Cowper’s Cut is a new weekly column from HSJ’s comment editor Andy Cowper. It will be published every Monday and seeks to serve as an informative and entertaining stimulant for HSJ’s subscribers at the start of the working week.
‘The wages of spin is debt’
Adapted from Romans 6: 23
“Turnover is vanity, profit is sanity, overhead walks on two legs”
“If we want things to stay as they are, things will have to change”
There are only three meaningful questions to be asked about the vastly pressing issue of increasing NHS workforce wages: how, by how much, and when.
The “how” is obviously important. It might seem too obvious to write (although, hey: I’m a commentator), but if there is a plan to raise NHS wages without the input of new money to fund that increase, all that happens is cuts to other non-pay budgets.
The “by how much” matters just as much. If we are to see NHS service provision improved along the lines of the Five Year Forward Hallucination, then increasing wages needs to be linked to role redesign and service redesign in equal measures.
The insightful Sara Gorton of UNISON made a good point in the NHS Workforce Inquiry 2016-17: she suggested that “widening the NHS employment footprint could work on many fronts … that begs the question of how we get buy-in to participate over wider footprints, and give staff the security they need. Many of our members talk about their fears of instability, of cuts, of services contracted and moved, and that funding streams might just dry up.
“The ability to move some money around in the new sustainability and transformation partnership footprints may free things up and allow bolder decisions. Perhaps there’ll be new conversations with staff, where employers may say ”we can’t say where you work in five years time, but we know we’ll need your skills, so we will guarantee you work if you’ll commit to stay with us’?’”
Ah, but does the NHS have the sophistication and resource in HR to ensure that wage increases would reward those who embrace service redesign and improve patient care, value for money and outcomes? I will leave that thought there, dear reader, for you to complete yourself.
The third critical question is “when”, because the economy appears to be slowing down and there remains huge uncertainty over Brexit. Every new delay in bringing the nation’s tax receipts into balance with its expenditure on public services effectively pushes public sector pay restraint even further out into the un-date-able future.
NHS staff and managers need to be able to see a credible, fixed end point to pay restraint as the main means to (almost) balancing the NHS books. Without an improbably-not-insignificant increase in income tax, that obviously won’t happen overnight, and the next two financial years are virtually fixed points – but a non-stupid government would describe a trajectory to 2019-20 as being the year where pay increases above 1 per cent are going to be A Thing.
Because there is a multiplier effect from public spending. Here’s what doesn’t happen when the vast majority of NHS staff get a pay increase: they simply don’t hoard it like Gollum. The marginal propensity to consume is absolutely A Thing. Average NHS pay is less than £30,000 a year; that is not rich. It is probably slightly higher than average pay in the UK, but it unquestionably does not represent a point at which an individual can cease to worry about money.
Clearly, we also need to consider other confounding variables, like the fact that a pound in a nurse’s pocket is worth far more in some areas of the country than in others (and the Market Forces Factor adjustment may not adequately recalibrate this reality).
But fundamentally, NHS pay, terms and conditions need to be brought up to date with how we want the service to operate and change now and in the coming years. These areas need to see the reform of illusion: they have seen only the illusion of reform.
Andy Cowper is comment editor of HSJ