Regional Pay (NHS): 7th November 2012

Mr Ben Bradshaw (Exeter) (Lab)
I am pleased to see some of my west country colleagues here and to see the Minister in her place.

In May, the BBC asked the Deputy Prime Minister about regional pay, and he could not have been clearer:

“There is going to be no regional pay system. That is not going to happen.”

Yet, as we speak, plans are under way at 20 of our biggest hospitals and mental health trusts in south-west England to introduce just such a regional pay system. The organisations involved include the main hospitals in Exeter, Plymouth, Truro, Taunton, Yeovil, Poole, Bath, Bournemouth, Bristol, Gloucester and Salisbury. In total, more than 88,000 NHS staff in the south-west are affected.

Early this summer, the trusts announced their intention to form a pay cartel and to move away from the national pay negotiating process known as Agenda for Change. They committed £10,000 each to spend on business consultants to help them draw up their plans; they employed lawyers; and they set up a website. Based on the initial proposals, the trade unions, royal colleges and other organisations representing staff estimate that nurses and other NHS staff in the south-west could face a 15% pay cut, as well as changes to their holiday and other entitlements. The cartel has threatened to sack and re-employ staff to force through its plans.

I have to tell the Minister that, in my more than 17 years in this place, I have never received as many letters and e-mails expressing such anger and dismay as I have on this issue. Here is a taste of just some of them. A senior nurse in Exeter wrote to me, saying:

“My staff are at breaking point. I predict a mass exodus and patients will not receive safe high quality care.”

Another constituent wrote:

“Myself and my care workers are sick with worry over this and how I will be able to look after my family.”

Another wrote:

“I am the sole provider for a family of six and do two other jobs on top to cope. This will be the final straw.”

The Parliamentary Under-Secretary of State for Health (Anna Soubry)
I thank the right hon. Gentleman for giving way so early in his speech. Will he undertake to share all those e-mails and letters with me so that I, too, can write to all his constituents to assure them of the Government’s plans?

The Parliamentary Under-Secretary of State for Health (Anna Soubry)
It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate the right hon. Member for Exeter (Mr Bradshaw) on securing the debate, although it does not seem to have been much of a debate, in the sense that no one else made a speech, although I am grateful for the interventions. I noted with great care—which is why I intervened on the right hon. Gentleman—his claim that he has had more e-mails and letters on the topic than on any other topic in his 17 years in this place. That is an astonishing achievement.

Mr Bradshaw
The Minister is quoting me inaccurately.

Anna Soubry
I am so sorry.

Mr Bradshaw
I said I have never received so many e-mails of such strength of feeling, individually written, that were not part of a campaign such as on hunting, but were from individual, hard-working staff in the NHS writing to me about their experiences and their anger. The Minister should take note of that.

Anna Soubry
I am extremely grateful for that clarification and I take note. My offer remains: if the right hon. Gentleman would be so good as to contact all those people who wrote to him and seek their permission—in ​my experience hon. Members often do not need to seek such permission from someone who has contacted them, but simply pass messages on to the Minister—I will happily reply to every one of them, explaining the Government’s view on the matter. I very much hope that the right hon. Gentleman, too, will share my comments today with all the people who have contacted him.

First, I pay tribute to everyone who works in the national health service, for their continuing hard work and dedication to the NHS. The Government have made it clear that they support the continued option of national terms and conditions in the NHS. We expect most employers will want to continue to use them, provided that the terms remain fit for purpose and affordable. However, every pay system needs to be kept under regular review, to ensure that it remains sustainable. The responsibility for that, in respect of the Agenda for Change pay system, rests with the NHS Staff Council, a partnership of NHS employers and trade unions. The council has been considering the possibility of changes to the national terms of the Agenda for Change for about two years. Indeed, I understand that the right hon. Member for Leigh (Andy Burnham) asked them to explore the possibility of more

“flexibility, mobility and sustained pay restraint”

as long ago as 2009, when he launched “From good to great”, but there was no change then, and we are still waiting for any change

The trade unions tell us that we should stop the south-west consortium—and the right hon. Member for Exeter makes the same point—until we can see whether a national deal is achievable. However, experience suggests that that would be a battle of hope over experience. Negotiations in the current economic climate are not easy and they are not helped when some smaller unions have already declared that they will not support any change. They prefer to stick their head in the sand and put NHS organisations and their members’ job security at risk, rather than engaging in any meaningful way. There is no point believing that the Government can wave a magic wand and make the financial pressures disappear.
 
Kerry McCarthy
When did the Department of Health first find out about the formation of the consortium? When I have written to Ministers in the past, all that I have been told by way of response was factual information about when the document was leaked to the press. They have refused to answer that question about whether they were involved in setting up the consortium, or encouraging people to set it up before it was formed.

Anna Soubry
I believe we were not, but I will make further inquiries of my officials, and we will write to the hon. Lady and give her assurances about that. If I am in any way wrong I know that I will be corrected, and will be happy to say so.

It is my understanding that several options have been put forward. No decisions have been made, but every effort is being made to engage with the staff to reach an agreement. I just wish that all the trade unions that represent so many people in the south-west consortium would engage in that process. It is my firm view that that is the absolute duty and aim of all responsible trade unions.

Andrew George
It is my understanding that the cartel is not entirely engaging with the unions in the way that the unions believe it should. What powers do the Government have to intervene in the activities of the cartel, within the powers and guidance that were conveyed to them by the previous Government in the regulations?

Anna Soubry
I hope to answer those points in my speech, in the time available to me. If I do not, I will of course write to the hon. Gentleman and answer those questions in full.

I want to talk about the financial situation in the national health service. We have already guaranteed the NHS preferential funding for the current spending review, ensuring real-terms growth every year and additional cash of more than £12 billion per annum by 2014, going into 2015. We are driving up £20 billion of quality, innovation, productivity and prevention savings, stripping out bureaucracy, cutting management costs by up to one third and shifting resources to front-line services. To be blunt, we cannot spend more on public expenditure without putting our national financial reputation at risk. We must demonstrate that we have the commitment to ensure that our economy is sustainable.

The south-west consortium faces a stern choice. It can either continue to ignore the problem, and hope that it will go away, or it can face the challenge, share it with its staff and their representatives, and work in partnership to achieve the best outcome for everyone concerned, especially patients. I used to be a shop steward and a member of the National Union of Journalists. I understand and value the role of good partnership working with staff and trade unions. I believe that the south-west consortium is taking a mature approach. It published two discussion documents in August, setting out the scale of the financial and service challenge that it faces. It has not made any decisions. It has produced a paper, setting out a wide range of options for changes to terms and conditions, and how they might help. It has included options affecting all staff, including doctors, so that every opportunity is considered, no stone is left unturned, and there are no sacred cows. I believe that that is a responsible approach.

The consortium reaffirmed its commitment to national terms and conditions and agreed not to put any proposal to its boards until December, allowing reasonable time for the conclusion of national negotiations on a possible agreement to make Agenda for Change changes sustainable. I believe that that, too, is responsible.

Mr Bradshaw
The Minister sounds, from what she is saying, and what she said a little earlier, as if she supports the south-west cartel, which is an interesting development in Government policy; but she also says that she wants progress at the national talks. How does she think that having a parallel negotiation going on in one region will help her to get agreement at national level?

Anna Soubry
I absolutely support anyone who takes a mature and sensible approach to the matters. I also understand why the south-west consortium—like many others, no doubt—is frustrated, because a two-year set of negotiations continues when it should have reached an agreement. The trade unions must take a responsible approach to ensuring that we have a national health ​service that is sustainable. It is in the interests of their members, and they are meant to represent their members, whose interests they should put first.

The consortium has published two discussion documents. What is our attitude and what are we to do as a Government? To be clear, we support national terms and conditions of service, but not at any cost. Individual employers must have the right to exercise the freedom, which the Labour Government gave foundation trusts in 2003, to be free of ministerial control. That is what the previous Government did.

Mr Robert Buckland (South Swindon) (Con)
Having been contacted by many concerned constituents about the matter, I took the trouble to meet my local NHS trust chief executive to discuss those concerns and put them directly to her. Will the Minister assure me that the worrying spectre of a monolithic regional pay structure that would ill-suit employees in Cornwall as much as in Wiltshire will not be welcomed by the Government?

Anna Soubry
I agree with my hon. Friend. Monolithic structures would not be welcome. What is welcome is when trusts take a responsible view to ensure that they act in the best interests of their employees and that they have a financially sustainable system. That is in the interests of everyone—staff and patients.

Andrew George
Following my intervention on the right hon. Member for Exeter, he responded that the only flexibility is to exceed existing pay and conditions, not to go below them. Is that also the Minister’s understanding?

Anna Soubry
My understanding is that foundation trusts—the hospitals—have powers and a great deal of autonomy. That was the system set up and backed throughout by the previous Government, and it continues today. NHS employers are better placed to decide how best to reward and motivate their staff for the benefit of patients. They are better placed to assess whether national terms are fit for purpose or sustainable in the light of local competition, and to assess the options and risks of any recruitment or retention problems that might follow from introducing local pay. Such decisions should not be, in my view, made by Ministers.

Some Members have expressed concern that it is not fair to pay different rates for the same job in different areas, as it could undermine recruitment or morale. I understand and appreciate the arguments advanced by many people and the concerns raised by those on both sides of the House. However, if that was the case, one might have thought that the Labour Government should not have included high-cost area supplements or recruitment and retention premiums when they introduced Agenda for Change in 2004, and that they should not have abolished the right of the Secretary of State to direct foundation trusts in 2003. The Labour party gave those powers to employers, and I make it quite clear that they were right to do so. We now have to trust employers to exercise their judgment wisely and to use the skills and expertise of their non-executive directors to consider what is in the best interests of their patients. We have to recognise that they know what rates of pay are fair and necessary in their local communities.​

The Opposition need to allow the system that they created to work, without the political interference and micro-management that typified their term in office. If they want to do something useful, they should encourage the trade unions—those that fund many of their Members of Parliament—to ensure a swift and successful conclusion to national negotiations. That will secure the Agenda for Change as a sustainable option for employers and staff alike. Above all, it will put patients first and foremost.