How restricting pay rates will hurt NHS IT

With other restrictions on contractors feared at the moment you may have missed it, but a proposed cap on pay rates for all agency-supplied contract staff is going to have a detrimental effect on both the NHS and its pool of IT talent, writes Don Tomlinson, managing director of health recruitment specialists max20.

Last month, Monitor, the sector regulator for health services in England, together with the NHS Trust Development Authority (NHS TDA), began a 29-day consultation process with the NHS. The question on everyone’s lips: ‘Would capping rates of pay for agency workers help the sector to procure agency staff at more affordable rates?’

‘Knee-jerk reaction’

The response, perhaps unsurprisingly, was an overwhelming ‘yes’. The result of this alarmingly-short consultation is the planned proposal to introduce caps to the total amounts NHS trusts can pay per hour for all types of agency staff, including those in the IT sector. What’s more, these proposals hope to be pushed through by 23^rd November – that’s today!

Understandably, this is causing much concern for specialist contractors operating within the IT landscape, particularly since the whole process appears to be running at such an unprecedented rate that many believe it to be a knee-jerk reaction to recent negative press coverage on the supply of clinical staff to the NHS.

There are a number of issues to consider: we know that non-clinical departments are being told to cut their agency staff while at the same time countering the effects by increasing the number of permanent employees.

‘Brain drain’

Robbing Peter to pay Paul is one thing, but unlike nurses and doctors who work mainly in the NHS, IT contractors have a plethora of transferable skills which means they can go and work in more lucrative sectors within banking, oil and gas and telecommunications. A ‘brain drain’ out of the NHS is a real problem and it’s being exacerbated by increased demand for highly-skilled IT workers right across the globe. So what are the most highly-sought after skills today?

Anyone specialising in cyber and information security is in a strong position going into 2016. Just look at the havoc wreaked on TalkTalk by a 15 year old from Belfast, just one of many high-profile breaches that has hit the headlines in this mobile and cloud computing dominated era. 

Talented programmers and developers also continue to be attractive particularly as more start-ups, start up. With the UK economy in a fairly healthy state, IT-business professionals with experience of helping early-stage companies with their programming and web development continue to be in demand.

Big Data up; budgets down

Big Data is another prolific area with much IT investment being put towards the analysis of consumer trends and behaviour. Skills required to operate in this area are relatively new and therefore not readily available so it’s no surprise to see that the number of roles in this arena grew by 56% last year. 

So with IT contractors understanding the value of their own human capital how will they react to today’s limitations from the NHS? Certainly those who are able would be perhaps foolish not to exploit well-paid opportunities overseas. Some may even look to leave the uncertainty of contracting behind altogether by considering a permanent role - salary reduction and all.

But have we, as NHS IT recruiters, already seen fallout from the pay cap? Looking at the hard facts; we’ve seen a:

• >50 % increase in short term roles
• 0% decrease in pay rates (at the time of writing)
• 20% decrease in new enquiries
• Steady increase in contract duration
• 25% decrease in client budgets

NHS tech workers ‘in the cold as victims’

It’s a shame that Monitor and the TDA feel that they have engaged with ‘the sector’ as a whole – I fear in reality, they simply focused on the medical side of recruitment and now IT professionals will feel themselves out in the cold as victims of the same cull. If the proposed cap on agency pay isn’t rethought, then highly computerised and well tech-supported NHS IT trusts could be placed on life-support – just like those Cobol programmers who were once a staple part of the NHS’s technical infrastructure.