This guidance article provides an overview of the Direct Engagement (DE) model to support trusts in understanding the model and its key features. It follows the recent DE changes announced by HMRC.
Under a Direct Engagement model, trusts still use an agency to source the temporary worker (usually locum doctors, dentists, or Allied Health Professionals), but the trust engages and pays the worker directly. An external technology supplier or managed service provider facilitates the contract, timesheets, and payroll via an online portal.
Core features of a Direct Engagement model
1. Financial management
- Cost control: By engaging the worker directly, the trust unbundles the pay rate from the agency introduction/management fee. This structural change can generate- savings on the overall cost of the temporary placement.
- Capping agency spend: Helps trusts and Integrated Care Systems (ICS) to meet strict regional targets.
- Reinvestment: Any cash savings can be directly reinvested into frontline patient care or improving staff conditions.
2. Governance and compliance
- Terms and conditions: Temporary workers adhere directly to the trust’s specific employment terms for the duration of their placement, rather than varying terms dictated by multiple different agencies.
- Regulatory alignment and accountability: The trust has direct oversight to ensure the worker meets all necessary NHS regulatory, safety, and mandatory training requirements.
- Cost and compliance: The trust has complete, granular visibility over what the worker is being paid versus the agency’s margin. This provides transparency around gross pay and statutory deductions. This supports rigorous, auditable adherence to IR35 compliance, and discloses any umbrella company usage—including their specific margins—to support a compliant and supply chain.
3. Operational management
- Technology: The external supplier provides a unified online portal where workers manage their contracts, submit timesheets, and track payments.
- Administration: HR, finance, and ward managers deal with one streamlined workflow and system, reducing the complexity of coordinating booking and payroll processes across individual agencies.
4. Worker experience
- Payments: Direct, automated timesheet processing can lead to quicker, more reliable, and regulated payment cycles.
- Communication: Workers deal directly with the trust for employment matters, which can support faster issue resolution and stronger workplace integration.
- Added worker benefits: Depending on the specific DE model deployed, workers may have access to NHS pension schemes.
Benefits of appointing the supplier via an NHS Workforce Alliance framework
- Compliance: Procuring through the framework ensures complete adherence to public procurement regulations (such as the Procurement Act) and NHS England’s agency rules, removing legal and financial risks for the trust.
- Commercial protections: Frameworks secure pre-agreed maximum rates, standard legal protections, and eliminate hidden reseller fees, ensuring the trust gets the best possible commercial value.
- Pre-vetted quality: Any external supplier on the framework has been rigorously assessed, audited, and actively managed by the Alliance for performance and security standards.
- Strategic alignment: Framework solutions are specifically designed to support the NHS Long Term Workforce Plan, giving trusts access to expert guidance on market dynamics and long-term workforce sustainability.
If you require support to implement a DE model or an alternative staffing solution, please complete the contact form on our website and your regional team will be in touch to discuss your requirements.