It beggars belief that, in the current climate, the government has seen fit to abolish the VAT concession on temporary staff. At best, this decision compounds the burgeoning financial-woes reverberating across all industry sectors. At worst, it has ethical implications for the healthcare industry and, quite frankly, poses a direct
threat to the lives of patients.

Contrary to media reports that sum up locum agencies as callous, cash-driven conveyor belts with high staff turnover and low staff standards, the reality is that agencies adhere to a stringent set of standards and provide essential support to an industry that deals with matters of life and death. That this industry now faces a hefty hike in overheads is a matter of grave concern. Removing this exemption means that costs to clients
will increase by up to 13%, an unreasonable rise even in a buoyant economy.

Charity-run nursing homes and hospices, in particular, which have already reported falls in revenue, could really do without this double whammy.

The ongoing skills shortage means that healthcare staff are already over stretched, and the likelihood is that budgetary constraints will mean the increased VAT makes consistent agency support untenable. But then what? Horrendous horror stories already abound and the fallout from what is effectively a cut in budgets could be cataclysmic.

At a time when the healthcare industry needs to nurture internal talent and cultivate consumer confidence, removing the VAT exemption really
doesn’t seem the best way forward.

Ian Munro
Managing director,
Castlerock Care Services

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