Locum doctors are holding the NHS to ransom by demanding “excessive” rates of pay from cash-strapped hospitals, the service’s financial regulator has warned.

Some stand-in doctors are earning as much as £155 an hour for covering shifts in hospitals that are facing serious staff shortages, or in medical specialties in which rota gaps are common, such as A&E and radiology. The soaring pay rates have emerged through an analysis undertaken by NHS Improvement (NHSI), the health service’s financial regulator.

The lack of doctors in the NHS is now so acute that one trust in the north of England recently had to pay £10,000 a week for three consultants it hired through an employment agency in order to a maintain normal service to patients.

Jim Mackey, NHS Improvement’s chief executive, told the Observer that doctors who demand very high rates to take stand-in shifts are being unfair on permanent medics at the same hospital, who will earn less because they are on staff. The quality of care patients receive is also at risk because too many hospitals are relying heavily on temporary doctors, he added.

“There are circumstances where locums are necessary to fill short-term gaps and we recognise that the supply of doctors needs to improve. However, it is wrong from a quality, financial and fairness point of view to pay excessive rates for locums when they are working alongside hard working permanent staff on NHS terms,” he said.

Mackey admitted that NHSI’s concerted crackdown on the cost to the NHS in England of temporary staff has not yielded the savings expected among medical locums, who accounted for £1.3bn of the service’s total £3.6bn bill last year for agency staff.

Jim Mackey, NHS Improvement’s chief executive, said doctors who charge high rates were being unfair on staff colleagues who are paid less. Photograph: YouTube

A year after caps were introduced on the amounts temporary staff could be paid, many medics are still being paid above the supposedly capped rates, because the shortages of staff in some parts of the country are so severe. In the seven months between April and October NHS trusts in England spent £616m on locum doctors, or £88m a month. That is 35% of the £1.753bn NHSI said that all NHS trusts had spent in the first seven months of the year. It means that hospitals are on course to spend £1.056bn on stand-in medics this year, almost 20% less than the £1.3bn they shelled out in 2015-16.

But Mackey is frustrated that while the average cost of shifts worked by agency nurses has fallen by 18% over the last year, it is only 13% lower than it was for doctors. Hospitals, which overspent by £2.45bn last year, could save £103m a year if every medical and dental locum shift cost £10 an hour less, NHSI estimates. Mackey told a recent conference of NHS bosses that, despite the crackdown, “we haven’t yet laid a glove on the medical locum rates”. And in the Health Service Journal last week, he claimed that locums were still “playing providers off against one another” in their quest for higher rates.

The ultimate goal, he said, is that “locum use, eventually, is seen as a rare, short-term event, and the costs are brought into line with substantive employment”.

However, many doctors believe that if NHSI further cuts the rates that hospitals are allowed to pay, as Mackey has threatened, many medics will not bother taking the shifts, leaving units struggling to cope. Most locum shifts are worked by doctors who already have a job and are doing some extra work, rather than working as a locum all the time.

But a spokesman for the British Medical Association said that the growing pressures in the NHS in the face of unprecedented demand and its funding squeeze are prompting more doctors to work as locums.

“Increasingly, locums are employed because hospitals can’t attract staff to take up full-time posts. Caps do not address the root causes of the recruitment and retention problems in many parts of the NHS, especially emergency medicine, and the government’s plan to simply name and shame trusts or individuals will not address the underlying issues causing an over-reliance on agency workers,” said Dr Mark Porter, the BMA’s chair of council.

“A better solution for this issue would be to improve working conditions and rota management and introduce flexible shift patterns to help bring down agency costs,” he said.