Agenda for Change could survive regional pay push

The department today published its evidence to the NHS Pay Review Body, arguing there is a “prima facie” case for more regional pay in the NHS.

Higher pay in some areas would be funded by constraining pay elsewhere in the country.

Signalling its desire to retain Agenda for Change, the DH said it “believes that the most simple, cost-effective and safe way to introduce more market facing pay” would be to “retain national collective agreements”.

Rather than pushing for local pay scales, the DH document calls for high cost area supplements - similar to London weighting - to be bolted onto the framework.

The document makes two suggestions for possible higher pay zones.

The first option would cover the London and much of the south, including most of the home counties, Hampshire and the Bristol area.

A second option would include two zones. This would comprise the areas covered by the first option, as well as parts of the Midlands including Warwickshire, Leicestershire, Nottingham and Derby, as well as the areas in and around Manchester and Leeds.

Staff working in other parts of England would suffer what the DH describes as “a prolonged period of constrained headline pay awards” to allow “headroom” for the higher wages paid in higher paid zones to build up.

No extra funding will be made available to providers in these higher pay zones. The extra cost will need to be found from existing budgets.

The DH accepted this could cause issues for some employers and argued for a slower implementation of regional pay.

It said: “From the point of view of facilitating local affordability and stability, this suggests a case for limiting the pace of change to a locally manageable level. If a faster transition is sought then the DH would need to consider whether any transitional measures to ease implementation issues were justified.”

The evidence document offers no suggestions on incremental pay rises - averaging 2.5 per cent - which are continuing to increase the overall NHS pay bill.

The DH said it thought its plans for “market facing pay” could start to be implemented as early as April next year.

It said: “Current rates of pay in the NHS do vary geographically, but significantly less so than the pay of comparable staff in the private sector. The introduction of more sensitive market facing pay would enable more efficient and effective use of NHS funds.”

Health unions have repeated their opposition to any plans that would lead to reduced pay.

Responding to the DH submission, Unison head of nursing Gail Adams said: “What will not work is any reduction in the level of earning. That’s where the problem will be.

“Nurses are already facing a pay cut, the government says it is a pay freeze but the reality is their cost of living, utility bills and mortgages etc have all gone up.”

Royal College of Nursing chief executive and general secretary Peter Carter said: “It remains our belief that a move to local pay among NHS staff will lead to damaging competition between trusts for staff, drive down pay in certain areas and risk lasting damage to staff morale and motivation.

“The current system is tried and tested. It ensures that employers in any part of the country can recruit staff with the right skills and experience to give patients the care that they need.”

The NHS pay review body is due to report to the government in July on whether, and how, pay could be made more in line with private sector rates.