Health secretary Jeremy Hunt has ordered a clampdown on NHS costs including a cap on staffing agency fees.
Hunt has announced new rules that will ban the use of agencies that are not on approved frameworks, set a maximum hourly rate for agency doctors and nurses and require approval for any consultancy contract worth more than £50,000. A cap will also be put on total agency spend for trusts in financial difficulty.
The Department of Health (DH) said the NHS spent £3.3 billion on agency staff last year, a £1.8 billion increase over the course of three years.
Agencies are being paid up to £3,500 per shift per doctor and the total bill for management consultants last year was more than £600 million, according to the DH.
The move follows comments made by NHS chief executive Sir Simon Stevens, who said agencies were “ripping off” the health service.
Hunt said: “Expensive staffing agencies are quite simply ripping off the NHS. It’s outrageous that taxpayers are being taken for a ride by companies charging up to £3,500 a shift for a doctor.
“The NHS is bigger than all of these companies, so we’ll use that bargaining power to drive down rates and beat them at their own game.”
Hunt said he wanted to see hospitals employ more permanent staff and trusts that needed to breach the consultancy spend cap for clinical reasons would need to get permission from Monitor or the Trust Development Authority.
Hunt also said the NHS will “collectively negotiate with suppliers using economies of scale to drive a harder bargain”.
“Hospitals currently negotiate prices for suppliers individually and as a result cannot always secure the best prices for products,” he said.
The DH said the NHS will get a £2 billion budget increase this year and a further £8 billion increase by 2020.