NHS Pay Review Body/Senior Salaries Review Body
(Limited Text - Ministerial Extracts only)
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The Secretary of State for Health (Mr Jeremy Hunt)
I am responding on behalf of my right hon. Friend the Prime Minister to the reports of the NHS Pay Review Body (NHS PRB) and the Senior Salaries Review Body (SSRB) on market facing pay for their respective remit groups, which have been laid before Parliament (CM 8501 and Cm 8507). I am grateful to the chairs and members of the review bodies for producing these reports.
The Chancellor of the Exchequer on 7 December 2011 and I on 23 December 2011 asked the NHS PRB to consider how to make pay more market facing in local areas for NHS Agenda for Change (AfC) staff. The remit was for England only.
The NHS PRB found that the AfC pay system already has more extensive market facing features than in many other pay systems in large, national employers, in both the public and private sectors, to respond effectively to local labour markets. Additional freedoms are also available to foundation trusts introduced in legislation by the previous Government.
The NHS PRB found that there was not the firm evidence which would be essential to justify further top-down investment in additional market-facing pay in the NHS at this time. They do not recommend the introduction of centrally designed pay zones this year. Instead, the NHS PRB recommended a fundamental review of high-cost area supplements (HCAS), appropriate use of local recruitment and retention premia and regular review of AfC, including its flexibilities, with any negotiations brought to a conclusion at a reasonable pace. The NHS PRB agreed that should any market-facing approaches emerge from these developments they should be introduced incrementally to take account of affordability.
The Government welcome and accept all of the recommendations of the NHS PRB, including a review of HCAS and will take this work forward in partnership with NHS trade unions and the NHS Employers organisation. The priority is to continue to develop the AfC system and ensure that national terms and conditions are fit for purpose and support the recruitment and retention of good quality staff in the most cost-effective and efficient way.
The Chancellor and I wrote in similar terms to the chair of the SSRB. However, the Department of Health’s evidence noted that from 1 April 2013, the only NHS staff within the remit of the SSRB will be those relatively few very senior managers (VSMs) employed by the Department’s special health authorities and executive non-departmental public bodies, together with a small number in ambulance trusts that have not yet become foundation trusts. All other NHS organisations are free to determine their own pay and terms and conditions for their VSMs.
The SSRB recommended that no additional locality pay measures be added to the new VSMs’ national pay framework as the evidence pointed clearly to the market for VSMs being national rather than local. They observed that the new pay framework already has some flexibility, with safeguards, which should enable the NHS to recruit and retain sufficient numbers of suitable VSMs.
The SSRB also recommended that all NHS VSMs should be assimilated into and paid according to the new pay framework, on the basis of job weight, once the current NHS reforms have been fully implemented. Our view is that, to avoid increasing pay and costs unnecessarily, the new framework should apply to all new appointments. Existing VSMs should normally remain on their existing terms and conditions unless adjustments are required to comply with equal pay legislation.
The Government welcome and accept the recommendations of the SSRB, apart from the recommendation to assimilate all VSMs on to the new pay framework.