Regional Pay (NHS)

Jack Dromey Excerpts

Wednesday 7th November 2012 Commons Chamber

[Mr Hunt]

I agree that I want local trusts to have the freedom to get the best health care for people in their areas, including my hon. Friend’s constituents. I agree that that means recruiting and retaining the very best staff and ensuring that they are highly motivated. My hon. Friend makes an important point: we must think about areas where the cost of living is lower, but we must also think about areas where it is higher. People in my constituency who work for the NHS have to commute from Portsmouth because they cannot afford to live near the hospitals and community health centres where they work. That is why an element of flexibility is a very important principle.

[Jack Dromey (Birmingham, Erdington) (Lab)]

rose—

[Geraint Davies (Swansea West) (Lab/Co-op)]

rose—

--- Later in debate ---

[Mr Hunt]

I ask the right hon. Member for Leigh, rather than irresponsibly scaremongering, to do something positive by doing everything in his power to encourage his trade union friends to work in the best interests of their members, of patients and of his constituents and mine to come to a speedy resolution. I suspect he has rather more influence with the unions than I do in that regard. Even with a protected NHS budget—something that he thought was “irresponsible”—the NHS must do significantly more within its limited means, and as its single largest expense the pay bill cannot be immune to change. It represents between 60% and 70% of total expenditure in most NHS organisations and costs more than £43 billion in the hospital and community services sector alone.

[Jack Dromey]

I was involved in the process that led to the groundbreaking agreement “Agenda for Change”. It was a national agreement that contained certain flexibilities but it explicitly rejected regional pay. Regional pay is now proposed in the south-west. Does the Secretary of State support that move or condemn it?

[Mr Hunt]

I support proper negotiations between NHS employers and unions to revise, reform and improve “Agenda for Change” so that it is fit for the very different financial circumstances in which the NHS now finds itself. The vast majority of NHS trusts and foundation trusts, including in the south-west, would rather negotiate on national pay scales, but that means the unions being realistic about what is sensible in this financial climate. That is why employers need to use the system more efficiently and effectively, extending the use of high-cost area supplements when they can be justified to tackle the recruitment and retention issues that affect a particular area or region.

Like the previous Government, we want to retain the flexibility that allows individual employers to use recruitment and retention premiums and, like the previous Government, we want any changes to be introduced incrementally in full partnership with NHS employers and trade unions.

--- Later in debate ---

[Chris Skidmore]

I believe that “cartel” is a rather offensive word to use in this context, because it has connotations that are inappropriate for health care professionals who are doing their best to ensure that the NHS survives in the long term. That is the crux of the debate. Let us look at staffing costs. The Labour Government made a significant investment in the NHS over 13 years. It would be churlish to deny that, but it would also be churlish to deny the fact that a huge proportion of those costs were soaked up in pay.

[Jack Dromey]

The hon. Gentleman has just spoken about paying people the market rate. Sadly, there is a low-wage economy in much of the south-west. That is precisely why regional pay was rejected in the lead-up to “Agenda for Change”. It would lead to the market rate being applied in much of the south-west, driving down pay and conditions of employment. Does he, as a south-west Member of Parliament, support regional pay bargaining for the south-west?

[Chris Skidmore]

What I support is south-west trusts coming together as health care professionals and working out what is best for them in order to survive financially for the future.

I want to read from Chris Brown’s reply to my letter:

“The Consortium was established in response to the serious financial and operational challenges facing the NHS, both now and in the future, and will work to identify ways in which taxpayer funding may be more efficiently used in order to protect both employment and the continued delivery of high quality healthcare.”

There is a significant point in that. I do not want redundancies in the NHS, but if we do not come up with a workable solution for the future, that is what Opposition Members will see, and it will be on their watch if they believe that we should follow the national pay structure. I do not want to see redundancies, and neither do the trusts, which is why they have come together constructively, and they should not be scolded for doing so.

Mr Brown’s letter continued:

“More than two thirds of NHS expenditure is on staffing costs. In recent years NHS organisations have largely exhausted other avenues of potential cost-saving (including reducing reliance on bank or agency staff and implementing service improvement initiatives). Monitor, the independent regulator for NHS Foundation Trusts, has also estimated that NHS organisations with a turnover or around £200m will need to produce savings of around £9m a year for each year until at least 2016/17 to remain in financial health.”

That is why the consortium has been formed. We cannot forget the financial challenge.