Spending on agency staff across NHS England dropped by almost £1bn in the last financial year, ministers have said, after a pledge by Wes Streeting to cut the amount going to agencies by 30%.

According to the Department of Health and Social Care, the total spent by trusts on agency staff during 2024-25 was nearly £1bn lower than the previous year.

In a speech to the NHS Providers conference in November, Streeting, the health secretary, said a lack of permanent staff had seen gaps filled by more expensive agency-provided replacements totalling about £3bn a year.

Under proposals outlined at the time, but not yet enacted, Streeting suggested that NHS trusts could be completely banned from using agency staff for lower level jobs such as healthcare assistants and domestic support workers.

This could also involve stopping NHS staff from resigning and then immediately signing on with an agency, so they can do the same work for higher wages, and a much higher overall cost to the NHS.

In addition to employing agency staff, which can mean paying a doctor thousand of pounds for a single shift, NHS trusts also routinely plug gaps by using what are known as “bank” staff – NHS employees who do extra shifts at their own workplace or one nearby, via an organisation usually run by the trust.

UK-wide figures reported by the Guardian in January 2024 showed that the combined spend of hospitals and GP surgeries for agency staff was an annual £4.6bn, with another £5.8bn used for bank shifts.

As part of the clampdown on agency spending, Streeting and James Mackey, the chief executive of the imminently abolished NHS England, have jointly written to all NHS providers and integrated care board executives to set out that each should target the 30% reduction, and that their progress will be monitored.

“If we do not feel that sufficient progress is being made by the autumn, we will consider what further legislative steps we should take to ensure that use of agency staff is brought to an end,” they wrote.

The letter also says hospital bosses should make surethe pay rates for bank shifts “are competitive but do not exceed those paid by agencies directly to the worker”. Trusts have already been ordered to reduce bank use by at least 10%.

Elizabeth O’Mahony, NHS England’s chief financial officer, said: “The NHS is fully committed to making sure that every penny of taxpayers’ money is used wisely to the benefit of patients and the quality of care they receive.

“Our reforms towards driving down agency spend by nearly £1bn over the past year will boost frontline services and help to cut down waiting lists, while ensuring fairness for our permanent staff.”