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Reforms delivered through Plan for Change deliver mammoth NHS savings – with funding going to better patient care and staff pay
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Major milestone in government pledge to completely eliminate all spending on temporary NHS agency staff
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Health Secretary and NHS England Chief Executive will consider legislative action if further progress not made
NHS patients and staff are benefiting from an almost £1 billion boost for the frontline, as a government crack-down on rip-off temporary staffing agencies delivers unprecedented savings.
The Health and Social Care Secretary Wes Streeting announced strict agency spending limits last 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 £1 billion in 2024/25 – a huge reduction which has helped funding go towards improving the quality-of-care patients receive, helping to reduce waiting lists, and enhancing safety – as reducing reliance on agency staff has been shown to decrease clinical incidents.
The savings are part of a package of reforms delivered by this government which have collectively allowed above inflation pay rises to all NHS staff, including resident doctors and nurses, this year to be fully funded.
The Secretary of State and NHS England Chief Executive Jim Mackey have today written to all trusts and integrated care boards (ICBs), 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.
We’re already backing our health workers with above-inflation pay rises and now, nearly £1 billion is being reinvested back to the frontline, getting patients off waiting lists and putting money back into our workforce’s pocket.
The NHS was forced to spend a staggering £3 billion on agency staff in 2023/24, money that could have been used to tackle record waiting lists and improve patient care. 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.
The government’s laser focus on reducing waste means all NHS workers, including doctors and nurses, will receive real terms pay rises for the second year in a row, fully funded from central budgets.
It is funding a pay rise of 4% for consultants, specialty doctors, specialists and GPs, with dentists also receiving a contract uplift to increase their pay.
Resident doctors will see their pay rise by an average of 5.4% (a 4% rise plus a consolidated payment of £750) and we expect the average full-time basic pay of a resident doctor will reach about £54,300 in 2025-26. Agenda for Change (AfC) staff, which includes nurses, health visitors, midwives, ambulance staff, porters and cleaners will see their pay rise by 3.6%. The starting salary for a nurse will now be around £31,050, up from around £27,050 in 2023.
A new delivery group is being established across the Department of Health and Social Care 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 – NHS staff who work temporary shifts at hospitals – by at least 10%, on top of strict agency spending limits across the health service. They have now 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 £1 billion 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.
NHS Professionals was created with the core purpose of reducing the NHS’s reliance on expensive external agencies. NHS Bank services are transforming workforce deployment, boosting productivity, and driving substantial cost reduction across the NHS.
Last year we displaced over £680 million 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.
