Limited company contractors delivering vital IT development services and support are essential to keeping vital National Health Service (NHS) systems running. And their use is growing.
“The UK’s NHS is a global leader in developing IT systems to improve medicine and health services delivery,” explains Don Tomlinson, managing director of specialist NHS recruitment agency max20. “Without limited company contractors, delivery of existing IT systems and development work would grind to a halt.
“And because getting it wrong can literally cost lives, NHS procurement of the best IT contractor talent is highly professional and competitive,” he adds.
Tomlinson’s words act as a stark warning to cabinet ministers and some in the media who appear intent on hounding limited company contractors and interims out of the public sector.
NHS trailblazing web and mobile technologies, creating contract opportunities
According to Tomlinson, the NHS is pioneering mobile and online service delivery in the healthcare sector, so is always seeking IT contractors from other industries who can bring new skills and a fresh perspective.
“There are some assignments, such as in the field of healthcare data analytics, where previous NHS experience is clearly essential,” he continues. “But we’re sourcing IT contractors with mobile and web skills and capabilities from backgrounds in banking, manufacturing and even gaming.”
IT departments within the NHS, called Health Informatics Services (HIS), each typically serve around a dozen hospitals and their supporting health service infrastructure on a commercial basis. Each HIS has a core staff of employees comprising about 30-40% of the headcount, with the rest being IT contractors.
“IT contractor use in the NHS continues to grow because, despite government cuts freezing or reducing headcounts, the tasks still need to be completed and that means hiring contractors,” says Tomlinson.
‘Repeat business’ nationwide
And once ‘in’, Tomlinson explains that, assuming they perform well, IT contractors typically have a 30-40% chance of being recalled to a former HIS client, because internal recruiters are good at recognising the best talent.
The same is true of different HIS’s country-wide: “A contractor successfully completing a project who has a good reputation might find they get called back six months later to work on a fresh development project with a former NHS client.
“Equally, they might find a contract opportunity open up elsewhere in the UK, because essentially each HIS is looking for the same skill sets, as they support delivery of similar types of medical and healthcare services.”
Competitive procurement practices and rates
IT contractor recruitment within the NHS is highly professional and offers competitive rates, despite contractor pay being pegged to the national pay framework for employees, says Tomlinson.
“All NHS employees, apart from consultants, are subject to national pay grades ranging from 1 to 10. Every contract assignment is pegged to a pay grade, which is completely transparent.”
IT contractor use in the NHS continues to grow
Don Tomlinson, max20
A contractor hired to work on a helpdesk is likely to be on one of the lower grades, and would usually work through a PAYE umbrella. Assignments for more experienced IT contractors, such as developers, project managers and analysts will be on higher grades – equating to £300-£500 a day – and these are more likely to be taken up by limited company contractors.
Tomlinson says this reflects the pragmatic attitude NHS IT procurement teams adopt when hiring, because they understand that to buy in top talent, you have to pay market rates. The same approach is applied to project specification, and because the business needs of IT development projects are understood and properly scoped, so are the resourcing requirements.
IR35 and challenges from HR
Although pegging rates of pay to national employee pay grades would normally set IR35 alarm bells ringing, NHS IT contractors are typically just as ‘in-business’ as contractors in other sectors.
Tomlinson explains: “We routinely receive requests from our contractors to remove termination clauses from contracts and make other adjustments to reinforce their outside IR35 status.”
But on occasion, he adds, a human resources (HR) department gets the wrong end of the stick: “Umbrella contractors in particular are often challenged about their employment status within an HIS, and we find ourselves having to explain the exact nature of the relationship.”
The future of NHS IT contracting looks exciting
Tomlinson highlights that, because many IT projects within the NHS can take three to five years to implement, as an organisation the NHS takes a long-term view of technology needs and skills requirements. “That’s why the NHS is a global leader in healthcare service provision technologies, particularly in web and mobile, so it can be an incredibly exciting place to be for an IT contractor.”
With major structural reforms in the pipeline, there is set to be huge change within the organisation, and one in which IT contractors will play a vital role.
Tomlinson concludes: “The NHS can’t cope without IT contractors, so offers competitive rates and opportunities to work at the cutting edge and learn new skills. The next three to five years promise to be an exciting time for the healthcare IT sector, and IT contractors have an essential part to play in that future.”