NHS leaders are divided over a possible move away from national pay bargaining, although most managers with responsibilities over pay bills support greater local flexibility.
HSJ’s survey of more than 500 readers saw many respondents indicate they disapproved of chancellor George Osborne’s decision to review how NHS pay could better reflect local job markets.
Overall, 37 per cent of survey respondents wanted NHS pay negotiations to take place at a more local or regional level than now, while 60 per cent did not.
The results were reversed for the 83 chief executives, finance managers and human resources managers who responded, with 60 per cent backing local pay and 40 per cent not. This is despite concerns, previously raised in HSJ, about the possible legal and resource implications of shifting to local pay.
Nearly two thirds (64 per cent) of all respondents thought local pay would mean the majority of staff being paid less than now. Those in the North East, North West and West Midlands were most likely to say so.
However, the willingness of trusts to reduce pay was disputed by some workforce experts. York University health economist Karen Bloor said local pay would probably only “inflate” wages in areas with high costs of living.
“It’s potentially quite costly,” she said.
The biggest regional variation allowed under Agenda for Change is 20 per cent of salary, up to a maximum £6,217 in inner London. Some trusts say the strict limit creates recruitment problems.
John Van Reenen, director of the London School of Economics centre for economic performance, said the inability of London trusts to pay more was “ultimately endangering patient safety” due to difficulties attracting experienced, highly skilled nurses. He co-authored a 2008 study that found a link between lower relative wages in London and higher patient mortality.
Asked which aspects of pay they wanted greater control over, the biggest proportion of survey respondents – 45 per cent – said clinical excellence awards. Meanwhile, 38 per cent said overtime pay, 37 per cent increments, 21 per cent sickness pay and 18 per cent annual leave entitlement.
More than a quarter (28 per cent) wanted trusts to have more control over all pay and benefits, including those currently stipulated in national pay frameworks such as Agenda for Change.
Although the survey indicated a desire for greater control over clinical excellence awards, they are not being looked at by the upcoming review of local pay, which will only address Agenda for Change.
A review into the affordability of the awards was launched by the doctors’ and dentists’ pay review body in September last year and the Department of Health responded this June, calling for a greater number of “non-financial” rewards.
But no decision on the awards has been announced, despite concern over medical consultant costs. National clinical excellence awards are worth up to £76,000 a year per individual, while trusts also pay local awards of up to £35,000.
At a King’s Fund breakfast meeting last week, KPMG global head of health Mark Britnell revealed that an unpublished survey commissioned by the EU showed UK consultants were in the lowest quartile for productivity and the highest quartile for pay.
Nearly half (48 per cent) of HSJ survey respondents thought consultants should be paid less, while half said board directors and 8 per cent said nurses.
Mr Osborne asked the pay review body to consider the “most appropriate [regional or local] zones” for determining pay levels.
David Wood, Salford Royal Foundation Trust director of organisational development and corporate affairs, said setting pay regionally, as opposed to individually by trusts, would “produce more stability” but he questioned how this would affect locations neighbouring other regions. He warned caution was needed to avoid recruitment problems.