CEO Blog: What is happening with agency rates?

By Jane Couper, Novello Healthcare CEO & Co-founder

It’s been a long 12 months for anyone working in the agency world. Let’s go back a little bit to understand where we are now. 

In the months following the pandemic, the NHS was given a budget to help deal with getting services back on track and the backlash of the pandemic. This meant agency work was in abundance and agencies were able to offer higher rates, as their services were much in demand. 

In 2023 a then Conservative government announced the end of the pandemic, and with it the end of the additional budget. NHS leaders were told that there was no budget left, and that they would need to cope with the winter of 2023/24 without the usual uplift in staffing budgets that they receive to cope with winter pressures. 

NHS trusts were given no choice but to cut back on agency, and agency rates. They were given a clear instruction to remove all “off-framework” activity by July 2024 and in the most parts, they have achieved this (Novello Healthcare is a proud “framework” partner to the NHS so this on its own, didn’t affect us). 

It was important for the sustainability of the NHS that they gained control over agency spend. The frameworks were originally founded to do just this – control both the compliance and charge rates of agencies that were spiralling out of control. They have struggled to do this over the years, but the pandemic changed the landscape and the financial pressures following the initial response, alongside international recruitment drives have successfully reduced all agency spend, including framework agencies. 

In addition to removing all off-framework spend, and extra sign off processes in place for any use of framework agency, trusts have been told to ensure all agency spend is done so at ‘capped rates’. 

What are capped rates?

The NHS has hourly rate caps for agency nursing staff to limit how much it spends and to encourage staff to return to permanent or bank positions. The caps are 55% above basic pay. Trusts can override the caps for exceptional safety grounds, such as severe shortages or a sudden increase in demand. This is called “break glass” provision. Trusts must report shifts that exceed the cap to NHS Improvement weekly. 

What is Novello doing to help? 

Having spoken with hundreds of our members over the last 6-12 months, we have decided that it is better to ensure we have shifts even if the rates are lower than we would like, than to have no shifts at all. In all cases, our choice when onboarding new hospitals is to either sign up to the rates they have requested we supply at (normally capped), or we don’t onboard with them at all. 

Our priority is to have as many shifts as possible in our app so that people have work, as opposed to no work at all. We are in communication with over 200 trusts across England as we seek to onboard each and every NHS trust to our app. 

Will the nursing agency rates increase? 

Simply put, we don’t know. Labour have spoken of their intention to reduce waiting lists, and they will need to invest in staffing to achieve this. However, they may achieve this at the current capped rates and just push a greater volume through at these rates, or they may allow trusts to break glass under the guise of severe staff shortages. 

Why should an agency nurse choose Novello?

The Novello app retains as much money as possible between the NHS and healthcare professionals. Many of our processes are automated through the app, allowing our agency fee to be less than 50% of the average fee charged by traditional recruitment agencies.

That said, our team are passionate about ensuring you still feel supported when using the app, or should you have a bad day at work and need a chat – the app can’t do that but we can!

Will the budget change anything? 

It might do. We are waiting to see if there are any announcements in the budget referring to the NHS budget for winter pressures. In previous years, with the exception of last year, the NHS has had a 2% increase in staffing budget, allowing greater use of agency to cope with winter pressures. If this happens, you will see an increase in shifts in the Novello app, so keep your availability and preferences up to date, and notifications on to hear this first! 

As always, Novello is committed to providing you with the best possible agency experience.