While progress on a new NHS-wide pay system is faltering, there is still a lot of common ground between unions and managers.

Health service pay will loom large on the agenda of the trades union Congress, which opens in Blackpool on September 14.

Fuelled by anger over the phasing of last year's awards, health unions are also concerned that their members are falling further behind because private sector pay awards are running at double the rate in the public sector.

Both problems are acknowledged by Andrew Foster, chair of human resources for the NHS Confederation. He believes that some of the passion relates to differential treatment.

What nurses are concerned about, he says, is not necessarily the absolute level of pay, but a sense of unfairness 'because pay is slipping behind the private sector, because of the staged awards, and because of the higher award for doctors'.

There is also the problem of recruitment and retention, which three quarters of the managers responding to the confederation's annual survey acknowledge is a matter of concern. There is a real difficulty for employers, who need to tackle the problem, but who know through the comprehensive spending review how much money is going to be available.

'We are not in a position to give too much more than inflation,' Mr Foster says.

A slightly above-inflation level award may be enough to head off the 'substantial head of steam' building up from health service union members if the government can demonstrate that its promised new national pay structure is taking shape.

So far, the portents are not good. Health minister Alan Milburn is expected to begin talks on the new pay structure at about the time Congress begins.

But apart from a consultation document last year, which presented a situation report but no proposals, the only real sign of activity has been the ill- fated job evaluation working party from which doctors have been excluded on the insistence of the British Medical Association, which led to a walk- out by the Royal College of Nursing.

Mr Foster is relieved that the BMA is at least attending the working party talks as an observer, but detects a real change in atmosphere since the departure of Sir Alexander Macara as its chair. 'Sandy Macara was keen to work with the confederation, the RCN, Unison and others,' he says. But almost from day one there has been a more 'oppostional' mode at the BMA.

That may change once the real work on a new national pay structure gets under way. With the NHS facing growing numbers of equal pay claims, including some where nurses seek to compare themselves with doctors, any new system must take on board the need for equity and fairness.

Pay arrangements for doctors have never been subjected to scrutiny on whether they meet equal pay or anti-discrimination criteria, but would be expected to under any new pay structure.

Despite the lack of progress on the new system, there is a lot of common ground between employers and unions on what it might look like. There is virtually universal acceptance that there should be national awards each year, with some sort of pay review body covering everybody - although in practice that may still mean separate bodies for different occupational groups.

However, there is another potential problem on the horizon. The new Scottish Parliament may wish to extend its powers to run the health service in Scotland to cover issues of pay. At present, no decision has been taken, but a 'national' pay scheme that covers only England and Wales could open another round of equal pay claims.

The unions are keeping up their sleeves a legal opinion which says that under European law, equal pay cases can be pursued across trusts as well as within them because the NHS is one service. If the Scottish Parliament voted to pay NHS staff more money, that principle could well be put to the test.