How the IT pay cap operates on the NHS

Following an alarmingly short consultation, caps to the total amounts that NHS trusts can pay to all agency staff, including those in IT, have been imposed. This was in early 2016, but many months later it’s still a source of confusion, writes Don Tomlinson of NHS IT jobs agency max20.

The pay caps were pushed through in less than a month and we have been working with the effect of these for 12 months. To accompany any outline on how the cap operates is this document by NHS Improvement (formerly Monitor). It was produced in March 2016 but it still holds true today. It sets out what’s behind the cap, enforcing it -- the “Agency Rules”.

As the document makes clear, the cap applies to the procurement of all agency staff, regardless of skillset.  The cap is an attempt by the government to reduce spending on both Medical/Clinical agency staff -- nurses and locum doctors making up the biggest share, and Non-Medical staff, of which IT personnel make up the second largest share (after Administration & Clerical).

These Agency Rules have been brought in by the government, but it is actually the responsibility of the various agency suppliers to the NHS to enforce the rates. Moreover, agencies will be removed from the government supply frameworks if they are found to be ignoring the rules.

The rules are designed to significantly reduce agency spending; improve transparency on agency spending, bring greater assurance on quality of agency supply and encourage staff to return to permanent and ‘bank working’ within the NHS.

The rules apply to all NHS trusts (including ambulance trusts and ambulance foundation trusts), NHS foundation trusts receiving interim support from the Department of Health (DoH) and NHS foundation trusts in breach of their licence for financial reasons.

Please note:  the above paragraph is very important -- the NHS is a huge organisation and not all of its members are within the scope of the new Agency Rules.  As an IT contractor, your best course of action is to check with your agency as to which type of organisation they are recruiting for.  Some NHS hirers not affected by the rules (at the time of writing) are -- Clinical Commissioning Groups, Commissioning Support Units, Health Informatics Services and all commercial suppliers of new IT systems to any part of the NHS.

The essence of the pay cap is an attempt to bring the amount of money paid to the contractor in line with the pay of an equivalent permanent employee working within the NHS organisations, mentioned above. The specific price caps are calculated at 55% above basic pay rates of permanent NHS staff. This takes into account holiday pay (annual leave and bank holidays), employer National Insurance Contributions, a nominal employer pension contributions and a modest agency fee.

The NHS operates a very comprehensive salary banding scheme known as Agenda for Change and we have found that the rates of pay for IT contractors such as Helpdesk, First & Second Line support, Rollout Engineers and the like are still acceptable to many of our contractors (provided they live close to the place of work).  It is when we move higher up the bandings to include specialist skills such as Software Development, Business Intelligence, Specialist Training, Project Management that we have seen a disparity in the rates over the past 12 months.

And while we are still seeing a high number of requirements from the NHS they now all come with a proviso regarding rates.

Currently sought-after IT contracts/ temporary IT assignments with the cap in place, include:

• User Acceptance Testers -- now paying between £163 to £192 per day (was £250 - £300 per day)
• Project Managers -- now paying £163 to £200 per day (was £250 to £300 per day).
• Senior Business Intelligence specialists -- now paying £224 to £264 per day (was £300 to £325 per day).
• IT Trainers -- now paying £130 to £150 per day (was £250 to £300 per day this time last year). 

The above are real-world examples taken from some of our most recent placements. They reflect the willingness of many of our contractors to accept a lower rate in exchange for stability and longevity of contract working in the NHS. 

Many of the IT specialists we place know they can still earn much more in the commercial sector, but they also recognise that with the NHS you are contributing to building a better health service, and a richer experience for patients, nationwide. It is our belief that despite the pay cap, a NHS IT contract can still be very satisfying. Many contractors we place agree, but sometimes only to the extent that they use a temporary contract as a stepping stone to an offer of permanent employment where, as yet, no such cap on pay is in force.