Government accepts recommendations of NHS pay review bodies

In December 2001, the UK government announced that it would accept the recommendations made by pay review bodies covering key groups of staff employed in the National Health Service (NHS). The staff concerned will receive a pay increase of at least 3.6% from April 2002, with significantly higher increases for certain groups.

On 17 December 2001, the UK government announced that it would accept the recommendations of three independent pay review bodies covering 130,00 doctors and dentists, 52,000 professions allied to medicine (eg therapists and radiographers), and 410,000 nurses, midwives and health visitors, employed in the National Health Service (NHS). These groups of NHS staff will receive a pay increase of 3.6% or more in April 2002.

The recommendations of the pay review bodies followed a pattern set over the last four years (UK0103120F). Alongside a minimum, above-inflation, pay increase, higher settlements were targeted on groups facing severe recruitment or retention problems, and on lower-paid and newly qualified staff. For example, hospital doctors will receive a pay rise of 3.6%, general medical practitioners (GPs or 'family doctors') a rise of 4.6%, and trainee GPs an increase of 19.5%. The lowest-paid nursing auxiliaries will receive a 4.6% rise and the most senior nursing grades (eg nurse consultants) an increase of 6.6%. Newly qualified physiotherapists, radiographers and occupational therapists will receive a pay increase of 7.5%.

The government accepted that the increases should be paid in full and, noting that the 'headline' rate of inflation had declined to its lowest level for 40 years (0.7%) by December 2001, said that the pay settlements would contribute further to the recent progress made in dealing with recruitment and retention problems. As in previous years, NHS trade unions and professional associations argued that the pay increases were insufficient to restore pay relativities with non-manual and professional staff in the private sector, and that the government had seriously underestimated the severity of recruitment and retention problems, excessive workloads and declining staff morale.

Background

Each of the pay review body reports had to consider the following issues:

• the need to recruit, retain and motivate staff;

• the output targets for service delivery;

• the available funds as set out in government expenditure plans; and

• the economic and other evidence submitted by the government and NHS employers, trade unions and professional bodies.

The recommendations of the review bodies also had to take account of the incomplete contract negotiations covering hospital consultants and GPs, and delays in the timetable of the wide-ranging negotiations on a new NHS pay system. If agreement can be reached on the 'Agenda for change' proposals (UK0103120F), a lengthy implementation process could begin in mid-2002 after the government announces its public expenditure plans for the next three years. The review bodies were therefore discouraged from recommending significant changes in grading structures and pay differentials.

The evidence of the government and other parties to the review bodies was also influenced by the widespread public debate on the extent to which pay, conditions and working practices have affected the quality of UK healthcare, and the part that the private sector might play in proposals for the reform of public services (UK0111107F). The discussion below focuses mainly on the review body report on nursing staff.

Review body report on nursing staff, midwives and health visitors

The key sections of the review body report analysed evidence submitted on recruitment and retention problems and their impact on the motivation and morale of nursing staff. The Department of Health reported 'encouraging progress' in filling vacancies and expanding the workforce. It recognised, however, that there were still serious problems in London and South-East England, and that success in filling vacancies varied between hospitals in the same locality, suggesting the need to change management practices.

The separate evidence submitted by NHS employers and human resource managers, and by the trade unions, was much less positive. The review body broadly accepted this more pessimistic view, arguing that 'nursing staff recruitment must capture a greater share of a generally tight labour market ... and that it would be unwise to anticipate that recruitment and retention pressures will ease.' It also noted that there was a strong contrast between the statistical data on recruitment, turnover and vacancies, and the evidence from surveys commissioned by staff and management organisations on perceptions of what was happening at workplace level. The review body urged the parties to improve the quality of the data available on the factors attracting nursing staff to the NHS and retaining them.

The report accepted that the motivation and morale of nursing staff was fundamental to staff recruitment and retention, and evaluated the evidence submitted by the parties on the 'Improving working lives' (IWL) strategy, workload, training and development, and the ways in which grading and pay comparisons influence the perceptions of staff about how they are valued by the wider community. The report concluded that, although there was a high level of nursing staff motivation and some evidence of improving morale, there were still major problems:

1. the majority of staff surveyed believed that their workloads had increased;

2. although the IWL initiative had increased the provision of childcare and encouraged more flexible employment patterns, improvements in human resource management practices and staff training and development opportunities had been implemented unevenly across the country; and

3. in response to trade union claims that there had been a 'downgrading' of posts, the review body was not convinced that there had been a significant misapplication of the national grading criteria. It noted that the issue could be resolved only after proposals for a new job-evaluated grading structure were agreed and implemented.

Commentary

In accepting the recommendations of the pay review body for nursing staff, the secretary of state for health, Alan Milburn, stated that although there were still shortages of nurses, 'targeting pay rises is delivering results. In the last year alone the number of nurses working in the NHS has risen by 10,000.' The reaction of nursing trade unions was predictably more critical. The general secretary of the Royal College of Nursing, Beverley Malone, welcomed the higher pay increases for lower-paid staff and for nurse consultants, but said that 'this award does not go far enough to tackle the problem of recruiting and retaining nurses.'

The trade unions are not alone in believing that the pay and conditions of UK nursing staff have significantly undervalued the responsibility, skill and stress of their work for many years. The government can claim, however, that over the last four years, alongside across-the-board pay increases above the rate of inflation (in 2002, substantially so), the majority of nursing staff have received additional increases targeted on different parts of the grading structure, and in the last year, some staff in London and South-East England have received additional cost-of-living supplements.

The recommendations of the NHS pay review bodies offer an important indicator of potential settlements for other healthcare staff and public service employees more generally. In late January 2002, the government announced that it would accept the recommendations of the school teachers' review body report (as yet unpublished). All teachers will receive a pay increase of 3.5%, some will receive a further increase from faster progression onto the upper pay scale (after five years rather than seven), and the governing bodies of schools will have more freedom to raise head-teachers' pay as a reward for excellent performance.

It is almost certain that pay in the public services will increase faster than in the private sector in 2002, as it did in the second half of 2001. It is equally clear that this development has been driven by the near universal belief that past under-investment in public services created serious problems in the recruitment and retention of core staff, and contributed significantly to problems in the quality of service provision. Relatively favourable pay increases have been possible because current spending by central government increased by 5.2% - as planned - over the last nine months, and a similar increase is expected over the next 12 months. By the middle of 2002, the government will announce its three-year public expenditure review, setting departmental budgets up to 2005-6, and indicate whether the recent increases in current expenditure can be sustained without significant tax rises. (David Winchester, IRRU)