Brexit and the challenge of NHS recruitment

The current recruitment problems starring the NHS in the face are multifaceted. Nick Bowles, of the Association of Professional Staffing Companies, focuses upon just one of the factors - the UK’s impending withdrawal from the European Union

It’s now been 18 months since Monitor, now part of NHS Improvement (NHSI), introduced pay caps in an attempt to curb spend on staffing. Since then, the controversial measure has been hailed as a success by NHSI, with the public body reporting that 40 per cent of trusts have reduced spend on non-permanent staff by more than a quarter since October 2015. However, behind this veneer of victory, UK hospitals continue to face significant and ongoing challenges around recruitment, and with Brexit on the horizon, the seas look set to get rougher.

The latest figures from NHSI indicate that ‘agency controls’, including price caps on agency workers, have saved the NHS an impressive £1 billion since they were introduced in October 2015. Much of this saving can be attributed to the demise of rogue ‘off framework’ suppliers and the extortionate rates they demanded.

However, these savings have also come at a cost. A survey by NHS Providers, published in December 2016, found that only just over a quarter (27 per cent) of NHS trust chief executives were confident they had the right staff numbers, quality and skill mix to deliver high quality healthcare for patients. For this reason, trusts continue to recruit outside of NHS approved frameworks in the interest of patient safety.

A recent freedom of information request by a regional newspaper, The Star, for example, found that Sheffield Teaching Hospitals has spent more than £90 million on contractors over the last four years – the equivalent to the average annual salaries of nearly 4,000 nurses. Furthermore, the top five paid locums alone cost the NHS over £5 million in 2015-16. NHSI estimates that £300 million per year could be saved if all medical locums charged rates within the set price cap.

Concentrating on the cause
The truth is that while the introduction of measures to decrease staff spend have no doubt been successful to an extent, they are designed to treat the symptom of the recruitment crisis rather than the cause. The Royal College of Nursing (RCN) estimates there are currently as many as 24,000 open vacancies for nurses across the UK and our recruitment consultancy members continue to report dire skills shortages across the healthcare arena. We must address this dearth of talent at the root before we find a solid and sustainable solution to ongoing skills shortages.

In recent years a failure to pipeline future talent has created a landscape where the NHS has relied on skills developed overseas to keep the wheels in motion. However, the UK’s decision to leave the European Union looks set to further impact access to expertise. According to data from the House of Commons Library, over 200 different nationalities are represented within the health service with immigrants accounting for 12 per cent of NHS staff in England. Just over 60,000 of these are nationals of other EU countries and of staff who joined the NHS in 2016, nine per cent were from the European Union.

Although we are yet to witness the UK’s final deal with the EU in terms of freedom of movement, the number of EU nationals registering as nurses in England has dropped by 92 per cent since June’s referendum. Furthermore, freedom of information responses compiled by the Liberal Democrats indicate that 2,700 EU nurses left the health service in 2016, compared to 1,600 in 2014, representing a 68 per cent increase. And it’s not only nurses who seem to be reconsidering their options. The British Medical Association (BMA) recently reported that 42 per cent of European doctors are thinking about quitting the UK following Britain’s vote to leave the EU. While the General Medical Council (GMC) has found that 60 per cent of doctors from the EEA said they were considering leaving the UK at some point in the future. Of those professionals, 91 per cent said the Brexit vote was a factor in their considerations.

Looking forwards, questions around free movement will have to be answered before trusts can get a true steer on future workforce needs. The recruiters we work with report that trusts are dreading a scenario where European nurses leave Britain, and British pensioners now living overseas simultaneously return home. Paul MacNaught, director at the Department of Health, recently told the Health Select Committee that it is estimated that the presence of 190,000 British pensioners in other EU countries saves the British health system about £350 million every year. The RCN has called for European nurses to receive indefinite leave to remain post Brexit over serious concerns over numbers – there is little indication how likely this is to come into fruition.

Staff engagement
Aside from an apparent drop in morale amongst professionals from EU countries since the referendum, the health service is also contending with wider issues around staff engagement. A one per cent cap on pay rises is one such example, with the TUC estimating that nurses face losing more than £2,500 in real terms by 2020 when inflation is taken into account.

Our members tell us that many nurses boost their pay from substantive roles with contract work, which is why proposed new rules preventing permanent NHS staff picking up extra shifts in other trusts sparked fury throughout the sector. NHSI had hoped that the ban would cut a further 25 per cent from trusts’ agency worker bills. The plans were withdrawn at the eleventh hour.

As Michael Ellis, director at specialist healthcare recruiter, MSI Group, explains: “At least 60 per cent of professionals working in this way also have a substantive post. This proposal, which was passed without consultation with nursing bodies, would have decimated access to talent to the detriment of patient safety. It’s a good thing the proposal fell down.”

Ellis’ frustration at policy introduced without necessary consideration of the potential ramifications is echoed throughout the healthcare recruitment sector. The recent publication of long-awaited final legislation on off-payroll working in the public sector, or IR35, is one example. Public sector end clients are now responsible for determining the status of a contractor’s assignment to supply services through a Personal Services Company (PSC) or LLP, as outlined in the Finance Bill 2017. Those who are deemed to be ‘inside’ of IR35 are now taxed at the same rate as an employee.

The recruiters that we work with tell us that doctors are increasingly renegotiating pay rates to compensate for this erosion from IR35. While nobody can fault efforts by NHSI to slash excessive spend on frontline staff, the reality is that there is simply not enough talent available - and willing - to work for the NHS on a permanent basis. Professional recruitment consultancies are playing a vital role in ensuring that the health service continues to meet safe staffing levels – often parachuting in valuable expertise at very short notice.

Moving forwards, NHSI is introducing new, more detailed, reporting standards on staffing in an attempt to pinpoint areas of excessive spend. These are to include details of the ten longest serving agency staff working during the reporting period, the highest cost agency staff and details of all shifts worked above £120 an hour, with confirmation of CEO sign-off.

However, while access to talent is scarce, the market will always determine rates which can be achieved. The upcoming election has already sparked debate around the recruitment and retention of healthcare professionals, with Labour pledging to lift the existing cap on pay rises while reintroducing student nurse bursaries to boost talent pipelines. The Conservatives, meanwhile, say that a good deal with Europe will enable us to inject significant and much needed funds into the NHS once we have left the union. While we are yet to see the outcome of this dialogue, one thing is certain – the NHS’s ability to access and retain talent must be high on the agenda of Brexit negotiations and election manifestos alike.

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