Accusation that ‘Agencies make millions from NHS’ misleading writes Adrian Marlowe Chairman of the Association of Recruitment Consultancies (ARC)

A Sunday Telegraph article of 25 March 2012 entitled ‘Agencies make millions from £120-an-hour doctors’ omitted several significant points.

Given the important role that recruitment companies, including ‘temp agencies’, play in the economic recovery and their particularly crucial role supporting the NHS, the ARC believes that it would be useful to outline some issues that demonstrate the extent to which public sector organisations have been hit by European led changes. 

Firstly, the ‘escalating charges’ to which the article referred are a result of a number of factors entirely within the control of the hiring NHS organisation. For example the margins proposed by the hirer are set out in a framework agreement which is imposed on the agency.

Secondly, the inclusion within the costs quoted in the article of ‘on call’ time, are likely to be the result of EU rulings rather than rates proposed by the agencies concerned. These rulings could soon be compounded by further proposed changes to the Working Time Regulations recently announced by the department of BIS, already the subject of controversy. If agencies charge for on-call time it is because they are required to, and the NHS is likely to be paying its regular employees on the same basis.

Finally, NHS agency worker costs have escalated since 2009 due to the addition of a VAT charge on the whole cost of temporary worker supply. Prior to the law changing in 2009 to comply with EU Regulations it was only payable on the agency’s margin. As a result NHS costs have risen by up to 20% as have the costs of agency workers hired by charities and local authorities.

ARC has been pressing for some time for changes to rules relevant to VAT for charities and the public sector when using agency workers. Our representations and campaigns for recruitment agencies are geared towards increasing flexibility and thus reducing costs and it is not fair simply to blame agencies which provide crucial support. The ARC argues that change is possible and lies within the control of government.

Author: Adrian Marlowe

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