 20% saving by using bank, claimed by NHS Improvement, doesn’t consider the cost of creating and maintaining the in-house bank. Derby Teaching Hospital spent £820,000 on additional costs including human and infrastructure resources to operate the trust bank (FOI data).

NHS banks lack the expertise and compliance management experience of agencies. Banks only have knowledge about resourcing challenges in their immediate area, whereas agencies have an overall nationwide picture enabling them to allocate resources. NHS Improvement have trained banks, but the reality is they are understaffed, overworked and their training has left a ‘computer says no’ attitude. A joined-up approach between bank and agency is necessary and needed.


There are benefits to NHS price caps and agency rules including tackling high-cost agencies, removing unregulated ‘off contract’ agencies and preventing them from charging for a Nurse in line with the price of a Doctor. However, the framework is not without its problems. Several steps have been taken to reduce staff spending before and have led to the current staffing crisis. These measures have included:

In 2018, the major risk we see is that NHS price caps fail to address the underlying staffing issues faced by many trusts. For circa 30 years, healthcare organisations have relied on agencies to supply temporary staff to fill vacancies. This is because they cannot recruit enough permanent staff when they need them, such as at the last minute or due to a lack of commercial experience. This has led them to come to rely on expensive suppliers.

The danger is that healthcare organisations will simply not be able to get the staff they need to provide safe care to patients. The new, more stringent caps and agency rules do, at times, inhibit the agency industries ability to be agile, proactive and fast with regards to meeting the demands of the front line. These controls on agency spending should only be a smaller part of a more comprehensive workforce strategy to ensure NHS trusts can recruit the staff they need.

There are also other issues to consider. These include costly biased vendors, the impact of cap overspend, disguised renumeration, the existence of off-contract agency supply, and staff bank costs. The issue of the framework for approved agencies being declined when they ask to join a hospitals agency cascade of the supply chain is also a significant problem. These are all genuine battles and issues out there in the agency field, but what is the solution?


NHS price caps have served their purpose to a degree but not solved the situation in its entirety. The ‘case by case’ approach is far more relevant to healthcare recruitment because Cardiac Thoracic Scrub Practitioners, Echocardiographer or Chemotherapy Specialist Nurses are hard to come by and verge towards the national shortage category. Taking a case by case approach helps to address such hard to fill roles by giving the hospital some flex in regards to budget. Caps take a one size fits all approach, which is a key reason why they have failed. The results and reports suggest that caps should be reinvented in line with an approach that considers the vast complexities associated with healthcare recruitment and should be implemented in addition to proper workplace planning measures and increased training spaces.

However, this is not the agency industry’s problem but a problem for the NHS. The idea should not just be to reduce agency spending to impossible price positions, but more importantly to ensure there are no gaps in staff rotas due to the national shortage of substantive staff. The trouble is, the shortage of substantive staff is only fuelled by spending and training cutbacks, which are becoming more stringent year-on-year. More flexible career options, improved staff morale and a pay rise may be part of the solution, with a greater number of healthcare professionals changing careers and taking part-time, overseas, private or out-of-hours positions, with an increased number taking early retirement.

It’s important to conclude with some context and not lose sight of what the agency/NHS partnership actually is. The NHS asks the recruitment industry for help to deliver temporary and substantive workers, which translates to circa 4/8% of its 1.7m workforce. When you look at it like this, it does put it back into perspective, right?

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