How do you cut NHS Contractor Costs? Only by proper resource management

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Over the last week the National Press has been full of stories of high charges to the NHS for agency staff. Headlines talk of locums earning up to £400,000 and staffing agencies making a fortune.

Hyperbole aside, it is true that the NHS spends a lot of its budget on temporary workers whether they are doctors, nurses or project staff. Yet any organisation the size of the NHS will always need temporary workers, so how does it ensure real value for money by only engaging temps or contractors when there is no alternative?

NHS_contractor_spending_concerns

Last week Jeremy Hunt, the Health Secretary, reacted to these headlines by issuing guidelines for the NHS regarding temporary workers, saying:

“The path to safer, more compassionate care is the same as the path to lower costs. Simon Stevens said the NHS needed an extra £8 billion by 2020 and the government has invested that. Now the NHS must deliver its side of the bargain for patients by eliminating waste, helped by the controls on spending we’re putting in place.”

Much of the media attention is on doctors and nurses, but through our work with the NHS PPM tool we have developed, PM3, we know that it also relies heavily on consultants and contractors to work in the Trusts and Care Commissioning Groups. These consultants are expensive resources and work primarily on projects.

Without a resource management system it is hard for management to be sure that it has the right number of consultants and contractors it needs.

The danger is that consultants, who do not have not enough, work are being paid because their under-utilisation is not visible to management.

Resource Management

There are a number of ways to manage resources effectively in any organisation including the NHS. Tools are a great help in managing resources but some of these tools are sophisticated and go down to a very low level of detail.

This might be right for some organisations, but in the NHS it is often too low a level. With increasing levels of granularity in managing resources comes a heavy burden of keeping the data up to date and accurate.

If you manage resources at a weekly or even daily level this will require a significant amount of data input and overhead. You need to be sure that the overhead is justified by the benefit in having all this information; often it is not.

Efficient PPM resource planning

My view would be to start off your resource planning and management at a monthly level. You need to input all your projects into a tool and assign the types of resources that you will need to complete these projects. You can input resources by either type, e.g. business analyst or by individual, e.g. Joe Bloggs.

The important point is to ensure you have the facility in your PPM tool to input the capacity that you have by resource type and person. Again, this should initially be by month.

Comparing the resource plan against your capacity will highlight where and when you need to employ extra contractors or consultants to deliver your projects. You may also discover by doing this comparison of resources needed against your capacity that some contractors are under-utilised and are no longer needed.

Summary

With the increases focus on NHS costs, it is important to use a PPM tool that can check your resource demands against capacity so you can ensure you are not wasting money on expensive consultants that you do not need.

Remember, doing this capacity planning on a spreadsheet is not ideal, as you really need each project manager to input into a system that dynamically highlights under or over capacity of resources.

About PM3 for Resource Planning in the NHS

Our PPM Tool PM3 is used by NHS organisations. It has comprehensive resource and capacity planning capabilities and will enable you to save money by highlighting when resources are no longer required on projects.

For more information on how the NHS use PM3, please visit our NHS PPM section

Alternatively, for more information on PM3’s resource and capacity planning capabilities, please visit our portfolio capacity management section.

Or you can contact us at info@bestoutcome.com

Mike Pryor
About the author
Mike Pryor

Mike Pryor is a Principal Consultant, with over 30 years of experience helping clients implement PMO tools and processes.

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