Start NHS pay talks now, Steve Barnett urges

“We need to sit down with the trade unions as quickly as we can,” he told HSJ.

“If we are in a situation where we could be £20bn short, mature people are going to have to sit down and talk about how that gets managed. There cannot necessarily be inflation based [pay] increases each year.”

He said “no one” was looking to reopen the current three year pay settlement, which ends in 2010-11, but he said discussions needed to start imminently about the years after that.

Managers are concerned that without a clear new settlement, it will be hard to off-set possible job cuts with a low pay deal.

Mr Barnett said that in Ireland health workers were being given pay cuts rather than freezes. He said he didn’t necessarily think that would happen in the UK, “but we need to think and work very closely with trade unions”.

He said he did not think a long term settlement was likely, but the question of pay would need to be addressed in the round, alongside career flexibilities and the NHS pension scheme.

Mr Barnett noted that shadow health secretary Andrew Lansley had recently made comments which appeared to suggest a Conservative government would not reduce access to the pension scheme, but he added: “I wonder how viable that may be.”

“We need to look at the total reward [package]. I would anticipate the unions being up for that,” he said.

He said political uncertainties and the likelihood the next pay settlement would come under a Conservative government made things “more complicated”, but he said: “As long as we are clear about [the Conservatives’] line and policy on pay that would be fine, but we would want to know well before an election what they would be.”