A centralised licensing system for nursing agencies planned for 2002 may put smaller agencies out of business, the Federation of Independent Nursing Agencies (FINA) has warned.

From April 2002, the licensing of healthcare agencies in England will be centralised and brought under the remit of the National Care Standards Commission. At present local authorities license agencies.

The new scheme is designed to raise standards in healthcare provision. ‘Of course we all applaud the intention to improve standards and patient welfare, but I don’t think the effect has been properly thought through,’ said Robert Murgatroyd, FINA president and chief executive of Thornbury Nursing Services.

It is understood the cost of licensing an agency may rise from £120 at present to £1,000 a year, rising to £2,500 within five years. The cost of auditing will rise from £1,000 to £5,000 in five years. Fee levels have not yet been finalised.

‘Many agencies will be excluded by these regulations, but not because they’re not doing a good job,’ said Murgatroyd. ‘Larger agencies will be able to absorb these costs. But bigger isn’t necessarily better.’

The Department of Health has not consulted enough types of agency, said Murgatroyd: ‘I am sure that they have had meetings with some of the bigger players, but FINA wasn’t consulted until late in the day.’ In response to FINA’s comments, Murgatroyd was told that the DoH ‘do not believe that these [price increases] will fall particularly disproportionately on the smaller agencies.’

‘A lot of very good agencies are run by one or two nurses on very low margins,’ Murgatroyd added. ‘We’re going to end up with just a few big players if this goes through. That can’t be good for anyone.’