HOSPITALS are being told they can only spend a limited amount on temporary nurses to cut costs.

A new Government policy will see all hospital trusts issued with a cap on how much they spend on agency staff.

Basildon Hospital, which recorded a deficit of £23.5million in the financial year 2014/15, admitted its financial difficulties were partly due to an ongoing reliance on expensive agency nurses.

It is projecting an overall deficit of £38.8million for the 2015/16 financial year.

Stephen Metcalfe, MP for South Basildon and East Thurrock, welcomed the measures.

He said: “Obviously the best thing to do is to have full-time permanent nurses working for the trust, but while they are recruiting I understand it is quicker to employ agency staff.

“But Basildon Hospital is looking to improve patient care and safety, and this is one of the things that needs to be looked at.

“I am confident in the management and they are trying to do that as quickly as possible.

“There will always be a need for agency staff, but it is about getting the right balance – that is why the Government is putting these measures in place.”

The cap, which will be a set percentage of the total amount the hospital spends on nurses, will only apply to temporary staff recruited via external agencies.

Basildon Hospital’s total agency nursing spend in July was £1.5million – significantly above the £600,000 it had budgeted for – but the trust insists its external agency spend is within the six per cent cap set by regulator Monitor.

A Basildon Hospital spokesman said: “Monitor’s ceiling applies to spending on staff from agencies outside the NHS.

“In common with other trusts, our first port of call for temporary nursing staff is NHS Professionals, which provides best value for money. Our level of spending on agency staff during July was 5.3 per cent of total spend.

“We don’t anticipate any difficulty in meeting Monitor’s limit of six per cent for the rest of the financial year.”

Basildon Hospital spent £80.9million on nursing staff – both permanent and temporary – in 2014/15, of which £4.09million (5.1 per cent) was from outside agencies.

Ruth May, nursing director for Monitor, said: “This set of rules which will support boards and in particular chief nurses to reinvest the money currently spent on agency staff into providing the best care for patients.”

Southend Hospital has been issued with an eight per cent cap for agency nurse spending.

Hospital trust chief executive Sue Hardy said: “We have robust plans in place and are working hard to bring our reliance on agency staff down and reduce spending in this area.”