An NHS agency has set up an auction for locum doctors – where recruitment agencies will compete to undercut each other – in a controversial cost-cutting exercise.

The NHS Purchasing and Supply Authority (NHS PASA), which is in charge of overseeing NHS hiring, proposes to post bids on the internet and invite lower tenders.

The idea, aimed at filling in gaps at GP surgeries and hospitals, has received widespread condemnation.

The REC, the recruitment trade body, accused NHS PASA of creating a two-tier health system and rushing the process under pressure from external management.

Marcia Roberts, the REC’s deputy chief executive, called for a proper consultation with agencies and bodies that represent doctors.

She said: “NHS PASA is rushing through ill-thought-out processes at the behest of management consultants with little or no consultation. The changes will create a two-tier level of pay, reduce standards and at worst put patients at risk.”

Shehnaz Somjee, chair of the Locum Doctors’ Association trade union, said the move was a false economy: “If you buy a cheap quality product in the shop you can expect nothing but a cheap service. Low-priced doctors will be of a poorer standard.”