Healthier Future for NHS Contractors?

Prior to the introduction of the revised rules for intermediaries working in the public sector in April 2017, NHS Improvement issued guidance on how NHS providers should deal with workers affected by the amended legislation. Updated guidance was issued on 30 May 2017.


Previously, the guidance indicated that providers should ensure that all locum, agency and bank staff were subject to PAYE and on payroll. No thought was given to actually looking at the terms and conduct of the various engagements and seeing whether or not the revised rules actually applied.

Fortunately, the new, and improved, guidance gives a more conventional reading of the current arrangements for contractors in the public sector, emphasising that assessments of status must be based on the facts of the engagement, with each engagement being looked at individually and with no decisions being made across a broad swathe of roles. In what is a fair rebalancing of the advice, NHS Improvement goes on to say that all facts relevant to the engagement should be taken into account, including any representations from the individual workers concerned, and all information should be assessed fairly.

Reference has been given to HMRC’s on-line status indicator tool, which, to be fair to the authors of the original guidance, was not available at that time. It’s also recognised that carrying out the necessary reviews will impose a large administrative burden on many NHS providers. Those who may be tempted to cut corners due to time and/or cash constraints are reminded of the duties that are placed on public sector bodies by the current regime, but balances this by noting that flawed assessments could lead to additional costs being incurred. The clear message is, ‘Do it properly and get it right!’

It’s good to see that the NHS has reacted to criticisms in this area and has amended its guidance comparatively quickly. It would have been even better if enough time had been taken over the introduction of the new rules, so that all public sector bodies properly understood their responsibilities in this area before the implementation date. Perhaps, now that at least one significant public sector body has grasped the correct meaning of the legislation, this type of balanced guidance could be rolled out across all such bodies, so that contractors in the public sector stand a better chance of being treated fairly.

If you have any queries that relate to the new rules governing contractors in the public sector, please email or call 01462 687 333 and we will help you understand your position.

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