Safe staffing in the NHS comes at a cost

When the Care Quality Commission suggested in its recent State of Care report that ‘safer, better care does not necessarily cost more’, the inclusion of the word ‘necessarily’ was  important.

In our report, Financial failure in the NHS, we found that taking NHS trusts out of special measures as quality of care improves may come at the cost of increasing deficits, as many trusts invest in additional nursing staff to drive up quality. We cited examples including that of George Eliot Hospital NHS Trust, which ended 2013/14 with a deficit of £10.2 million against a plan of £7.9 million, and was forecasting a further £12 million deficit for 2014/15, based on ‘continuing cost pressures related to additional capacity used and higher than planned levels of agency staff’ (although in the end, the trust achieved a surplus of £0.4 million in 2014/15, following support from the Department of Health amounting to £12 million). For 2015/16, the trust’s deficit is forecast to be even higher, with a revised financial plan to deliver a £13.9 million deficit.

Likewise, between 2013/14 and 2014/15 (including a year in special measures between July 2013 and July 2014), Basildon and Thurrock University Hospitals NHS Foundation Trust moved from forecasting a year-end surplus of £0.1 million and ending 2013/14 with an actual deficit of £9 million, to a deficit of £23.8 million in 2014/15. For these trusts, it would appear that the only way to return to acceptable levels of quality is to invest in staffing.

A recent analysis by The Independent of the Care Quality Commission’s inspection reports of acute hospitals from 2014 and 2015 found that, of 89 hospitals, 68 highlighted concerns about being short-staffed on one or more wards. This is not an issue limited to those in special measures. But safe staffing comes at a cost, particularly when gaps in some staff groups (especially nurses) mean that trusts are forced to plug vacancies by paying more expensive agency and bank staff. This has contributed to the deterioration in hospital finances, with the recent financial reports from Monitor and the NHS Trust Development Authority showing that 96 per cent of acute trusts are reporting overspends contributing to a combined deficit across NHS providers of £930 million at the end of the first quarter.

Yet hospitals are under increasing pressure to cut staffing costs to reduce deficits. Last week, the Department of Health announced further attempts to cap agency staffing costs. Subject to consultation, from 23 November, trusts’ capped rates for clinical agency staff will be set at a maximum of double the pay level of permanent staff, and will be gradually reduced to 55 per cent higher by April 2016. Although ‘exceptional breaches’ will be considered, trusts will be required to seek advance agreement.

While the anticipated savings (£1 billion over three years) will not do nearly enough to cover off the already unprecedented overspend, the interaction with safe staffing has yet to be seen. Many organisations may now feel trapped between the Care Quality Commission on one side, continuing to draw attention to staffing shortages, and Monitor and the NHS Trust Development Authority on the other, trying to bring down spending on temporary staff.

How will the Care Quality Commission respond? It was clear from its recent State of Care report that a major reason for the failings in safety it observed was an insufficient number and mix of staff. Yet the Care Quality Commission was also included as a signatory to the recent letter from the national leaders to NHS providers, which stated that nurse to patient ratios are never the sole determinant of their ratings and should not be unthinkingly adhered to. All this leaves NHS trusts none the wiser about how to manage staffing, making Lord Carter’s commitment last week to establish ‘clearer guidance’ on the issue a priority.

If staffing numbers do indeed fall, there are also important implications for existing NHS staff given the relentless focus by the system on quality in the wake of the Francis report into Mid Staffordshire NHS Foundation Trust. For staff and their managers, overseeing quality of care in the face of these new controls may be a very difficult place to be.

How will all this play out? We do not know. What does appear clear though is that the NHS is heading towards an overspend and that one of the main levers to reduce this potential overspend – control on agency staff – risks conflicting with the priority placed on safe staffing.

• Read our report: Financial failure in the NHS
• Explore our latest quarterly monitoring report