Avoiding expensive agency charges

Using employment agencies can be costly. From 1 April all agency procurement is to be via approved framework agreements. Katy Horner from DAC Beachcroft looks at the simple steps NHS trusts can take up to and beyond 1 April to avoid getting caught out.
 
The centrally imposed cap on the rates agencies can charge trusts is already helping reduce the phenomenal NHS agency staffing bill which reached £3.3 billion last year, more than the cost of that year's 22 million A&E admissions combined.
 
The cap is designed to ensure that agency staff will be no better off than NHS colleagues, putting an end to unscrupulous agencies charging three times what NHS clinical staff might earn for a normal shift.
 
However, whilst many trusts will come under increasing pressure to eliminate agency spend altogether, this will not be realistic in the short to medium term. Agency staff will therefore continue to be a vital resource to plug workforce gaps all over the NHS.
 
It is relatively common, and is likely to remain so, for good agency workers (clinical or otherwise) to be ‘poached’ by the organisations they are placed with and make the transition to being a permanent, directly employed staff member.
 
However, this can be a costly exercise, as many trusts are finding to their detriment. Many of them sign up to agencies' own terms & conditions, which can contain onerous charging provisions that leave trusts exposed to significant and unexpected financial liabilities. But from 1 April 2016 agency procurement for all staff groups must be via frameworks approved by Monitor and the TDA.
 
Against the background of reducing NHS spend, it is worth being alive to the fact that an increasing number of agencies are not hesitating to litigate with trusts over transfer fees, placement fees, cancellation fees and the like. For instance, we have seen agencies claim introductory fees relating to placing contractors in different roles to those for which their CVs have been sent; introductory fees when there is a significant question mark over whether the agency even introduced a member of staff; transfer fees arising from supplying temporary workers; and cancellation fees for aborted recruitment exercises.
 
Lack of robust contractual arrangements between trust and agency will inevitably make these sorts of claims difficult for trusts to defend. Being able to push back strongly will be determined by the wording of the contracts trusts have with agencies. A timely review could save trusts many thousands of pounds.
 
In the run up to April, a sensible first step in regaining an element of control over relationships with agencies would be to audit the agencies you use and the contracts you have in place with each. Typically, you might find a whole host of contractual arrangements have been entered into over the years and that now is a good time to rationalise those arrangements.
 
A practical second step is working out who within your organisation is signing up to agreements with agencies. Again, typically, it is likely to be a wide variety of people, some of whom will not have authority to do so. It would be prudent to ring-fence a small group of individuals, making it clear to both the wider organisation and the agencies themselves, that it is this group alone who has authority to contract with them.
 
Finally, make sure you do not have contracts in place which are skewed in favour of the agencies when it comes to the fees that can be charged. Critically assess what your trust is, or is not, prepared to sign up to and then ensure this is reflected in your contractual agreements.
 
  Katy Horner, Partner, Bristol office, DAC Beachcroft