A Sharp Turn in NHS Temp Recruitment

NHS Cuts Reshape Temp Staffing

The UK's National Health Service (NHS) is accelerating a significant shift in temporary healthcare staffing. As agency spending becomes a target for cost reduction, healthcare professionals, recruitment companies, and umbrella companies must all adapt to major changes – rapid growth of platforms, stricter budgets, and a notable push to fill shifts internally.

Agencies and Umbrella Companies Lose Out as Internal Banks Expand

A key element of NHS England’s new approach is prioritising internal “bank” staff – healthcare professionals directly employed by NHS trusts and available to fill flexible shifts. The intent is clear: trusts must fill as many roles as possible from these pools rather than turn to external recruitment agencies, whose services often come with high markups.

This approach mirrors government efforts to crack down on what it deems “rip-off temp agencies.” The Department for Health and Social Care (DHSC) has reported almost £1 billion in savings in 2024–2025 as agency spending was slashed. The headline directive: trusts must cut agency spend by 30% immediately, aiming to redirect funds to front-line patient care and reduce waiting lists.

For umbrella companies – which manage payroll, tax, and employment rights for agency workers – this reduction in agency usage is a direct threat. As more temporary workers are routed through NHS staff banks or directly engaged via digital platforms, fewer workers are paid through umbrella structures. This may significantly reduce their client base, especially among short-term locums who previously depended on agency-led umbrella arrangements.

Industry Data and Impact

Year	NHS Agency Spend (£bn)	Reduction (%)
2023–2024	3.0	–
2024–2025	2.0	33

Such reductions are claimed to benefit quality of care, patient safety, and staff morale. However, this overhaul is prompting concerns among those who have relied on the flexibility and often enhanced pay offered by recruitment agencies. The Recruitment & Employment Confederation (REC) has warned that internal pools alone may not suffice, raising the risk of staff shortages and higher pressure on permanent NHS teams.

Umbrella companies are also voicing concerns, noting that fewer agency placements may reduce demand for their services – particularly for PAYE and IR35-compliant contracting solutions. Some may be forced to consolidate, diversify, or exit the healthcare sector entirely.

Key Developments Transforming the Market

• Emphasis on internal staff banks for flexible shifts
• Spending caps on agency usage
• Deployment of technology platforms to streamline staff bookings
• Potential decline in umbrella company engagements as agency placements fall

Platforms Disrupt the Old Model: Aya Healthcare & Locum’s Nest

A major development in 2025 was the acquisition of Locum’s Nest, a well-known digital booking platform, by US staffing heavyweight Aya Healthcare. Locum’s Nest allows NHS trusts to directly connect with temporary clinicians, bypassing traditional agencies. With Aya’s vast resources and expertise in tech-driven staffing, the digital revolution in NHS recruitment is set to accelerate.

For NHS trusts, digital platforms offer several efficiencies:

• Reduced placement fees
• Faster shift fulfilment
• Direct access to a larger pool of pre-vetted healthcare professionals

For healthcare workers, there may be:

• A wider range of shifts via digital apps
• Greater autonomy over when and where to work
• The need to engage through multiple channels, including NHS staff banks and booking apps

For agencies and umbrella companies, however, the landscape grows more competitive. Traditional models, especially those focused on generic locum provision or payroll administration, may struggle unless they pivot to offer niche expertise, technological integrations, or broader workforce support.

Expert Commentary

Health Minister Ashley Dalton said, “The taxpayer has been footing the bill for rip-off agencies for too long... We’re already backing our health workers with above-inflation pay rises and now nearly £1 billion is being reinvested back to the frontline, getting patients off waiting lists and putting money back into our workforce’s pocket.”

The REC remains sceptical: it warns that relying solely on staff banks and platforms could leave staffing gaps, especially where specialist skills or last-minute cover are required.

Umbrella industry associations are beginning to raise flags as well. Some warn that if digital platforms do not accommodate umbrella-style payroll or if trusts discourage such arrangements, thousands of contingent workers could lose access to the payment models they rely on for consistent take-home pay.

What’s Next for Flexible Healthcare Professionals, Agencies, and Umbrella Companies?

Flexible healthcare workers should:

• Register with multiple channels, including new digital platforms and NHS staff banks
• Monitor developments in contract terms and pay rates, as cost savings may impact remuneration
• Stay adaptable, considering both short-term opportunities and longer-term career moves

Agencies serving the NHS sector must:

• Invest in technology and streamline operations
• Target niche specialities that are less easily commoditised
• Highlight value-added services and compliance expertise to differentiate from direct booking channels

Umbrella companies should:

• Diversify their client base beyond healthcare or expand into other sectors
• Innovate payroll and compliance offerings to integrate with new digital staffing ecosystems
• Engage with trusts and platform operators to ensure continued relevance in a platform-dominated landscape

The Takeaway

The NHS’s drive to cut costs, combined with the influence of powerful new platform operators, is reshaping the market for locum and temporary healthcare talent. Traditional recruitment agencies and umbrella companies alike are facing a disruptive recalibration. Those who adapt early – through tech, compliance, or specialisation – will be best placed to thrive in this rapidly evolving landscape.