New year, new NHS Executive head of human resources - and a new pay agenda in the offing. Barbara Millar explores the options for replacing local pay determination in 1998

When Hugh Taylor arrived for his first day at the NHS Executive headquarters in Leeds last week, his in-tray would already have been piled high with work and advice on how he should go about it.

But the overriding message for the new head of NHS human resources from those in the service could hardly be clearer: the new pay agenda should not be just about pay.

After half a decade or more in which the overwhelming aim has been to introduce local determination, it will fall to Mr Taylor, former administration and services director with the prison service, to set a new direction.

For the past three months the Executive has been in 'wide-ranging exploratory talks' with staff representatives and employers on possible changes to the arrangements for determining pay and conditions for staff on national contracts, and the implications this will have for those on trust contracts.

Staff and employer organisations have also submitted detailed documents outlining their positions on the issues.

For the Royal College of Nursing the future is not just about how much nurses are paid. 'Fair pay is crucial but other things matter as well,' says Phil Gray, the RCN's head of labour relations.

'Nurses want to be valued for the work they do, but they also deserve a career structure which builds on their skills and offers the right support to help them deliver high-quality patient care.'

The RCN wants to see better annual leave, entitlement and hours of work, 'which have not changed for years', says Mr Gray. It also wants career structures based on clinical grading, a higher priority for health and safety, childcare and family-friendly policies, and career development and educational opportunities built up.

Equal pay for work of equal value is also 'a key issue in any discussions on a new national framework for pay', says Mr Gray.

The Association of Healthcare Human Resource Management believes local pay has brought benefits to trusts. 'But we recognise the environment is changing and we are keen to work with the Executive and trade unions to develop a system for the future,' says AHHRM spokesman Peter Murphy.

'We want to see a pay system which recognises that there are different labour markets, major differences in geography, and that trusts need to have the ability to be able to use pay in order to recruit, retain and motivate.'

The association is keen to avoid going back to central direction, Mr Murphy says. 'AHHRM wants to see the continuation of a degree of flexibility to match local needs, but it has to be a system that everyone can buy into.'

He cannot understand the government's suggestion that local pay and conditions can stay for those already appointed on trust contracts.

Paul Marks, Unison's deputy head of health, agrees it is 'an illogical position' to believe you can have a new national pay system and trust contracts.

'If the new system is going to reflect how jobs have changed and different working patterns, then you don't need trusts to have their own system,' he says. 'If we create an all-singing, all-dancing new national system, the need for trust contracts disappears.'

The government should not give up on trust contracts just yet, he adds. It should wait to see how the negotiations go. 'There are two routes out of the present position: one is to sort it all out nationally. But if the present system is not reformable because people refuse to reform, the local route will have to be used to deal with issues such as equal pay for work of equal value.'

Equal pay for work of equal value is one of two 'fundamental principles' MSF argues should underpin any new pay system. The other is that any new pay system should be service-led, to help the NHS achieve its goals.

'Pay is not an end in itself,' says the union's health secretary, Roger Kline. 'It is a means to an end - to recruit and retain staff, to motivate staff, to reward fairly the contribution staff make to the NHS. A shortcoming of some of the recent developments in NHS pay has been a failure to understand the psychological contract that is an essential part of staff motivation in the NHS.'

Mr Kline says the current national system is 'not sustainable' because of the issues around equal pay for work of equal value. However radically the existing structures are 'tweaked', they just won't cope, he says.

'Radical change of some sort is inevitable.'

Neither does MSF believe that any other scheme - including the two main alternatives, job evaluation and competency-based pay - can be lifted 'off the peg' for use in the NHS.

'The NHS does not have a good track record in devising pay systems and structures which motivate staff, facilitate change and improve recruitment and retention. It is prone to fads and quick fixes,' says Mr Kline. But quick fixes will simply repeat past mistakes, he warns.

Meanwhile, the NHS Confederation is keen to ensure that the 'spirit of partnership' between the NHS, employers and staff representative organisations - which the discussions around a new pay system have created - does not disappear.

'It has taken many months to build up that feeling of partnership,' says Jane Keep, the Confederation's special projects adviser for human resources. 'Each group involved in these discussions must continue to be seen as an equal partner.'

She reiterates the message that the process is not just about the mechanisms of pay. 'It is much wider than that,' she insists.

'It is about addressing all the issues around pay and reward, and how the workforce should be treated.'