Managing The Hospital Staffing Conundrum

There is no doubt that some private staffing agencies have had a good run - at the expense of the NHS.

Sky News has carried out two big Freedom of Information investigations over the last year looking at the issue - and found some hospitals had to pay up to £230 an hour for staff to fill key shifts.

We were told that some agencies are creaming off a commission of £100 an hour. It's so lucrative that private equity firms have invested in the market.

The soaring costs are down to a straightforward market of supply and demand.

There aren't enough nurses to plug vacancies on the wards, so agencies can push up pay rates. They know that hospitals are desperate.

The shortage of nurses is largely due to poor workforce planning over the last 15 years.

Nowhere near enough nurses have been trained to keep pace with the health needs of a growing population.

And the pay restraint of recent years has also led some nurses to leave the NHS. They know they can earn more through an agency - and take more convenient shifts that fit in with childcare commitments.

So that's the supply problem.

On the demand side, hospitals now have to ensure they have a enough staff on shift to cover the wards. The Mid-Staffordshire scandal highlighted the safety and quality of care risks when there aren't enough nurses.

So hospitals have to fill vacancies, even if they bust the budget on expensive staff.

Some hospitals have managed the staffing conundrum themselves. They have highly effective nursing 'banks' - their own nurses can volunteer for extra shifts and get paid overtime. It's much cheaper than going to an agency.

And in London, hospitals have joined together, using their collective muscle to set agreed rates with staffing agencies.

That has kept a lid on fees in the capital - and it's what the Health Secretary Jeremy Hunt wants to see across England.

There will always be a need for agency staff to cover sickness and spikes in patient demand.

But it is critical that the NHS reduces its reliance on expensive temporary workers.

It needs to find £22bn in savings by 2020 - and cutting the £3.3bn bill for agency staff would be a good start.