Health service managers were treated to a rare example of partnership working last week when trade unions, managers and the NHS Executive gave their first 'report back' on talks on the government's proposed new pay system.

As Ian Stone, personnel director of United Bristol Hospitals trust and outgoing president of the Association of Healthcare Human Resource Management, put it: 'It was almost as if it didn't matter who gave which bit of the report. They are clearly working together and the talks are not an example of the old style of confrontational negotiations.'

The harmony was slightly spoiled by the leak in last week's HSJ of some of the contents of a joint statement, which is still being drafted, on where the talks have got to so far (news, page 2, 16 September).

Unison head of health Bob Abberley made a caustic comment about 'private meetings' being reported in HSJ, and NHS Confederation human resources chair Andrew Foster made plain his displeasure by referring to 'a relatively small team' which understood the 'sensitivities' surrounding the negotiations.

It was only when the draft statement had been passed to a wider group that it had become public, he said. The final version, which will spell out the way forward, will be published in October.

The pay talks session was a last-minute addition to the AHHRM's annual conference programme at Warwick University. Mr Stone told HSJ that it had not been clear that there would be enough to say when the programme was being drawn up.

Aileen Simkins, NHS Executive head of pay, told the conference that terms and conditions 'are 1940s shipyard for much of our staff'. She disclosed that the terminology has now been changed from 'national' to NHS-wide in deference to devolution.

And she confirmed that many of the government's proposals, set out in the consultation document Agenda for Change, are still in place despite the objections voiced when they were published.

Core conditions, pay spines, job evaluation and pay lift will all be set on a UK-wide basis, for example. But local employers will be responsible for job 'design', have the freedom to set pay bands, and to make decisions about pay progression which would replace automatic increments.

Ray Mailly, who is on secondment to the NHS Executive from his job as HR director at Nottingham City Hospital trust, set out the need for change from the employers' viewpoint.

The present system, he said, 'is unfair to staff. It does have in-built indefensible inequalities that we have to change'.

It did not allow recognition of the fact that people developed competencies over time, nor did it facilitate modern working methods or team working.

'We do need a system that is equal value-proof,' he added, to avoid 'sporadic legal challenges'. The rate for the job needed to be established, with the 'myriad of added allowances' removed. The new system should ensure that staff are properly rewarded and properly measured.

Unison's national secretary for health, Paul Marks, told the conference that there was much he could agree with in what Mr Mailly had said.

'We know the system must change,' he said. 'But change can be frightening and we need to address those fears if we are to have a hope of being successful.'

For example, people feared that differential treatment would be repeated under the proposed parallel systems for determining pay - with review bodies for doctors and nurses and a single body for the rest.

And he pointed out that the 3 per cent offer to non-review body staff was the 'reason we are about to have a ballot' on industrial action.

That was a point Mr Abberley had made earlier in a panel session in which trade unionists answered delegates' questions.

'There is a big gap between what the government says - all of which is good - and the experience of people on the ground,' he said.

He forecast that the ballot would be followed by action in December. 'Something has gone wrong somewhere,' he added. 'What the NHS Executive should do is pick out two or three things that really do affect people in the front line so they feel some change has taken place.

'It is going to be incredibly damaging to all we are trying to do if we find ourselves in a traditional industrial relations scenario.'

It was not a prospect many delegates cherished, either, although there is not much they can do about ministerial decisions on which they are not consulted.

Optimistically, AHHRM called the conference 'Mainstreaming HR', but NHS HR director Hugh Taylor indicated that there could still be a long way before that becomes a reality.

Certainly, ministers are making HR a priority and NHS chief executive Sir Alan Langlands is on record as saying: 'HR is the new bottom line.' But Mr Taylor doubted that it is yet accepted throughout the service.

With negotiations about to start on the next comprehensive spending review, he said it was vital to demonstrate what HR directors knew to be true - that good HR practices produce better results for any organisation.

'Demonstrating what works is going to get HR into the mainstream,' Mr Taylor said.

A delegate pointed out that£40m had been promised for HR development, only to be diverted into waiting-list and winter pressures work. Would there now be more money for HR?

Mr Taylor evaded the question. The£40m had recognised the pressures felt by staff, and there had been a lot of criticism at the centre 'because of the ham-stringing that went on'.

He said last year's pay awards 'pushed us right to the extremes of affordability'. But there had also been a signal that HR was important, too. 'We are about to launch another round of discussions about the next comprehensive spending round,' Mr Taylor said.

Mr Taylor disclosed that the Executive is developing a draft performance- management framework for HR which would be widely shared with the service later this year. 'We don't want a punishment model, but we have to have performance management to enable an overview to be taken of progress,' he said.

The new framework would be based on what was known to work best - self- assessment. He said research showed that 'autonomy is coming across more and more strongly' as a motivator.