Duncan Brown considers the myths around employee pay in the health service
With Ford’s striking seamstresses playing to full houses in the West End show Made in Dagenham at the moment, it was still strange to pass a picket line on my way into one of London’s major hospitals on Monday.
It was an extremely good-natured protest populated by maintenance staff, nurses and midwives who were leafleting passers-by. Thousands of NHS workers staged a second four-hour walk out, the first major industrial action in 32 years and the first ever in the Royal College of Midwives’ history.
Reading the ‘NHS pay myth buster’ the staff were handing out provides a useful structure to consider how we got to this situation and how pay in the NHS might evolve.
Myth 1 - “NHS workers are on inflated wages”
A myth indeed, though not one that I hear many HR managers or members of the public subscribing too. Most of us would agree that an average salary for NHS staff (given the general level of skills and qualifications required) just above national average earnings at £26,000 a year represents pretty good value for money.
With successive years of pay freezes and then 1 per cent awards, this has fallen in real terms since 2010 by an unprecedented 12 per cent, which goes a long-way to explaining the general and genuine anger among staff at the government’s refusal to pay the 1 per cent award to everyone.
Myth 2 - “The NHS cannot afford to give the 1 per cent to all staff without risking frontline jobs”
Health Secretary Jeremy Hunt’s rationale for ignoring the recommendations of the Independent Pay Review Body (to pay the rise to all staff) was that it would mean cutting up to 14,000 nursing jobs.
He decided that the increase would not apply to staff eligible for a pay progression increment, which is typically worth around 3 per cent.
But affordability is virtually impossible to determine.
And as pay is the NHS’s biggest cost, ongoing pay restraint in the public sector will remain at the core of the government’s deficit reduction plans.
Yet there is clearly a balance to be struck between cost control and staff motivation and reward.
NHS chief executive Simon Stevens has said that the answer cannot simply be to ask hard-pressed staff to do more of the same for the same pay.
It will require major changes, including “the innovation value of new providers, more professional authority for nurses and midwives, redesigned jobs and pay systems”, he said.
In 2013, the Department of Health sanctioned the renegotiation of the Agenda for Change national pay agreement for staff, just months before Hunt’s announcement.
The revised terms allowed employers greater flexibility to link pay progression to performance and contribution. This was to help avoid the relatively automatic progression up some lengthy and overlapping incremental scales.
Myth 3 - “Agenda for Change is not fit for purpose”
The national framework of terms and conditions, introduced in the world’s largest pay restructuring exercise, which affected more than one million employees in 2004, has brought many benefits.
These include the provision of sector-wide career structures and the restrictions placed on pay ‘leap-frogging’ between the more than 500 individual employers which make up the service.
But looking at other large employers very few pay structures have remained unaltered for more than a decade.
Advances in science and technology and the move towards a 24/7 service suggest the future of pay will look very different.
There are likely to be narrower, non-overlapping pay scales, greater flexibility of working methods and times.
The proportion of the wage budget currently earmarked for the complex range of pay supplements, premia and add-ons will be reduced, while a ‘living wage’ minimum floor could be brought in to balance this out.
On this basis, it’s not difficult to see a negotiated, forward-looking, service-supporting pay deal emerging.
This is something the Dagenham women managed to achieve more than 40 years earlier when their demands for pay equality were met and the first Equal Pay Act was passed.
Innovative pay and reward methods will be vital, as Stevens says, to “unleashing the passion and drive of the frontline NHS staff who are devoting their professional lives to caring”.
However, when ministers ignore the recommendations of an independent pay body despite majority public support and a national strike, it hardly seems like a positive start in harnessing that drive and negotiating that forward-looking framework.