Health and social care secretary Wes Streeting unveiled strict agency spending limits in November and ordered trusts to reduce their spend on agency staff by 30% in the short-term so more money could be reinvested in the frontline and the wider NHS workforce.
Latest figures show spending on agency staff has already fallen by almost £1bn in 2024/25.
Streeting and NHS England chief executive Jim Mackey have written to all trusts and ICBs today (2 June) urging them to build on this progress and ultimately eradicate agency spending altogether. If the government does not feel further progress has been made by the autumn, it will consider taking further legislative action.
Health minister Ashley Dalton said: ‘The taxpayer has been footing the bill for rip-off agencies for too long – while patients have languished on waiting lists and demoralised staff faced years of pay erosion.
‘That's why we are pledging to eliminate this squander, and through our Plan for Change we are making major progress and seeing a radical reduction in costs.'
The NHS spent £3bn on agency staff in 2023/24, DHSC figures reveal. Recruitment agencies have charged NHS trusts up to £2,000 for a single nursing shift, thanks to the 113,000 staffing vacancies across the service.
A new delivery group is being established across the DHSC and NHS England to monitor progress on tackling agency spending, and ensure trusts are taking robust action.
Trusts were previously ordered to reduce bank use by at least 10%, on top of strict agency spending limits across the health service, now they have been told to evaluate them against the local market to ensure they are not more than the average equivalent agency rate.
Elizabeth O'Mahony, chief financial officer at NHS England, said: ‘The NHS is fully committed to making sure that every penny of taxpayers' money is used wisely to the benefit of patients and the quality of care they receive.
‘Our reforms towards driving down agency spend by nearly £1bn over the past year will boost frontline services and help to cut down waiting lists, while ensuring fairness for our permanent staff.'
Nicola McQueen, chief executive at NHS Professionals, said: ‘We strongly welcome today's bold and progressive workforce policy announcement from the Secretary of State to significantly reduce external agency spending and put more investment back into patient care.'
She added: ‘Last year we displaced over £680m of external agency fees across NHS trusts and healthcare organisations, providing more than 40 million hours of patient care. We look forward to working closely with our NHS client trusts and partners to deliver even more savings across the NHS.'
