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A Scary Letter

NHSI sent out its latest letter to provider CEOs, Chairs and DoFs on 17th October urging them to do more to curb spending on temporary resource, and outlining new measures and controls to restrict how interims are hired. It’s the latest in what seems like a long series of messages that have been drip fed into the market over the last 16 months, since Jeremy Hunt initiated the clampdown on NHS agency spend in June 2015. It’s also indicative of a climate which is growing increasingly hostile against interim managers. Once the interim was almost the default solution for any resource issue or operational problem, now through a combination of bad press and policy tools from the centre they are being increasingly avoided. As one candidate said to me last week, “I used to be an interim, nowadays I’m feeling increasingly like a leper”.

The letter does point to some positive results since price caps were introduced 1 year ago. Over that period the sector has delivered reductions in agency spend of over 600M, but spend on temporary staffing is still running at 250M / month, which is 3B a year, and still well above the 1.8B it was costing the NHS in 2011 / 2012. So it’s not enough, and the letter states that “we need to bring to an end unacceptable behaviour such as paying over the odds for very expensive individuals, or relying on the same agency staff for very long periods of time.” No one can disagree with that sentiment, anomalously high rates were becoming increasingly common and as a recruiter I have absolutely benefitted from yet another extension to an interim’s contract, because an organisation has not got its house in order to recruit to the permanent post, or is far too comfortable with the interim covering to bother trying. What the current climate is certainly doing is encouraging organisations to change their hiring behaviours, and it’s evident to me that organisations are trying harder to resolve a resource problem instead of just picking up the phone to an interim agency to get someone in for next Monday.

Most worryingly of all, the letter states that the NHS “should be aiming to radically reduce and ideally eliminate reliance of agency managerial staff and use interim NHS solutions”, and that NHSI now need to give prior approval to any trust that wants to hire an interim a cost (including agency margin if there is one) that exceeds 750 / day. I was initially alarmed at this, NHSI already approve all interim executive appointments, but afc 9s, 8ds and sometimes 8cs could cost more than 750 / day, particularly if they come with an agency margin. Would this now mean candidates operating at these sorts of levels would now have their future prospects increasingly in the hands of the regulator?

A few days letter, NHSI published a document called “interim agency very senior manager approvals process” and the guidance is explicit in saying “for this approval process, ‘very senior manager’ is defined as all non-clinical, nonmedical posts on local terms and conditions above band 9 Agenda for Change”. So in effect nothing changes. NHSI already had the right of veto on exec or VSM level appointments, for belt and braces they are now making sure there is a day rate threshold aswell. The new rules mean a VSM level interim could in theory slip under the radar if their total cost is less than 750 / day, but in reality VSM level interim rates are usually well above 750 / day. The thought crossed my mind that 8d and 9 interim appointments could exceed 750 / day and NOT need approval from NHSI because they are not VSM posts, I have asked around and emailed NHSI about this, but have not yet had a definitive answer.

Also published was a “very senior manager remuneration approval form” which looks very similar to the business case document issued by NHS England over the summer, which CCGs and CSUs must submit to justify any planned recruitment of interim managers exceeding a cost of 600 / day. The approval form has a field asking the submitter to state the name of the proposed candidate, so we would assume that trusts are expected to do their recruitment, find their candidate and then seek permission, all of which could add up to lots of wasted time if the request is ultimately rejected.

Even for trusts contemplating hiring an interim manager, the hoops are getting more plentiful and tougher to squeeze through. As things stand a trust wanting an interim has to: demonstrate the efforts they have made to hire a secondee from the same STP area, try and recruit at a depressed price cap rate, do the actual recruitment, submit a business case to justify the appointment, and potentially as of next April independently assess whether the interim is in or out of scope of IR35. No wonder demand is weakening, trusts are either starting recruitment processes that fall at any one of the steps above, or frankly they can’t be bothered with the rigmarole of trying.