The battle between private healthcare agencies and the NHS continues to rage after a mental health trust in north London blamed a £2m deficit on the soaring cost of agency staff.

Camden and Islington Mental Health Trust is to hold a meeting this week to discuss how to recoup some of the costs.

In a statement, the trust’s chief executive Erville Millar said: “A deficit of this kind cannot be allowed to continue. If followed, the financial recovery plan should help alleviate and substantially reduce this shortfall.”

However, Millar insisted that this would not result in cuts to the services. A spokesman for the trust added: “We are working to increase the recruitment and retention of permanent staff and reduce agency costs by implementing a series

of initiatives.”

An article in The Independent claimed, however, that one of the health trust’s hospitals, St. Luke’s in north London, may have to move some severely disturbed patients in the intensive care unit on to the wards as the number of beds is cut.

Separately, Julia Fraser, managing director of Medics Incorporated, claims that the health service doesn’t get the best value from the recruitment industry.

“Initiatives like the new framework agreements with agencies are not followed through and policing of contracts is focused on agencies with no one watching the NHS itself,” she said.