Pause zero-hours reforms over cost risk, warns NHS Employers
NHS organisations in England could face unbudgeted costs of close to £1bn a year because of a government crackdown on zero hours contracts.
This is according to analysis from NHS Employers (part of the NHS Alliance), which is calling on the government to pause its plans due to the potential impact they would have on patient care and the additional cost to the NHS.
The Labour party pledged to ban “exploitative” zero-hours contracts in its 2024 manifesto.
Proposed changes, which are being consulted on following the Royal Assent of the Employment Rights Act, include requiring employers to:
- Offer workers on zero-hours and low-hours contracts a right to have a guaranteed hours contract, which reflects the hours they regularly work over a 12-week reference period.
- Give their workers on zero-hours and low-hours contracts the legal right to reasonable notice of their shifts and of any changes.
- Compensate workers on zero-hours and low-hours contracts when shifts are cancelled, shortened or moved at short notice.
While the vast majority of staff are employed in substantive or permanent roles in the NHS, some healthcare professionals choose to take up work across multiple employers by booking temporary work when they wish. NHS organisations use internal staff banks to fill shifts, including at very short notice, to respond to sickness absence, major incidents and other short-term workforce pressures.
NHS Employers has told the government as part of its response to the consultation that while it supports action to end abusive employment practices, the NHS’s bank arrangements are fundamentally different because they provide genuine two-way flexibility for employers and staff, allowing workers to choose when and how they work while helping services maintain safe patient care around the clock.
Around 85 per cent of NHS bank workers already hold a substantive NHS contract and choose to work additional shifts through the bank. Among those who do not hold a substantive contract, survey findings show that most wish to continue working through NHS banks, with 74 per cent reporting they are able to work the shifts and hours they want.
NHS Employers is concerned that the proposed changes could generate significant administrative and operational burdens across the service at a time when NHS organisations are being asked to improve productivity, deliver efficiencies and when the NHS has already had to absorb sizeable unbudgeted costs elsewhere, such as following the recent rounds of industrial action.
The exact operational, legal and financial impact on the NHS is unclear due to the lack of detail provided in the government’s consultation and the range of options presented. However, based on current proposals, NHS Employers estimates that implementation could require the equivalent of more than 800 additional administrative staff and around 610 whole-time equivalent managers across the NHS in England to undertake monitoring, workforce planning, payroll administration and compliance activity.
Combined with changes to staff compensation arrangements and necessary upgrades to workforce and digital systems, NHS Employers estimates the proposals could create around £900 million in recurring annual costs.
The organisation warns that the reforms could also reduce the availability of bank workers and undermine ongoing efforts to reduce spending on more expensive agency staff.
As part of its consultation response, NHS Employers has proposed several measures to make the reforms more workable for health services, including exemptions for substantive NHS employees undertaking additional bank work, emergency staffing arrangements and other short-term workforce pressures.
The body is calling on the government to pause the process ahead of further engagement with health and social care representative bodies. In addition, it is calling for a full impact assessment to be undertaken on cost, equality and productivity for the NHS.
Ben Morrin, chief executive of NHS Employers (which is part of the membership body, the NHS Alliance), said:
“We support the government's ambition to tackle exploitative employment practices, improve income security for workers and end one-sided flexibility. These are important objectives that can improve people's health, wellbeing and financial security.
“However, the current proposals risk creating significant unintended consequences for the NHS. They could reduce the flexibility that many bank workers actively value, increase bureaucracy and generate substantial unbudgeted costs at a time when the NHS is focused on improving productivity and delivering better value for taxpayers.
“The government’s current proposals do not adequately reflect the operational realities of delivering healthcare services 24 hours a day, seven days a week. Flexible staffing arrangements play a vital role in maintaining safe care, responding to fluctuating demand and reducing reliance on more expensive agency workers.
“The NHS has worked hard to improve the experience of colleagues who choose to undertake temporary work and has successfully expanded the use of staff banks to support patient care. We are keen to work with government and trade unions to explore further improvements for bank staff.
“Before introducing regulations that could impose substantial additional costs without clear benefits for NHS staff or patients, it is clear the government should pause implementation and undertake further engagement with health and social care employers.”
Sir Ciarán Devane, chief executive of the NHS Alliance, said:
“While this initiative by the government is for good reason, current proposals risk landing the NHS with another unfunded cost at a time when cuts have already had to be made to budgets. Patient care will be at genuine risk if fewer staff come forward to fill shifts and if more have to be diverted from other responsibilities to do the admin associated with these changes.
“Health leaders absolutely support the ambition to end abusive employment practices, but these already have no place in the NHS. We cannot afford to take on more cost when the NHS is not the problem. As they stand, the proposal will only undermine ongoing efforts to recover waiting lists and improve services.”
The government’s consultation, “Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts” closes on Tuesday (25 August).
In its response to the consultation, NHS Employers has suggested ways to make the changes more workable for the NHS, which it would be keen to explore further with the government.
These include introducing the option for individual workers taking on shifts via the NHS bank to opt-out of the right to guaranteed-hours offers where they wish to retain the flexibility of existing arrangements; removing from the scope any bank worker who already has a substantive contract with the NHS as they already benefit from contractual employment protections, in addition to administrative, clinical management and leadership roles; exempting bank work needed as a result of emergency response requirements, seasonal pressures, staff sickness absence, annual leave and other short term workforce pressures; and, removing the need for additional compensation payments for shifts cancelled in short notice period.
