Board Meeting 27.01.16
Agenda Item: 8.2
Paper No: 127/1516
Purpose: For Information
Weekly Equivalent Rate System for locum appointments within
NHSWI
Background
NHSWI relies heavily on the use of medical locums. Whereas some locum use is anticipated and
budgeted for (to cover annual leave and study leave) the majority of locum use is to cover vacant
substantive consultant posts.
Expenditure on agency medical locums during 2014-15 was £1,240,759, amounting to 32% of the
medical staffing budget
WIH currently only have 10 substantive Consultant posts filled out of an establishment of 18 posts. A
high proportion of the working hours are being done by locums.
There is a substantial variation in cost between individual locums.
During 2014-15, the medical director budget overspend on locums was £639,699
The Nationally agreed Terms and Conditions for the use of medical locums tends to disadvantage the
small Health Boards where there is a large On Call component to the work. The On Call availability
tends to be remunerated using hourly payments which are substantially greater than those paid to
substantive post holders. In addition to the exorbitant costs required to run such an arrangement,
this system has the potential to cause significant disruption amongst the existing workforce because
of the significant inequity in remuneration between substantive post holders and locums.
The current cost of locum appointments is prohibitive, not sustainable and not cost effective.
Existing types of locum appointments include:
Internal locums. These are medical staff, in post in the Board, covering short periods, such as
sickness, or absences of a few days allowing colleagues to attend courses, etc. Staff members take
on the on-call duties of the absent team members. Any additional on call shifts are paid at an hourly
rate (as ‘additional shifts’) which incurs a significant extra cost to the Board.
Agency locums – within framework.
There is a Scottish Government framework for the use of medical locums, ensuring that, in principle,
the hourly rate paid to locums is comparable to that paid to substantive post holders. However, in
practice, the costs to the NHSWI are substantially higher. The main reason for this is the way in
which On Call work is remunerated.
Consultants who are employed by Health Boards and who participate in an On Call rota are
compensated by a 3-8% increase in their salary. They may also receive an additional payment which
approximates to the actual work done whilst on call. Most of the NHSWI employed consultants
receive an 8% addition to their salary to cover their on call availability and an extra 2 ‘Professional
Activities’ or ‘PAs’ which equates to approx a 20% increase in salary to cover the actual work done
during the on call period.
Board Meeting 27.01.16
Agenda Item: 8.2
Paper No: 127/1516
Purpose: For Information
Agency locums, even whilst working at National Framework rates, receive an hourly payment for
their On Call availability which results in take home pay which is substantially higher than the
equivalent Board employed consultant.
Agency locums – out with framework
In practice, NHSWI is usually unable to recruit locums at framework rates. Most locum agencies will
offer locums at non framework rates, with hourly rates substantially higher than the equivalent
Board employed consultant
Bank Locums
NHSWI maintains a locum bank, which uses nationally agreed Terms and Conditions for
remuneration. This is a safe and cost effective way to manage locum use for in-hours work.
However, hourly rates apply to all On Call work, which makes this an extremely expensive way to use
locums for all posts other than radiology (which has no On Call component to it)
Fixed term NHS locums
This method has similar Terms and Conditions to the Consultant Contract and carries little if no net
additional cost to the Board.
NHSWI has, over the last 12 months, established a new method of appointing locums:
Weekly Equivalent Rate System for locum appointments (WERS)
Principles:
 Substantive post holders and WERS locums receive approximately the same gross weekly
payments
 WERS Locums work, where possible, as part of a cohort who, between them, will service the
entire locum requirements of the department
 Locums engage with NHSWI via a contract for services. Locum agency receives weekly
administration fee.
 Additional reimbursements (such as travel costs) are handled directly with the locum
 Good quality accommodation is provided.
 A contract for the provision of medical locum services is not subject to VAT.
 Agency staff will always be subject to VAT with no scope for recovery.
Gross costs for a consultant surgeon locum (based on a 1:2 on call rota within a department
configured for 3 surgeons) are illustrated below:
Average week Consultant
including
on Surgeon
call
substantive
post holder
Weekly gross £3,441
cost inclusive
of VAT
Fixed
term Weekly invoicing NHS
- locum
method
bank
consultant
£3,441
£3,600
£6,683
+accommodation
cost + agency fee
= £4,488
locum Agency
locum
£7,000
£10,000
approximate
average
Board Meeting 27.01.16
Agenda Item: 8.2
Paper No: 127/1516
Purpose: For Information
Implementation
Cohort system
The WERS system has been trialled in the surgical and medical departments within WIH.
Surgical:
2 Substantive posts (out of an establishment of 3) are currently vacant. NHSWI have worked closely
with one locum agency (Templars) to identify a cohort of locums who will provide the entire locum
provision for one of the vacant posts. The cost of this arrangement is broadly similar to the cost of
running the surgical department with 2 substantive post holders.
The cohort will provide the entire locum cover for the vacant post for the period November 2015 to
at least end March 2016. This method of filling the vacant surgical post should reduce annual
surgical locum costs by £145,000 (net of agency fee and accommodation)
Medical:
3 substantive posts (out of an establishment of 3) are currently vacant. One of the posts is currently
being covered by an agency locum, at a pro rata annual cost of £400,000. The second post has been
covered since August 2015 by an NHS fixed term locum working alternatively with a WERS locum.
The projected annual difference in cost between the agency locum and the fixed term/WERS locum
is £170,000 (net of agency fee and accommodation) The intention is to recruit additional WERS
locums to enable a cohort of Physicians to cover the entire medical department until substantive
post holders are in place.
Projected financial benefits 2015/16
Despite a further significant reduction in substantive consultant post holders in 15/16 as compared
to 2014/15 the total projected cost of the Consultant service has reduced:
2014/15
Substantive consultant posts: £2,656,079
Total cost of consultant service: £3,947,871
2015/16
2015/15 projected cost on Substantive consultant posts: £2,057,460
Total projected cost of consultant service: £3,706,544
Board Meeting 27.01.16
Agenda Item: 8.2
Paper No: 127/1516
Purpose: For Information
14/15 Consultant Spend
Agency,
£1,240,759 ,
32%
Fixed Term NHS
Locum/WERS,
£46,033 , 1%
Substantive
Post,
£2,656,079 ,
67%
15/16 Consultant Projection
Agency,
£918,102 , 25%
Fixed Term NHS
Locum/WERS,
£730,992 , 20%
Substantive
Post,
£2,057,460 ,
55%
Principles of using cohorts:
 Clinical continuity – patient safety, assurance.
 Continuity of Educational Supervision for junior doctors
 Home from home – WERS locums must have accommodation provided that provides a
homely environment, with reliable fast internet and spare room to entertain family and
guests.
 Job satisfaction – a strong factor for recruitment and retention.
Board Meeting 27.01.16
Agenda Item: 8.2
Paper No: 127/1516
Purpose: For Information



Team working – the WERS locums will function (and feel like they are functioning ) as part of
the ongoing clinical team
Spreading the word to other colleagues – WERS locums who feel part of the WIH team and
who are satisfied with work and accommodation are more likely to attract like-minded
colleagues. We have already seen evidence of this happening.
Flexibility- the cohort capacity should be able to flex up to fill a substantive post vacancy and
flex down to cover the annual leave of a fully staffed department. This adds resilience to
prevent a ‘boom to bust’ scenario where a fully staffed department can suddenly be subject
to exorbitant agency locum expenditure in the event of staffing reduction through illness or
retirement. The intention is to maintain a cohort of WERS locums to service the annual leave
and study leave requirements of the surgical department.
Appendix 1:
Contract for services