Latest NHS staffing shortages sure sign that IR35 has to be scrapped for the greater good

Freelancers have found it increasingly difficult to access roles within the NHS at a time when they are desperately needed

The Association of Independent Professionals and the Self-Employed (IPSE) is calling for the government to urgently change IR35 and Off-Payroll rules so that specialist contractors and freelancers can fix the National Health Service’s talent gap and long waiting times.

In recent years, freelancers have found it increasingly difficult to access roles within the NHS. IR35 and other compliance burdens often act as a barrier to efficient workforce management and should be more properly considered by the NHS leadership, says IPSE Chief Executive, Derek Cribb.

“As the NHS turns seventy-five it is important that we recognise the role that freelance specialists have played in ensuring services are delivered,” says Cribb. “The external expertise and additional capacity that freelancers bring ultimately help the organisation operate more efficiently.”

The number of Referral to Treatment (RTT) patients waiting to start treatment at the end of April 2023 was 7.4 million. In some cases, 523 patients were waiting more than 104 weeks.

NHS England

2010-17: when everything started to go south for the NHS

In 2017 the government changed the IR35 rules which resulted in NHS trusts, and other public sector bodies, facing huge potential tax liabilities when hiring external specialists. IPSE believes this has exacerbated staff shortages and resulted in longer waiting times for patients.

At the end of April 2023, 58.3% of patients waiting to start treatment (incomplete pathways) were waiting up to 18 weeks, therefore not meeting the 92% standard, NHS England reported.

The number of Referral to Treatment (RTT) patients waiting to start treatment at the end of April 2023 was 7.4 million. Of those, 371,111 patients were waiting more than 52 weeks, 95,135 patients were waiting more than 65 weeks, 11,477 patients were waiting more than 78 weeks, and 523 patients were waiting more than 104 weeks.

Cribbs suggests IR35 has inhibited the NHS from getting the urgent talent it needs to provide critical care. “Working alongside permanent staff, freelancers help organisations to manage peaks and troughs in demand and improve the quality of service,” says Cribb. “The NHS is no different. The flexible workforce can help to power the NHS for another seventy-five years but we must remove barriers which prevent effective staffing.”

The cracks in the NHS perhaps started when the NHS carried out a re-organisation at the height of the 2010/11 financial crisis. This led to high staff turnover, according to data compiled by The King’s Fund. During this period, the NHS saw pay freezes and fewer managers joining.

However, since the pandemic, other factors are contributing to NHS talent shortages. It has been reported that more than half of NHS leavers are voluntary resignations. These include reasons such as relocation or dependents, however, the top two reasons are to improve work–life balance, or because of health issues, the King’s Fund has revealed. The number leaving for these reasons has more than doubled since 2013/14.

Although the NHS workforce has been growing, demand for NHS services has been growing faster, and the health service hasn’t been able to recruit and retain enough staff to keep up.

The King’s Fund

NHS vacancies a “big concern”

Vacancies, therefore, remain a big concern, with an estimated 112,000 NHS posts currently unfilled substantively. Anyone that has visited an A&E department will know waiting 10 hours or more to be seen or admitted to a hospital for treatment is not uncommon. Many beds are being taken up by elderly patients with limited mobility and no family support to care for them at home. This combination leaves those patients in limbo in hospital wards.

There are also talent gaps outside hospital services that are having a huge negative impact on the families of some of the most vulnerable. For example, learning disability, mental health and community nursing have seen a loss of nearly 8,000 nurses.

A call for more freelance medically trained staff and at-home carers to solve this issue with the nation’s elderly could be the answer.

“Although the NHS workforce has been growing, demand for NHS services has been growing faster, and the health service hasn’t been able to recruit and retain enough staff to keep up. Although some substantive posts are filled temporarily by bank and agency staff, this can be costly to the NHS,” says The King’s Fund.

Op-Ed

If more highly skilled and/or trained outside IR35 freelance staff are welcomed to work for the NHS, HMRC should create a more level playing field for both the NHS in its hiring flexibility and the workers’ rights to remain outside IR35.

It is inside IR35 roles that are forcing NHS talent into the unregulated umbrella industry, which has left a trail of alleged salary skimming, unlawful salary deductions and unpaid holiday pay incidents. These risks have put talent off working for the NHS at a time when their talent is needed most.

Eliminating IR35 and embracing the freelance economy to thrive within the NHS could be the answer to staff shortages and wait times. Umbrella companies, however, may not be keen on the idea, nor HMRC, even if it is to the detriment of NHS patient care.