Agenda for Change: NHS Pay Restraint

Lady Hermon Excerpts

Monday 30th January 2017 Westminster Hall

[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.

--- Later in debate ---

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

It is an honour to serve under you, Mr Evans.

We seem to have been in this place before. We had a lot of debate about the nursing bursary, and these things are connected, because it comes down to how we are treating people and valuing them, as has been said. In Scotland, we also have a pay cap of 1%, but one difference is that that is being paid each year, whereas for three of the last six years, nurses in England have faced a freeze—an award of 0%. What they are told is, “Well, your increment gives you a rise.” The increment is how people move through the Agenda for Change structure, so if they are not getting any cost of living rise, the increment structure of Agenda for Change is being undermined.

The Scottish Government are a real living-wage employer and are recognised and registered as such, so people earning less than £22,000 get £400 to keep them above the real living wage. Starting in the next financial year, 2018-19, those in the lower bands in England will fall below the national minimum wage; they do not come anywhere close to a proper living wage. We know the Government’s living wage as “the pretendy living wage”, because people cannot actually live on it. That term should not be used because it is confusing. The result is that at band 1 or 2, a nurse or healthcare assistant in Scotland will earn £881 more than their equivalent in England. The common band for a nurse graduate is band 5, and at the top of that band, the nurse in Scotland will earn £284 more than the nurse in England.

Scotland has had no compulsory redundancies since the crash. In England, there have been 20,000. That seems bizarre when we are short of nurses. The vacancy rate in England is 9.5%; in Scotland it is 3.5%. We get what we pay for. If we treat people badly, eventually they go away, or, if they are approaching retiral, they do not go on working; they finish, because frankly they are burnt out. Nursing is a hard, heavy and stressful job. Nurses in Scotland feel stressed because of the gap caused by vacancies, the increased demand, the ageing population and the complexity of the cases they look after, so we can only imagine what it must be like in hospitals in England, with almost 10% of places not being filled and having to be covered by agency staff, which, as we have heard, is just a circular, self-defeating argument.

[Lady Hermon]

On the hon. Lady’s point about how difficult and wearisome the work of a nurse is—it is hard work—those nurses born in the 1950s who are affected negatively by the Government’s pension policy cannot now retire until they are 65, 66 or, indeed, 67. Has there not been a double whammy for those nurses who want, for the love of the job, for the love of the patients and for the love of service of the community, to stay in post? The Government have an opportunity to recognise that contribution. If they will not do something on pensions—I hope that they will change their mind on that—they could at least remove the pay freeze.

[Dr Whitford]

The whole message that is sent by nurses, particularly those who are in their late 50s and approaching 60, is that they are burnt out; they do not feel valued. When they have to work hours and hours beyond their shifts, doing what is frankly heavy labour—coming from that background, I can vouch for its being heavy physical work—they will of course leave as soon as they can manage to do so. The problem is that that exacerbates the pressure on all their colleagues, and that is what we are seeing with the huge shortage of thousands of nursing posts across England.

We have to recognise that we will face more increased demand and more complexity as our population ages. When patients in their early 70s were coming to me with breast cancer, they had multiple morbidities. By that stage, they had had a heart attack, were type 2 diabetic, had a bit of kidney failure and were severely immobile from arthritis, obesity or one of the many other conditions that people are getting. The nurses were trying to deal with all those things. Going forward, we will face more cases of dementia and Alzheimer’s, which is a particularly challenging morbidity for patients and the staff looking after them. Working in that environment, where everyone around them is having a bad day at the same time that they are having a bad day, means that people do not enjoy going to work. If there is any chance to get out, they are going to take it.

We need to attract more nurses to deal with demand. As was mentioned earlier, approximately a third of nurses are due to retire within the next 10 years, and we need to prepare for that. Some of that relates to the expansion that we had under Labour; when there is a big expansion in a profession, a whole lot will tend to retire at the same time. Unless succession planning is ongoing and established, we will reach an absolute crisis.

That brings us to the other difference: the nursing bursary. In Scotland, we still pay a nursing bursary of more than £6,500. We also have free tuition, which is equivalent to £27,000. We have additional funding for nurse trainees with additional support needs. They tend to be older—they are around their late 20s and early 30s —so they get more than £2,000 for childcare, a dependency allowance if they have either an adult or children dependent on them and a single-parent allowance.

The Scottish Government know that we have a challenge to recruit and retain nurses to grow the nursing profession, and they are putting that money in. They are not putting it in by giving high pay awards each year, but they are the only Government that actually accepted the independent review body’s recommendation of 1% on top of any steps within Agenda for Change. What is the point in doing all the work around a review body, if the Government do not bother listening to it?

I suggest that the Government need to show nurses that they are valued. They need to look at the decision to get rid of the nursing bursary, because we already know from NHS England that there has been a decrease of 20% to 25% in applications, so it is having exactly the opposite effect than the Government talked about. We know from the Nursing & Midwifery Council that registrations from the EU have dropped by 90% since last July. That means that whole source is drying up, regardless of rules, because people do not want to take the risk of moving here. We cannot shut down every possible source for having enough nurses. A lot of this is about calling on the Government to change their attitude and realise that this is a difficult job. We need to attract people into it and we need to retain people for as long as we can. Nurses are worth every penny they are not being paid.

--- Later in debate ---

[Mr Dunne]

I will come on to agencies shortly. I am not denying that there are vacancies within the NHS, but my point is that there has been and continues to be a significant investment in increasing the number of people working in the NHS, which was not the impression that other hon. Members gave.

[Lady Hermon]

I have listened very carefully to the Minister, but I have to tell him that nursing staff, midwives and others in the nursing profession—certainly those in Northern Ireland who have contacted me—feel very demoralised by the attitude that the Government have held for several years. People in the nursing profession do a wonderful job and perform a great service for us all and for our families and friends when we have accidents or are ill, and the Government really must recognise their sense of demoralisation. If the Government will not change their policy on pay restraint—the Minister has already hinted that they will not—what steps will they take to address the serious problem of low morale in the nursing profession?

[Mr Dunne]

Obviously I cannot speak about circumstances in Northern Ireland, because we do not have responsibility for that. As I develop my remarks, I will go on to explain some of the things that we are doing to ensure that people who work in the NHS feel valued, as the hon. Lady asked, and get the kind of motivation that encourages them to get out of bed every morning and come into work day in, day out.

[Lady Hermon]

rose—

[Mr Dunne]

I will make some progress.

We recognise that the NHS faces a number of very challenging pressures: not just the ageing population, but the expectations of the public, who rightly demand quality personalised care at home or in hospital every day, not just from Monday to Friday. Those pressures will not be resolved just through pay, but by engaging with staff as they adapt and respond to new ways of working, including by introducing change that comes with scientific development and by supporting them through appropriate training and development.

We know that inflation is increasing. We continue to rely on the independent pay review bodies, which for decades have applied their expertise and objectivity in making recommendations to Government, and we have huge respect for their important work. The hon. Member for Newcastle upon Tyne North and the hon. Member for Torfaen (Nick Thomas-Symonds) referred to the NHS Pay Review Body’s 2014-15 recommendations. Last year the Government accepted its recommendations for 2016-17. We have provided our evidence to the current round—as have others, including trade unions—and we expect its recommendations in the coming weeks.

--- Later in debate ---

[Mr Dunne]

I will come to that point. If my hon. Friend will bear with me for a few minutes, I think I will be able to satisfy him on that.

[Lady Hermon]

Will the Minister give way?

[Mr Dunne]

No, I am afraid I am going to make some progress.

Hon. Members need to recognise that there is clearly a balance between pay and jobs in the NHS and across many public services. I note that the Opposition spokesman was full of recommendations about what not to do but had none, as far as I could calculate, about what should be done in relation to the delicate balance between pay and jobs. If pay were increased beyond the proposal from the NHS Pay Review Body, or beyond what the Government intend to pay, clearly there could be an impact on the number of jobs that can be afforded in the NHS within the financial envelope that we have.

--- Later in debate ---

[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.

[Lady Hermon]

Will the Minister give way?

[Mr Dunne]

No. The hon. Lady has had a fair crack. I will make a bit more progress.

I was challenged in this debate to refer to what the Government are investing in the NHS and I obviously take some relish in responding to that challenge. We are investing an additional £21.9 billion in nominal terms, which is equivalent to £10 billion in real terms, to fund the NHS’s own plan for the future. By doing so, we believe that we are playing our part, through the measures announced over the last 12 months or so, to help the NHS achieve its five year forward view. It needs to do that not only by realising benefits from the Carter review to improve productivity, but by clamping down on rip-off staffing agencies and encouraging employers to use their own staff banks for temporary staffing needs, so that they can invest in their permanent workforce. That has been referred to by a number of right hon. and hon. Members.

Agency and bank working provide an opportunity for NHS staff to engage in more flexible working to suit their own circumstances, so I would not want to characterise all agency working as bad. What is challenging is when NHS organisations need, in some cases, to go out to external agencies beyond their immediate bank and pay significantly higher rates. That is why the Department introduced, a year ago, a number of measures to start to limit the ability of agencies to charge the NHS such high fees, and we have had some success in that. In the period for which I have figures—roughly the middle of last year—the agency costs to the NHS had been reduced by 19% over the equivalent period the year before, so we are doing something about those fees. We are apprised of the problem and are bringing down the cost to the NHS of employing agency staff.

This issue is not just about pay. NHS staff, like many people, work hard to improve our public services. They have families and commitments, and they deserve to be rewarded fairly for what they do. However, as has been said, pay alone will not necessarily persuade the skilled and compassionate people that we need to choose a career in the NHS. It would be wrong to see the NHS employment package as just about headline pay. NHS terms and conditions have been developed over many years, in partnership with trade unions, and they recognise that it is a combination of pay and non-pay benefits, which need to keep pace with a modern, changing NHS, that help to recruit, retain and motivate the workforce.