Temporary nurses play a key role in the NHS

The NAO found trusts had cut costs on expensive agency nurses but still relied on other temporary staff.

The report said many trusts lacked the data needed to work out cost-effective staffing levels.

It found spending on temporary staff ranged from less than 5% to 29% of total nursing staff budgets.

There is scope to obtain greater value for money by improving the procurement and management of all temporary nursing staff Sir John Bourn

Trusts in the south of England relied more on temporary nursing staff than those in the north.

Temporary staff can be employed through independent agencies, trusts' own nursing banks, or the national temporary staffing service, NHS Professionals.

Overall, the NAO report found that acute and foundation trusts spent �790m on temporary nursing staff in 2004-05 - 9.4% of the total expenditure on nursing.

Of this, 3% was spent on agency staff - the most expensive type of temporary worker - down from a high of 7%.

Fluctuating demand

However, the report found that trusts have paid less attention to addressing the wider issues of controlling and managing demand for all types of temporary nursing staff.

Too many trusts simply do not have the information to make effective use of their staff and are relying on temporary nurses to mask their own inability to manage their permanent staff properly Edward Leigh

The NAO accepted that using temporary staff helped many trusts respond to fluctuations in demand for services.

But it warned that failure to manage the use of temporary staff effectively could be costly - and affect patient satisfaction and staff morale.

The report found that work by NHS Professionals and the NHS Purchasing and Supply Agency had improved the cost and quality of temporary nursing staff.

But it said more needs to be done to ensure that all temporary staffing suppliers are operating to consistent standards.

It said trusts had to develop mechanisms that would allow them to flex their staffing levels and remain in financial balance whilst ensuring they provided a safe and effective service for patients.

Value for money

Sir John Bourn, NAO comptroller, said: "Trusts have been successful at reducing expenditure on agency nursing staff but there is scope to obtain greater value for money by improving the procurement and management of all temporary nursing staff.

"It is very important that trusts further develop their understanding of their demand for all nursing staff as the ability to be able to manage the workforce effectively will play a major part in determining whether trusts remain in financial balance under payment by results."

Edward Leigh, chairman of the Commons Public Accounts Committee, said it was key that, at a time when many trusts were reporting deficits, the NHS made best use of temporary staff.

He said: "I am particularly concerned that this report shows that too many trusts simply do not have the information to make effective use of their staff and are relying on temporary nurses to mask their own inability to manage their permanent staff properly."

Sian Thomas, deputy director at NHS Employers, said helping NHS trusts to better manage their temporary staffing was a key priority.

She said trusts had already made huge strides in reducing spending on temporary nursing staff.