With the new agency cap rules for the NHS and the forthcoming changes to taxation for those who provide services to public sector bodies via their own personal service companies set to come into place soon are the government creating the perfect storm to add to the staffing problems faced by many NHS organisations?
Whilst most people would agree that the NHS should not be overpaying for staff the recent introduction of the agency cap rules has been criticised by many for the complete lack of commerciality used when determining the uplift from standard rates of pay. Simply adding an allowed premium (salary plus a few on-costs) on top of the band rate for permanent staff may be easy to apply and monitor but fails to recognise some very basic things that impact upon the price of interim and agency staff. One such consideration is the availability of suitably qualified and experienced staff within the locality who would be available to work for an organisation often at very short notice. For specialist roles the pool of talent from which an organisation can obtain interim support is often limited, it is even more limited when looking locally. As such many of these roles are performed by people who are prepared to be away from home during the working week. Aside from the financial costs associated with staying away from home many people in this position expect a premium for doing this and as such set their daily rates at a price they feel will compensate them for the disruption this causes outside of working hours. Add to this elements to cover for periods of non-work and other expenses and the premium for an interim will often exceed the capped rates in place within the NHS. At the same time that this is happening we are starting to see employment levels rise in the wider economy and whilst there is still much economic uncertainty it is becoming clear that the war for talent is gathering momentum. Furthermore, the day rates for interims outside of the NHS are not restricted.
The result from capped rates alone could and is causing issues for many NHS organisations. From roles being filled by those prepared to work for the rates on offer (but who often are less experienced) to roles taking longer to fill the problems are occurring now and will only increase in the coming months.
Today’s budget confirmed the changes to the rules relating to expenses and also highlighted new rules for 2017 relating to “off payroll workers”. The new rules will make public sector bodies responsible for operating the tax rules that apply to “off payroll workers”. This link goes to the technical note relating to the rules: https://dl.dropboxusercontent.com/u/87106516/ir35%20budget%20%2716%20M1007_Tech_Doc_FINAL_V3_0.pdf . These rules will remain unchanged for those working in the private sector. Again this will make many of those with transferable skills look elsewhere for work.
Whilst the government is correct in its desire to ensure that the NHS does not overpay for staff and that people pay the correct tax (except for the large corporates) it needs also to ensure that the NHS can function effectively. The NHS has and will always need a flexible workforce, at the present time there are reports on a weekly basis relating to staff shortages within the NHS and whilst some people who work through agencies and on an interim basis may look within the NHS for a permanent role as these new rules make interim and agency work less desirable (although contrary to the government’s opinion many do not do it for the money alone) many will not. With this in mind I for one would like to see the contingency plan relating to what happens after 2017 if staff numbers fall even further.