With the population growing and deficits getting bigger at many hospitals up and down the country, all have been told to keep an eye on costs.

Guidance released last year asked hospitals to watch their staffing levels and extend the life of machinery and equipment

But one of the biggest targets in the cost saving exercise has been agency staff.

The spiralling cost of employing agency staff, which is set to cost the NHS £4bn this year, is one of the biggest reasons for the £2.2bn overspend.

In November of 2015, Monitor and the NHS Trust Development Authority introduced caps on the hourly rates paid for all agency staff.

Since the introduction of caps in November, the limits have been ‘ratcheted down’ on 1 February and again on 1 April. Taking junior doctors as an example, their original wage cap was 150% above basic. This came down to 100% above basic in February and is now just 55% above basic.

However, recent data released by the NHS shows that trusts breached the wage caps for agency workers more than 40,000 times in a single week in March.

The wage cap rules include a clause that allows hospitals to ignore the cap on the grounds of maintaining patient safety.

Even with this clause in place, some hospitals are still struggling to attract enough medics. Last month, a hospital in Lancashire had to close its A&E department because it was too short-staffed. Hospital administrators cited difficulties emerging from the imposed wage cap as part of the problem.

A spokesperson for NHS Improvement, the body charged with implementing the cap, said that overall the measures were having a positive impact for the NHS and for tax payers. Over time, they said the agency staff bill was coming down and the NHS had saved £290 million between October and February.

They also said that as people start getting used to the new rules, they expect to see fewer cases of hospitals overspending on agency staff. NHS Improvement also expect more nurses and other healthcare staff who have migrated to employment agencies to go back into the NHS.

In this way, the body hopes to build a more sustainable NHS with a more reliable long-term workforce. But already there are signs that this will be difficult.

We only need to look at the dispute and the strikes surrounding the new junior doctors contract to see how far the NHS has to go.

Agency workers still have an important role to play in a flexible and fast-changing healthcare labour market. They will be here to stay.

For more information call the team at Umbrella.co.uk 01625 546 610 or email team@umbrella.co.uk