PAST PRESENT FUTURE PRICE CAPS IR35 BREXIT

12 Apr 2018 By Views : 469

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PAST PRESENT & FUTURE- PRICE CAPS, IR35 & BREXIT

 

PAST  – PRICE CAPS

The medical sector has had a rough roller coaster effect since the ‘agency price caps’ has been introduced.
The November price cap had a disappointing atmosphere for the medical professionals nevertheless was bearable and was possible for agencies to negotiate to reduce their pay. Even though the vast amount of the candidates has agreed to reduce their income, the negative atmosphere erupted and was difficult to dissolve.  At this point, doctors have already reduced their hourly pay rates on average by £5 per hour.
3 Months later, as part of the price cap strategy, a further price reduction was required ultimately addressed as the February caps. A further £10 per hour was expected to be reduced on average from the doctors. Medical professionals refused and elevated their thoughts of finding opportunities elsewhere. Many candidates were under a bright idea of going on a long holiday until the situation resolves as the majority was doing long hours and was struggling to meet the demands of family.
 
A further 3 months passed where April caps was introduced automatically as per strategy however no outcomes were found from the issues raised from February.  Not too long after, concerns and issues in regards to patients safety came to light due to understaffing. Wards were closed, patients waiting times increased and frustrated population began to share their experience publicly. Trusts began to start meeting the demand from the candidates and started to escalate rates calling them ‘Break Glass’ bookings. Eventually, the whole concept of price caps vanished over time as all the bookings began to go through the break glass process.
‘The NHS has reduced expenditure by over £600 million in the first year of measures to curb spending on agency staff’ (Improvement, 2016). It is strongly believed that the figures referred were due to the lack of doctors working and the initial reduction throughout the process of caps.  It is agreeable that the agencies have reduced their commission in comparison to the initial charges to support the causes however due to the business costs, it is unfortunate that they cannot lower to what is expected from these pay caps.
 

Present – IR35

A legislation that took 8 years to gain approval was launched in April 2017 that began to shake all the industries. Within those industries, the medical sector was swallowed with a blanket approach of eliminating the option of using limited companies.
 
With providing a clear view of the reasons behind the launch of this new legislation, it is undeniable but to pursue its strategy. The main issues within this streamline of medical professionals are that they have adapted to using their limited companies and the use of providing their expenses while working via locum. 
When this legislation was implemented, the entire medical locum market was affected and many issues erupted as a side effect. Over 26,000 PSCs were estimated to quit in relation to the enforcement of IR35. Placements rate began to drop as agencies found it difficult to find doctors as they began to refuse the pay rates that were offered to them.
 
Many medical professionals were under the impression that IR35 would be breakable or would dissolve over time henceforth decided once again to take time off. Many doctors that were already in placements decided to give their notice to the trust that caused a massive chaos of shortage of staff.
 
IR35 has changed their net income drastically. It was difficult for candidates to accept the new financial status that IR35 has downgraded and several unions were formed. One of these is LDU (Locum Doctors Union) who appealed to remove the blanket approach and have succeeded to change into the individual assessment of each application of the rule. This gave candidates a new hope to find placements outside IR35 however the IR35 guidelines remained even if each application would be assessed individually. Also, this has lengthened the process of confirming candidates as the applications needed to be reviewed by other departments/personnel.
 
As matter of urgency, the trust began to escalate rates through PAYE to confirm placements to show their support to the issue. Doctors began to accept offers that were made however the placements rate did not reach a satisfactory state.  An unproven fact nevertheless it is said that strict orders were given not to escalate rates for IR35.
There was a mixture of reactions within the market where a proportion of doctors moved from the country, and some have ultimately accepted the offer and a wide range of doctors increased their flexibility to find escalated rates. The conflict and the negotiation to find escalated rates continue as well as some areas suffering from the shortage of staffs due to the rates they provide. Similarly, some remote hospitals suffer significantly due to this shortage.
 

Future – BREXIT

The problem is expected to get worse when the Brexit happens next year. A large number of European professionals are expected to leave the country and the shortage of temporary staffing can further affect the rate caps. The Trusts might be forced to review the situation to avoid the crisis. Remote areas of Uk could be the worst hit and may be forced to offer higher rates. Movement of temporary staff towards higher paid areas can create gaps in the bigger cities as well. All of these events can ultimately affect the rate caps. It could be a win-win situation for locums. However, it is still unpredictable until we know the outcome of Brexit.
 

DISCLAIMER: The information on this blog is for News Reporting and Educational Purposes Only.