Following feedback from nurses about our latest agency rules on substantive staff, we've clarified our rules. Until further notice, we're pausing our instruction that providers should ensure staff employed through an agency are not substantively employed elsewhere in the NHS.

This new rule will not start from 1 April 2017 and providers normal processes can remain in place.

The IR35 rules opens in a new window must remain in place to start from 1 April due to HMRC regulations.

“Trusts have taken great strides on cutting back agency costs, saving over £700m this year alone. We know that the nursing workforce has contributed the lion’s share of the savings made, and we are grateful for these efforts, on top of the excellent care and commitment they offer patients day in day out.

“We have listened and responded to the feedback from nurses about the latest agency rules on substantive staff. We’re committed to getting it right for nurses and doctors alike and making sure the system and the way staff can work is fair and equal, which is why we’re taking more time to work with the sector.

"We will be supporting trusts with the new tax rules which come into force next week, and will continue with our focus on getting medical locums to match the success nurses have achieved in bringing costs down.”

Jim Mackey, Chief Executive of NHS Improvement

Our wider work on agency and locum staff is underpinned by the following intentions. We believe these are broadly consistent with what the NHS, the Royal Colleges, and unions, all wish to achieve:

• continuity of care: it's important for patients – and for colleagues working on NHS wards – that we do all we can to facilitate continuity of care. Individuals working on a substantive basis (or working regularly at a particular trust through bank) are likely to be more familiar with local policies and procedures than those who work at multiple trusts on a more ad-hoc basis, and so will find it easier to offer continuity of care
• safety: it's critical that providers are able to support staff well-being, and can feel confident that shift patterns and total hours are safe and manageable. Nurses, and their employers, should feel responsible for ensuring that any hours outside of their substantive work are safe and have no detrimental impact on the care they provide to patients
• value for money for the NHS: at a time of substantial financial constraint, it's not right that NHS funds are being spent unnecessarily on fees for third-party agencies
• fairness to substantive staff: neither is it fair to staff working on a substantive basis that they are often paid less than colleagues working through agencies. The introduction of IR35 rules goes some way to reducing the disparity between staff. Nurses working additional shifts will be subject to the same taxation regardless of whether the shift is worked through an agency, bank or on a substantive basis.

• Reducing expenditure on NHS agency staff: rules and price caps
• Reducing reliance on medical locums: a practical guide for medical directors
• Agency controls: £1 billion saving and new measures