Doctors banned from earning ‘rip-off ’ fees at other hospitals

Campaign to cut spending on locum medics comes after five staff earned £2m between them in a year

NHS doctors have been banned from earning lucrative agency rates while moonlighting at other hospitals after it emerged five medics were paid more than £2 million a year between them.

The health service watchdog, NHS Improvement, last night said the five locums are believed to be the best paid doctors in the health service.

Around 100 agency staff are earning more than £200,000 a year for covering staff shortages, while more than 500 doctors earn in excess of £150,000 a year.

Many of these are NHS employees taking advantage of a system which allows them to charge “rip-off ” agency rates – in addition to their salary – when working shifts at a hospital that is not their main place of employment. The regulator is now banning the practice and has said any doctor providing shifts at their non-regular NHS hospital must be paid at a normal level by PAYE.

It comes before a change in the law due to come into force this April, which will ban doctors from avoiding income tax by being paid through personal service companies.

The moves form part of an 18-month campaign to cut down on the huge sums made by locum agencies exploiting shortfalls in full-time hospital staff.

It is hoped the drive will tackle spiralling overspends by the provider sector, mainly hospitals, which last year reached more than £2.45 billion. NHS Improvement said three quarters of trusts had been able to reduce their agency spending since last year, with 40 per cent managing to cut their bills by more than a quarter.

It means hospitals are forecast to have spent around £3 billion in this financial year on locums, compared with £3.7 billion in 2015-16.

More than a fifth of the bill spent on medical locums is devoted to filling gaps in A&E staff rosters, where there are acute full-time staff shortages and increasing patient demand.

Jim Mackey, chief executive of NHS Improvement, said the changes would make it more attractive for doctors and nurses to become permanent NHS employees. “These new rules will make sure most agency staff get paid and taxed in the same way as their NHS staff colleagues,” he said. “We expect these new measures to take another big chunk out of excessive agency costs.”

NHS Improvement is demanding that hospital bosses report the amount they pay to locum staff on a weekly basis. The body will then publish the total number of shifts each trust has reported paying more than £120 per hour.

The watchdog believes the measures will save up to 25 per cent of the hourly charge billed by an agency, but acknowledged more transparency was needed over locums paid more than £150,000 a year.

A spokesman for the Department of Health said the changes would “help to level the playing field for hardworking staff and make sure the NHS gets the most out of every pound it spends”, but added: “We know there is more work to do.”