Agenda for Change does not need to be scrapped and renegotiated - just applied properly

The draft document on terms and conditions of employment that was inadvertently released by the Foundation Trust Network recently makes for interesting reading. While the document was quickly retracted, its suggestions illustrate that some employers are starting to think long and hard about workforce productivity and nationally negotiated terms and conditions of employment.

The problem with Agenda for Change is to be found in its partial local implementation and not its stated national aims

There is a sense that there is unfinished business from Agenda for Change, the consultant contract and the quality and outcomes framework, especially in light of the £15bn-£20bn efficiency drive the NHS will face over the next comprehensive spending review period. With workforce costs representing the major part of expenditure, it seems that some may be prepared to reopen the debate.

In my opinion, this may prove to be a costly folly and distraction as the existing contracts should, and can, be made to work harder and smarter. They can do this through improved strategic and operational performance systems that link organisational objectives with reinvigorated staff appraisal and motivation techniques. Put simply, the efficiency challenge facing the NHS cannot be done in spite of staff but has to be done with, and by, them. While the term “human capital” quite rightly makes some cringe, there can be no doubt that the best performing organisations take education, training, appraisal and development very seriously and align these to improved organisational performance, profitability and productivity. The problem with Agenda for Change is to be found in its partial local implementation and not its stated national aims for pay modernisation.

It should also be remembered that Agenda for Change took five years to negotiate. Whoever wins the next election would do well to remember that national negotiations take a long time and are usually expensive to implement. First conceived in 1999, it took until 2004 for agreement to be reached across 54 professional groups. Agenda for Change was designed to enable staff to give their best for patients while working in new ways, breaking down traditional barriers to optimal patient care. Pay was to be fair and equitable with career progression based on responsibility, competence and satisfactory performance.

Full potential

The NHS does not have the time to nationally renegotiate terms and conditions and there is scant evidence that local freedoms, especially for foundation trusts, have been used in any material fashion to date.

The national deal has been expensive. Originally, the Department of Health estimated there would be net savings in the order of £1.3bn. However, general measures of productivity over the past decade suggest a fall of around 2.5 per cent a year while, for example, nursing pay (some 40 per cent of the total wage bill) has risen by roughly 4.2 per cent a year since 2003-04.

The original business case submitted to the Treasury anticipated efficiency gains yet no national guidance or productivity measurements accompanied implementation guidance for Agenda for Change itself. Theory and practice deviated as nearly all employers simply transferred staff to new pay bandings. This resulted in a £7.4bn increase in the annual wage bill between 2003-04 and 2007-08 (65 per cent of which came through higher pay, the remainder through pension contributions and extra staff numbers).

During implementation, there was little time for role redesign and clinical pathway transformation. That time has now surely come.

There is an opportunity to increase productivity by applying the knowledge and skills framework to clinical pathway redesign in a different fashion. The framework envisaged an annual staff review with an agreed personal development plan with two pay gateways that could be passed subject to satisfactory performance. However, the National Audit Office has found that only “a small number of trusts have integrated KSF into their performance management systems” and it suggested that the framework needed to be accompanied with clear leadership and management to achieve the full potential of pay modernisation.

Further, only 6 per cent of staff in an NAO survey agreed with the statement: “I feel that I am more productive as a result of Agenda for Change/KSF”. In short, the knowledge and skills framework should now be linked to all organisational objectives and performance management systems, and staff appraisal should be directed towards organisational effectiveness and efficiency.

The systematic application of, for example, “lean” training, could equip more than 1.1 million staff with new skills for their jobs. Improved ward, department, directorate and organisational objectives that link quality, innovation, productivity and prevention could transform the way efficiency gains are achieved through the systematic adoption of improved staff training and appraisal systems. The possibility to do this at scale and pace does exist through the (seldom used) electronic KSF process, and it is probably sensible for the KSF itself to be locally refined and tailored.

There is no shortcut to developing staff and appraising them properly but the rewards are obvious. In these uncertain times with a greater requirement for efficiency than ever before, systematic objective setting, appraisal and development can take staff a long way to achieving the aims described in Good to Great and High Quality Care for All.