Agenda for Change: NHS Pay Restraint

Catherine McKinnell Excerpts

Monday 30th January 2017 Westminster Hall

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move,

That this House has considered e-petition 168127 relating to pay restraint for Agenda for Change NHS staff.

It is a great pleasure to serve under your chairmanship, Mr Evans. At a time when the number of deeply concerning and time-consuming issues on the international political agenda is increasing, it is important that we and, most importantly, the Government do not lose focus on our domestic priorities and the challenges affecting our constituents’ day-to-day lives. The national health service is at the very top of that list, so I am pleased to introduce this debate. The way we treat our NHS staff is surely one of the most decisive factors in whether we have the functioning health service that we all need.

The petition is titled:

“Demand an end to the pay restraint imposed on agenda for change NHS staff.”

It has been signed by more than 104,000 people across the country, including 4,500 from my region, the north-east. It reads:

“Agenda for change staff including nursing, midwifery, healthcare assistants and associated healthcare professionals have suffered a pay restraint since 2010. Losing approximately 14% in real terms of their pay, staff are struggling nationwide and many have been pushed into poverty.

The impact of the pay restraint is harsh. Many are sadly leaving the professions they love. There is an NHS staff crisis. In London we lack 10,000 nurses. Yet two fifths of nurses living in the capital plan to leave as they are unable to pay their rent. Staff reporting using food banks and hardship funds is increasing. The pay restraint must end.”

The petition’s creator, Danielle Tiplady, a nurse and supporter of the Royal College of Nursing’s “Nursing Counts” campaign, said:

“Nursing staff deserve a pay award that reflects our knowledge, skill and dedication.”

She added that the interest in her petition

“is a huge achievement, but colleagues are struggling to pay bills and even turning away from the profession, and it’s time Parliament debated why.”

[Wes Streeting (Ilford North) (Lab)]

Danielle Tiplady is one of my constituents, and I am proud that she started the petition. The Royal College of Nursing’s most recent employment survey of its members found that 30% had struggled to pay gas and electricity bills, 14% had missed meals because of financial difficulties, and more than half had been compelled to work extra hours to increase their earnings. Given the demands of the type of work that nurses do, does my hon. Friend agree that our nursing profession is in a terrible place and that the Government surely must act?

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[Catherine McKinnell]

I absolutely agree. It is hard to emphasise enough my support for people working across the NHS in increasingly challenging circumstances, without whom our health service would, quite frankly, cease to exist.

[Nick Thomas-Symonds (Torfaen) (Lab)]

The way to show respect for our nurses and other NHS staff is to act now to remove the cap, as has been described, and listen to the independent pay review body.

[Catherine McKinnell]

My hon. Friend makes an important point. It is not enough for us to state our support for our NHS workers; we must show it through real action.

[Norman Lamb (North Norfolk) (LD)]

I agree with the points that the hon. Lady has made. Does she agree that, given the shortage of about 24,000 nurses, the fact that about one in three are due to retire in the next 10 years, and the challenge of Brexit, which might make recruitment more difficult, one potential consequence of pay restraint, along with the sense of injustice for nurses, is that we will face a real recruitment crisis? People will just vote with their feet and not work in the NHS. That presents us with a real challenge.

[Catherine McKinnell]

I very much share the right hon. Gentleman’s concerns. He anticipates some of the points that I would really like to get across.

My view of the importance of those who work in our NHS is shared not only by Opposition Members. The Department of Health stated in its response to the e-petition:

“Agenda for Change staff are vital. They work incredibly hard for patients and deserve to be fairly rewarded. We are committed to ensuring trusts can afford to employ the staff the NHS needs.

NHS staff are our greatest asset. Despite the pressures on the NHS driven by an increasingly aged and frail population, nurses, and all our hard working NHS staff continue to put patients first, keeping them safe whilst providing the high quality care patients and their families expect.”

How have we found ourselves in a situation in which hard-working, dedicated, exhausted nurses, midwives and other healthcare professionals are genuinely struggling to make ends meet?

[Mr John Spellar (Warley) (Lab)]

Are we not in danger of getting into a downward spiral? Staff feel stretched, undervalued and underpaid, and many are looking to move abroad, or possibly even into other professions— I have had emails to that effect. Many are also going to agencies, and we know how much money agencies make. That costs extra, especially at a time when the retail prices index is moving inexorably up as a result of currency effects.

[Catherine McKinnell]

My right hon. Friend puts his point very succinctly and absolutely correctly.

[Mr George Howarth (Knowsley) (Lab)]

I hesitate to interrupt my hon. Friend, because she is making such a good case, but does she agree, as my right hon. Friend the Member for Warley (Mr Spellar) said, that agency working, which is very expensive, is really a false economy? If nurses leave full-time employment in the NHS to work for agencies, they cost the NHS two or perhaps three times more, so there are no savings whatsoever.

[Catherine McKinnell]

My right hon. Friend is absolutely right. It is also a false economy to lose professionals, given all the money that has been invested to make them a well-trained, well-performing workforce.

As hon. Members will be aware, Agenda for Change was introduced in 2004 as a system of pay, terms and conditions, and it applies to more than 1 million directly employed clinical and non-clinical NHS staff, with the exception of doctors, dentists and some very senior managers. It was designed with the intention of delivering fair, transparent pay that is better linked to career progression, skills and competencies. Agenda for Change is based on the principle of equal pay for work of equal value. According to NHS Employers, the system allows NHS organisations to

“design jobs around the needs of patients rather than around grading definitions”

and individual NHS employers are better able to define the skills and knowledge that they want the staff in those jobs to develop.

Importantly, in relation to this debate, Agenda for Change was also designed to enable employers to address more local recruitment and retention difficulties. However, as with hundreds of thousands of people who work in the public sector, all Agenda for Change staff have been affected by the previous and current Governments’ imposition of pay restraint.

[Mr Andrew Smith (Oxford East) (Lab)]

My hon. Friend is making an excellent speech. Is it not perverse that the Conservative party seems to favour the introduction of all sorts of markets in the NHS apart from a labour market? The devolution of responsibility to trusts that it often heralds is completely inconsistent with a centralised, state-imposed pay freeze.

[Catherine McKinnell]

My right hon. Friend makes an important point. There was a two-year pay freeze from 2011-12 and a 1% increase in 2013-14 and 2014-15, followed by confirmation in the Budget of summer 2015 that the Government would fund an average public sector pay award of only 1% for the four years from 2016-17. As has been pointed out, the Government decided to reject the independent NHS Pay Review Body’s recommendation of a further 1% uplift to all pay scales from 2014-15, stating that there would be an annual increase of at least 1% for Agenda for Change staff in England through either contractual incremental pay or a non-consolidated payment.

[Mr Philip Hollobone (Kettering) (Con)]

I congratulate the hon. Lady on her excellent speech, which I am following closely. Is there not very thin moral justification for the Government rejecting the review of an independent pay body when each of us as MPs has our pay independently assessed and awarded? I can see no justification for saying to hard-working nurses in Kettering, “You can’t have the pay rise that an independent pay body said you should have” when I, as an MP, automatically get a pay rise awarded by our independent body.

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[Catherine McKinnell]

The hon. Gentleman makes an incredibly powerful point, which I hope the Minister has heard.

[Lady Hermon (North Down) (Ind)]

I congratulate the hon. Lady on leading this debate, despite the other debates going on elsewhere. I rarely find myself in agreement with the hon. Member for Kettering (Mr Hollobone), but I fully agree with him. Hundreds of nurses across Northern Ireland feel desperately demoralised by the pay freeze, which has gone on for such a long time. When we got a new Prime Minister, on 13 July last year, who talked about a fresh beginning and new opportunity, they were encouraged, as many of us were, and thought that this would be an ideal opportunity for her Government to show that they mean what they say and that they care about removing pay restraint.

[Catherine McKinnell]

I thank the hon. Lady for that intervention—I think that many of us are surprised that we agree so entirely with the hon. Member for Kettering (Mr Hollobone). She raises an important point about the concern that many people up and down the country feel about some of the Prime Minister’s early actions in her time in office.

There are real concerns that the continuation of pay restraint in the NHS threatens to undermine the very benefits that Agenda for Change was supposed to bring to employers and staff. A centrally imposed cap on pay rises limits employers’ ability to respond to recruitment and retention problems while compromising the extent to which skills and competencies acquired by staff throughout their careers can be properly recognised and rewarded.

The extended nature of the pay restraint imposed first by the coalition Government and now by the Conservative Government also throws up this question: what is the point of having an independent NHS Pay Review Body, given that the Minister is clearly content to impose a figure on NHS Employers and staff each year? Indeed, the Royal College of Midwives has warned that the policy

“undermines the integrity of the system; and will cause lasting damage to the morale and motivation of staff, worsening the staffing crisis in the NHS.”

Despite the widely promised but yet to materialise extra £350 million a week for the NHS, we all know that our health service faces real and significant challenges in financial terms, both now and in the years ahead.

[Richard Fuller (Bedford) (Con)]

I add my congratulations to the hon. Lady on securing this important debate. She has somewhat moved on to the topic of Brexit. In Bedford hospital, to fill vacancies in our nursing staff we have relied on bringing in staff from the European Union. Does she not agree that the Government have a choice: they can continue with pay restraint if they wish, but if so we must retain that ability to attract people from within the European Union and secure the rights of those already here?

[Catherine McKinnell]

The hon. Gentleman raises some important points. I would never admit to having strayed into the subject of Brexit in this important debate on the NHS, but his comments are on the record and should be noted by the Minister. As NHS Employers stated in its 2017-18 submissions to the NHS Pay Review Body:

“The NHS continues to face unprecedented financial and service challenges. The majority of trusts fell into deficit during 2015-16 and the overall shortfall has now reached over £2.5 billion… The financial settlement for the NHS up to 2020 is extremely challenging, with employers set ambitious targets to deliver efficiency savings. At the same time, demand for services continues to rise. Performance indicators show the service is under great pressure as demands for care increase and other public services reduce provision.”

[Andrew Selous (South West Bedfordshire) (Con)]

Does the hon. Lady agree that the physical demands of nursing, as a family member who worked as a healthcare assistant over the summer reflected to me, mean that sometimes conscientious nurses might be tempted to lift patients on their own, such are the demands of the job, and seriously strain their backs? That is something we should have regard to.

[Catherine McKinnell]

I very much agree. That is a factor right across the NHS and the social care sector, and it is an issue we see arising increasingly as staff come under increasing pressure, with the increased pressure to make efficiency savings, which ultimately compromises the health and safety of staff who find themselves in such situations.

Just last week the National Audit Office published its report into NHS ambulance services, which concluded, among other things, that:

“Increased funding for urgent and emergency activity has not matched rising demand, and future settlements are likely to be tougher”.

Crucially, in the context of this debate, it also concluded that:

“Ambulance trusts face resourcing challenges that are limiting their ability to meet rising demand. Most trusts are struggling to recruit the staff they need and then retain them. The reasons people cite for leaving are varied and include pay and reward, and the stressful nature of the job.”

That very much ties in with the concerns the hon. Gentleman raised.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate the hon. Lady on her speech; I agree with a number of the points she has made. On ambulance trusts and the point about very senior managers, we need good managers and senior managers in the NHS. However, ambulance trusts are a particular example—my trust, East of England, is an example—of where managers have sometimes received huge pay rises at the expense of frontline staff, who have received pay rises of nought or 1%. That is unacceptable. Does she agree that that further lowers the morale of frontline staff in a difficult period of pay restraint?

[Catherine McKinnell]

The hon. Gentleman makes an important point, which is why it is important that staff under Agenda for Change have the opportunity to have their voices heard today. When the Government look at how the NHS’s limited resources are distributed among the workforce, they need to approach the matter very much in the round.

I have no doubt that the Minister, when he responds to the debate, will be tempted to repeat the Prime Minister’s mantra that the Government are putting an additional £10 billion into the NHS by the end of this Parliament. However, as we all know, that figure has been comprehensively debunked by the hon. Member for Totnes (Dr Wollaston) and her fellow members of the Health Committee, and more recently by the chief executive of NHS England, Simon Stevens, when he appeared before that Committee. Indeed, Ministers confirmed only last week that NHS England will face a 0.6% real-terms fall in per capita funding in 2018.

How would an end to pay restraint for Agenda for Change staff help address the enormous difficulties the NHS faces? As the Royal College of Nursing has highlighted, chronic staff shortages have led to an “over-reliance” on “expensive agency staffing” to the extent that spending on agency nurses equates to about one tenth of the NHS’s total nursing pay bill. Indeed, the Royal College goes on to state that

“the over-reliance on agency staffing is a reflection of a nursing shortage and a direct consequence”

of the limit on pay for nurses working in the NHS.

We therefore have the nonsensical situation whereby nurses are leaving the NHS because of increasing workloads, stress and feeling undervalued following years of pay restraint, so the NHS has to turn to expensive agency nurses to fill the gaps left behind. Those concerns are mirrored by the Royal College of Midwives, which, following a freedom of information request, uncovered that NHS trusts in England spent almost £72.7 million on agency, overtime and bank midwives in 2015—enough to pay for 2,063 full-time experienced midwives or 3,318 full-time, newly qualified midwives.

The Minister might also refer to an increase in the number of nursing and other NHS staff since 2010. Again, that addresses neither the fact that there is currently a shortage of about 24,000 nurses in England and Wales, nor the shortage of nearly 3,500 midwives across the UK. Nor indeed does it address Health Education England’s worrying confirmation that last year some 8.8% of nurses left the NHS—the highest number since 2011. All that surely shows that the NHS is facing a perfect storm, not least in the light of the Minister’s ludicrous decision to axe bursaries for new nursing, midwifery and allied health students—I should perhaps say “Ministers’ decision”, rather than directing that comment at the Minister of State—the Government’s continued disgraceful failure to confirm the long-term future of 33,000 nurses from other EU countries working in the NHS, and the fact that one third of nurses are due to retire in the next 10 years. I look forward to hearing him explain how continued pay restraint for Agenda for Change staff will help resolve the staffing crisis.

[Dr Poulter]

The hon. Lady makes a good point about bursaries. Most nurses enter the profession in their late 20s—at about 28 or 29. We are talking about a recruitment challenge in nursing and the fact that the number of applicants for nursing courses dropped by 25% this year. Surely that demographic group needs the bursary as an enticement into nursing.

[Catherine McKinnell]

The hon. Gentleman makes another valid point. I hope that the Minister is listening, because although we are focusing specifically today on pay restraint for Agenda for Change staff, there is a much wider issue for the Government to take on board. A variety of factors is affecting recruitment and retention of NHS staff. The axing of bursaries is just one significant factor that the Government should seriously examine, and reverse.

What has the pay restraint for Agenda for Change staff meant to individual nurses, midwives, paramedics, cleaners and other healthcare professionals since 2011? Depending on the measure of inflation used, it has resulted in a drop in real-terms earnings of up to 14%. To put that in context, the trade union Unison has calculated that it is equivalent to annual pay cuts of £2,288 for a cleaner, £4,846 for a nurse, £6,134 for a midwife and £8,364 for a clinical psychologist. Indeed, ahead of the 2017-18 NHS pay review process, Unison surveyed its members working in the NHS and received the following responses, which are a matter of deep concern: nearly two thirds felt worse off than they did 12 months ago; 49% had asked for financial support from family or a friend; 13% had used a debt advice service; 11% had pawned possessions; 11% had used a payday loan company; 15% had moved to a less expensive home or remortgaged their house; and just under one fifth took on paid work in addition to their main NHS job, 64% of whom did so because their NHS salary was not enough to meet their basic living costs. More than 80% said they had considered leaving the NHS in the past year.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

My hon. Friend is making a powerful speech. Does she share the concerns of the London nurses at the lunchtime lobby today, who said that punitive London housing costs are making the situation even more acute? They feel that they are being forced out of the capital, which needs nurses, and that what is happening is almost social cleansing by the back door, pricing nurses out of our city.

[Catherine McKinnell]

Yes, I share those concerns, particularly about the significant shortage of nurses in London. The issue affects places throughout the country, but I fully appreciate the acuteness of the situation in London.

The findings that I have set out are mirrored in the most recent Royal College of Nursing employment survey of its members. It found that 30% had struggled to pay gas and electricity Bills, 14% had missed meals because of financial difficulties, 53% had been compelled to work extra hours to increase earnings, and 32% were working extra night and weekend shifts to help pay bills and meet everyday living expenses. The RCN stated:

“This corresponds with our year on year increase of 30%, over the past five years, on the number of our members seeking specialist money advice from our RCN Welfare Service. This contact from our members focuses predominantly on dealing with unmanageable consumer debt.”

It is shocking and depressing stuff. It is bad enough that the Government continually expect NHS staff, many of whom are at breaking point, to do more with less and treat more patients with fewer resources in what are usually physically and psychologically demanding roles, but to expect them to do so while they face such anxiety and stress over their own financial situation is completely unacceptable.

We do not need to take Unison or the RCN’s word for what is happening. I have received emails containing powerful testimony from NHS staff in my constituency. One explained:

“I have been qualified as a children’s staff nurse for 12 years and I reached the top of my pay scale four years ago. I have not had a pay rise since. 4-5 years ago I was in a comfortable position, I could afford the basics and if I wanted extras like holidays or treats I would just do overtime or extra shifts to afford these luxuries. However, due to the fact my pay against my cost of living has reduced by 14%, I now struggle to afford the basics and am having to do extra shifts just to be able to provide food and pay my bills… I am missing out on valuable time with my family as I have to work nearly every weekend in order to be able to get a wage that can cover our costs. It is now becoming such a stretch each month that I may have to leave nursing and find a job that pays me better... Working as a children’s nurse in a busy A&E unit is amazing and worthwhile, but it is very stressful. On a daily basis we deal with and see things that are devastating and can be difficult to switch off from. Our pay should reflect this.”

Another constituent challenged the claim made in the Government’s response to the e-petition:

“Average earnings for qualified nurses were £31,214 in the 12 months to June 2016”.

She described herself as an average nurse in her 40s with a partner and a child:

“I have been qualified and working in the NHS for 11 years. I don’t earn £31,214. The top of my band (band 5) is £28,464. So, I am paid about £14.50 an hour to clean up faeces, vomit, blood and other bodily fluids. To hold the hands of patients who are dying. To comfort the relatives of patients who are dying. To maintain complicated machinery/equipment that is keeping a person alive whilst watching the newly-qualified staff nurse who doesn’t feel confident and make sure they don’t do anything dangerous.”

Another constituent painted a very concerning picture about her financial situation. She recently qualified as a nurse—a year and four months ago. She is a single parent of three children, and commented:

“After studying hard for 3 years mixing university, placements and guided learning, I gained my degree only to find myself in more dire financial circumstances than I was as a student.

I live to a tight budget, I drive a car that is 16 years old, I don’t smoke or drink, and I rarely socialise with my friends unless it’s a special occasion. This month I was paid £1,450 after tax—from that £300 is childcare; £400 is rent; leaving £750 for the month covering gas, water, phone, food, insurance etc. I also receive £35 tax credits a week which covers my daughter’s bus fare to college and her lunch money.

I am a qualified professional and yet I would class myself as being on the breadline. I know there are others in greater need than I am; however I feel like I work hard and sacrifice my family time for nothing.”

Finally, a senior sister with 30 years’ experience in an acute trauma unit explained:

“After six years of pay restraint, I now see nurses struggling day to day to make ends meet. Those who have stayed are now planning to leave the NHS early and newly qualified nurses are unable to stay without reasonable remuneration.

I feel like I grieve every day for my profession now. We have an NHS workforce currently willing to work as hard as the service asks them, but this goodwill is now eroding faster than I have ever seen in all my years’ service.

I am retiring within a couple of years. This request comes not for me, but for those who come after me and who will be caring for me and my family in the future.”

It is clear that our NHS is facing a crisis, yet the people the Government entirely rely on to make the NHS work are being badly let down. Nobody would suggest for a minute that those working in the health service do it for the money. However, we have reached a situation in which nurses, midwives and other invaluable NHS staff are struggling to pay their bills or put food on the table, or are pawning their possessions or taking out high-interest loans just to get from one month to the next.

How can we expect people to continue to provide high-quality care to us and our loved ones in what are already increasingly challenging circumstances when they are also facing this level of stress and anxiety at home? I strongly urge the Government to look at this situation again and to take on board the concerns being raised not only by organisations such as Unison, the RCN and the RCM, but by NHS frontline staff who are saying loud and clear that this pay restraint simply cannot continue.

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[Mr Dunne]

They do, and it is important for hon. Members to understand the impact of incremental pay rises. The truth is that some half a million Agenda for Change staff are eligible for incremental pay rises each year of more than 3% on average, on top of annual pay awards. I am not saying that NHS staff should have no concerns about the level of pay award they receive; what I am saying is that since the 2008 recession, NHS earnings and public sector earnings have generally compared well with those in the wider economy.

A number of hon. Members talked about regional pay and in particular the challenges of working in London. Of course, we are very sympathetic to individuals who face the pressures of working in London—in both inner and outer London—and that is why we have the increments available to recognise the extra costs of living there.

[Catherine McKinnell]

rose—

[Dr Poulter]

rose—

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[Mr Dunne]

I will be happy to look at that; if my hon. Friend would write to me with his precise question, of course we will give him an answer.

[Catherine McKinnell]

Will the Minister give way?

[Mr Dunne]

I was about to come on to agencies, but I will give way to the hon. Lady.

[Catherine McKinnell]

I thank the Minister for giving way. I am slightly concerned by his response, in that he does not seem to be taking on board the very significant concerns that have been raised right across the board, not only by unions but, significantly, by the National Audit Office. Last week, in its report on ambulance services, the NAO said:

“Ambulance trusts face resourcing challenges that are limiting their ability to meet rising demand.”

One of the “challenges” that is specifically cited is “pay and reward”, which is hampering recruitment. It is not just the unions and NHS staff who are saying these things; it is the NAO and other bodies as well.

[Mr Dunne]

The hon. Lady refers to ambulance staff. In recent weeks—just before Christmas, in fact—the Department agreed a deal with trade unions whereby paramedics working in ambulances would have their banding increased from band 5 to band 6, phased in over two years so that they can demonstrate they have the increased skill competence required. That represent a significant increase in reward for paramedics; some 12,000 paramedics will receive a higher pay award, precisely to address recruitment challenges for that specific profession. So we are listening and we are doing something about this issue. I will try to give the hon. Lady other examples of where we are responding to specific pressures.

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[Catherine McKinnell]

I do not think that anyone could argue with what the Minister has just said about NHS staff being proud of what they do and wanting to continue. But even while this debate has been going on, I have seen several tweets. For example, one asks:

“please tell me what the RCN”

—it says the Royal College of Nursing, but I say the Government—

“is going to do. I am seriously starting to struggle now”.

Others say that they

“know so many young people who would be great nurses but lack of bursary & low pay put them off”.

Those tweets reflect NHS staff’s real live experiences of the current pay situation under Agenda for Change and the continued pay freeze.

I thank all right hon. and hon. Members who have contributed knowledgeably and passionately to this very important debate, whether in speeches or interventions. I feel very strongly that we have won the argument today. There is a high degree of cross-party consensus on many of the issues we have outlined, and the Government are either burying their head in the sand or deliberately not facing up to significant challenges regarding pay, recruitment and retention for NHS staff. As my right hon. Friend the Member for Leigh (Andy Burnham) pointed out, by failing to address the issue we are taking advantage of those who work in the NHS and are pushing their good will to the limit. What disturbs me even more is that not only their good will is being tested; their very ability to survive in the job is being tested, too. I have received a number of testimonies and seen the evidence—the Government seem to deny the figures, even though they are there in black and white and I set them out clearly in my opening speech— about the real-terms pay cuts that NHS staff are facing. They simply cannot manage, and that is a shameful situation.

I said in my speech that it is the very people the Government rely on to deliver a high-quality NHS service in extremely challenging circumstances who are being badly let down by the Government’s current policy. How have we reached a situation where nurses, midwives and other invaluable NHS staff are struggling to pay their bills and put food on the table? They are pawning their possessions and turning to payday loans. On the softer side, they are turning to agency work to top up their pay—not to afford the luxuries in life, but the basics. It is a completely unsustainable situation, and the Government must take urgent action to lift this burden off our NHS staff so that they can do their job, which is caring for us and our loved ones without the fear of financial insecurity hanging over their every working day.

Question put and agreed to.

Resolved,

That this House has considered e-petition 168127 relating to pay restraint for Agenda for Change NHS staff.