Hospice Funding and the NHS Pay Award

Liz McInnes Excerpts

Wednesday 31st October 2018 Westminster Hall

[Liz McInnes (Heywood and Middleton) (Lab)]

I beg to move,

That this House has considered hospice funding and the NHS pay award.

It is a pleasure to serve under your chairmanship, Mr Davies. I welcome everyone to the debate. It is half-past nine in the morning, and the good number of people attending highlights the importance of, and interest in, this subject. I am pleased to have been able to secure the debate.

When the Government announced that they would give our hardworking national health service staff a pay award that freed them from the constraints of the 1% public sector pay cap and was definitely higher than the pay freeze that many NHS staff have endured since 2010, I—like many MPs, I am sure—was very pleased for those staff, especially as I used to be one of them. When I worked as a clinical scientist in the NHS, I saw my take-home pay reduce year on year from 2010 to 2014, at which time I was elected to this place.

My message is certainly not that our hard-working NHS staff do not deserve this pay award; they deserve it, and more. The question is how the pay award will be funded by the charitable sector that is commissioned to provide NHS services. In April this year, I was contacted by the chief executive of my local hospice, Springhill, which provides end of life care to my constituents in Heywood and Middleton and to the wider borough of Rochdale. I am pleased to see my hon. Friend the Member for Rochdale (Tony Lloyd) in his place; while the hospice serves the whole borough, it is in his constituency, and I am sure he will have a useful contribution to make.

The chief executive of my local hospice raised three issues with me. The first was whether the Government have considered the impact of the increases in NHS pay on the hospice sector.

[Chris Green (Bolton West) (Con)]

This is an incredibly important topic for debate, not least for Bolton Hospice, which is just outside my constituency. Does the hon. Lady agree that the pay increase causes problems not only in staff retention, but in the recruitment of new staff? We need very dedicated and skilled nurses to work in our hospices.

[Liz McInnes]

Of course I agree with the hon. Gentleman, and I will go on to talk about recruitment and retention and the problems that this issue is causing to our hospices in Bolton, in Rochdale and, I am sure, up and down the country.

The chief executive raised three issues with me; I have outlined the first, but the second was whether the effect of the pay increase on voluntary sector hospices had been calculated. The third point was whether voluntary hospices would be able to access additional Government funding to be able to afford the NHS pay increase.

[Thelma Walker (Colne Valley) (Lab)]

Does my hon. Friend share my concern that these changes will only reinforce existing recruitment and retention pressures, and agree that the Government should ensure that they take steps to address staffing issues as well as pay changes?

[Liz McInnes]

There is a theme developing on recruitment and retention. We have shortages of particular groups of staff, and a two-tier pay arrangement for different NHS providers will only exacerbate those problems.

[Melanie Onn (Great Grimsby) (Lab)]

The points that colleagues have made seem to reflect the situation around the country. The hospice in my constituency, St Andrew’s, provides end of life and respite care for adults and children. The chief executive spoke to me when I went to the opening of its new garden, and expressed exactly the same concerns and fears about future staffing arrangements. The hospice has an incredibly dedicated team of staff, but fears losing them if they can get better pay elsewhere in the NHS.

[Liz McInnes]

My hon. Friend highlights the problems that hospices up and down the country are experiencing with the recruitment and retention of staff. I will explore those issues further in my speech.

[John Howell (Henley) (Con)]

Maybe the hon. Lady will come on to this in her speech, but has she looked at the different effects that the pay rise has on hospices for adults and hospices for children, and whether there is effectively a two-tier system in the way that those services are delivered?

[Liz McInnes]

That is an interesting question. In terms of hospice funding, children’s palliative care tends to receive less NHS funding, so I would imagine the problem is exacerbated for children’s hospices, because they will have to find proportionally more money to fund the pay award than adult hospices. It is an important point, and I hope the Minister will be able to shed some light on those issues when she sums up at the end.

[Tony Lloyd (Rochdale) (Lab)]

As my hon. Friend says, we share a hospice. She said—I am not picking up on the phrase she used—that the hospice will need to raise more money. Raising money is the crux of this issue, because something like 70% of the funding for Springhill Hospice comes from charitable giving and less than 30% from public funds. Raising more money, unless the Government are prepared to put their hand into the taxpayer’s pocket, is nearly impossible. If the hospice cannot raise more money, the truth is that it will be a smaller service, and both those who are dying and their families will be unable to obtain this amazingly well-appreciated service.

[Liz McInnes]

My hon. Friend is absolutely right. This is the crux of the debate: a pay award has been decided on and agreed with the trade unions, but the Government do not seem able or willing to fund that pay award for non-NHS organisations.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

I am lucky enough to have the renowned St Christopher’s Hospice in my constituency, and Demelza, which provides children’s hospice care, is also nearby and serves my community. Those hospices will have to find £200,000 a year each to fund the pay rise. Does my hon. Friend agree that the pay rise must be matched by central Government funds in order for our hospices to carry on providing their excellent services to our communities?

[Liz McInnes]

St Christopher’s Hospice got in touch with me about this debate, so I have had some communication with it about the problems it is experiencing. Sadly, those problems are replicated in hospices up and down the country, and it is important that we find a pot of funding to finance the NHS pay award.

[Bill Esterson (Sefton Central) (Lab)]

Queenscourt Hospice serves my constituents and their families and carers. Like all hospices, it plays an incredibly important part in delivering NHS services, but it can only play a full part if it is fully funded. It faces a £250,000 increase in its wage bill in order to do just that. Is it not the point of this debate, which the Government have so far refused to engage with, that unless that money comes from central Government, those hospices, including Queenscourt, will not be able to continue to provide the vital services they provide now?

[Liz McInnes]

My hon. Friend makes an important point: hospices seem to be facing a choice of asking the community to give them extra money, or reducing the service they provide.

[Sir Desmond Swayne (New Forest West) (Con)]

Am I incorrect in my understanding that hospices adopting the full Agenda for Change will receive Government assistance? Perhaps the Minister will clarify that. The difficulty for hospices in adopting it is that they lose control of their salary budget. The difficulty is in getting that balance right, and I hope that the Government will be able to help.

[Liz McInnes]

The right hon. Gentleman is absolutely right. I will explore the Agenda for Change later, because adopting it presents huge difficulties for non-NHS organisations.

The three points from the chief executive of Springhill Hospice were tabled as parliamentary questions. Sadly they received identical answers that included:

“We are considering carefully the impact of any agreement on non-NHS organisations such as hospices that may be affected by the proposed pay deal; however no decisions have been made. Staff in hospices do a fantastic job in delivering world-class care and the Department remains fully committed to improving palliative and end of life care.”

In July, I wrote to the Secretary of State for Health and Social Care, asking for an update on the issue. The response stated that he “understood concerns” that

“hospices may find recruitment and retention challenging if some of their staff choose to leave in favour of organisations that employ staff on the Agenda for Change contract”.

In summary, the Government will finance the pay award for non-statutory, non-NHS organisations only for organisations employing staff on the Agenda for Change contract, which is the nationally agreed set of terms and conditions for most NHS staff. The rationale for that was that:

“Additional funding relies on organisations employing staff on the Agenda for Change contract, because it is the Agenda for Change pay and non-pay reforms that together will help deliver the productivity improvements the Chancellor asked for in return for additional pay investment”.

What are the reforms that can only be made under Agenda for Change? On examination, it seems to be an emphasis on training and apprenticeships and a programme of appraisal and personal development. There is also a slightly vague statement on the improvement of the health and wellbeing of NHS staff, to improve levels of attendance, with a reference to

“positive management of sickness absence”,

whatever that may mean.

The response from Springhill Hospice was grim. The chief executive wrote to me:

“Very few charitable hospices employ their staff on Agenda for Change contracts, and as a result, Springhill Hospice, along with many other hospices, will miss out on the funding being set aside by the Government. This will place us at a considerable disadvantage in recruiting and retaining essential staff to deliver the services that we offer to people with life-limiting illness in this community, and will leave us with a significant additional cost.

Recruiting and retaining skilled staff is a critical challenge for us, and in order to remain competitive, we will have little choice but to increase pay for clinical staff. Over the course of the three-year NHS pay deal, we estimate that this will bring an additional cost to the hospice of in excess of £250,000. Without support from the Government, this extra cost can only be met by asking our communities to give more, or by reducing the services that we provide.

We are already asking our community for in excess of £2 million contribution each and every year, and in an area of high deprivation, I can only envisage that any additional ‘ask’ will not be able to be met by our community, so sadly we may have to look at service reduction, which in turn will place additional burden on an already stretched NHS.

NHS staff will start to see the pay increase reflected in their pay packets from this month onwards. Without government support, Springhill Hospice will see a significant additional cost fall to the charity as a consequence.”

[Dr David Drew (Stroud) (Lab/Co-op)]

My hon. Friend is being very generous with her time. Does she agree that one problem, shared by Longfield Hospice in my constituency, is the opaqueness about the money that the NHS puts into the hospice movement? It does not put much in, and it is unclear why it comes and what it should be used for.

[Liz McInnes]

I certainly agree with my hon. Friend. While preparing for the debate, I tried and failed to get clarity on how NHS funding is allocated to hospice services. I hope that the Minister will provide some clarity on that.

The chief executive of Springhill said that the Department’s response was unhelpful, and that if the hospice were to utilise Agenda for Change terms and conditions in full, it would have to go through a massive consultation with staff and would need to change everyone’s terms and conditions of employment, assuming that there was buy-in through the consultation process. In addition, it would have to employ a very bureaucratic appraisal system—it already has robust appraisal processes in place—while adopting the Agenda for Change process would necessitate a massive investment in staff training, which would again add to the cost burden.

[Melanie Onn]

The chief executive of a social enterprise that provides social care in my constituency under the Care Plus Group TUPE-ed out several staff in order to continue to provide those services. Those staff are on Agenda for Change contracts, but they will not receive the Government uplift in pay, because as the chief executive says:

“The plan is to fund only NHS trusts and foundation trusts, to pay the uplift directly to them.”

The issue goes much wider in the healthcare sector than hospices. It will affect providers of health and social care in our communities, as well as those staff contracted out from the NHS, including porters, orderlies and caterers. I know that Unison is campaigning for those staff who have been privatised within the NHS. Does my hon. Friend think that all those staff are integral to providing healthcare for all of us, and should be included in the uplift?

[Liz McInnes]

My hon. Friend is absolutely right: this goes wider than hospices. It applies to non-statutory, non-NHS organisations that provide essential services to the NHS. Staff being TUPE-ed out is difficult, and I hope the Minister will consider it in her remarks. The pay award has to be funded from somewhere, and it is extremely unfair if NHS staff are TUPE-ed out to a non-NHS provider and lose out on the pay award as a result.

The chief executive of Springhill talked to me about the role of the clinical commissioning group, saying she hoped that

“the CCG will recognise this significant additional burden when agreeing our annual contract”,

and that it will

“not be expecting us to reduce our costs this next financial year.”

I know, and the interventions I have taken show, that the problems experienced by Springhill Hospice are replicated up and down the country, and I am grateful to hon. Members for sharing their experiences from their own communities.

Hospice UK estimates that, over the course of the three-year NHS pay deal, charitable hospices will face an additional bill of between £60 million and £100 million. It says that the Department of Health and Social Care’s criteria for non-NHS providers to access the additional funding set aside to support the implementation of the NHS pay award exclude the majority of the country’s charitable hospices from that essential support. The Department itself has acknowledged that most charitable hospices do not employ staff on NHS terms and conditions, as the staff working in hospices are not NHS employees. However, as hospices recruit their staff from the same local pool as the NHS, they have little option but to mirror the pay award made to NHS staff in order to recruit and retain the staff they need. As a consequence, hospices face a difficult choice: they must either ask their local communities to donate more to fund the pay award or look at options to reduce services proportionately to cover the cost. Neither is a palatable option for the hospices or for the communities that they serve.

The Department maintains that hospices should look to their clinical commissioning groups for additional support, yet research by Hospice UK shows that in recent years two thirds of hospices in England have seen their NHS funding cut or frozen—in many instances, for several consecutive years. In the absence of tariffs reflecting the costs of care, the NHS currently makes a contribution towards the costs of providing hospice care. It is on average just 30% of the costs of providing adult hospice care services and just 15% for children’s hospice services, although that funding varies widely around the country.

Hospice UK has suggested a solution to the problem, which is to follow the precedent set in 2004, when the employer contribution to the NHS pension scheme was doubled from 7% to 14%. At the time, the Labour Government acknowledged that charitable hospices would face an additional cost that they could not recover from elsewhere, so they set aside a national pot of funding to be distributed centrally to mitigate the impact. That worked very well and is a model that would work well in relation to the NHS pay increase by recognising the unintended consequences for charitable hospices while maintaining the integrity of the deal negotiated and agreed with the NHS trade unions.

Additionally, I have been contacted by my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), who tells me that he has secured an agreement for 3,000 healthcare workers in his constituency who work for a social enterprise to receive Government funding to finance the pay rise, so clearly a precedent has already been set. I would be interested to hear the Minister’s comments on that.

The pay deal that has been agreed is a pay deal for NHS staff and is welcomed. Since this debate was announced, I have also been contacted by the Chartered Society of Physiotherapy.

[Melanie Onn]

It has taken me a little while to catch up, but did my hon. Friend just say that a colleague has managed to secure an independent agreement that the pay deal will be honoured for some workers in a hospice setting? If so, how is it possible that one person can get such an agreement from Government but everyone in this Chamber who is raising issues cannot?

[Liz McInnes]

I thank my hon. Friend: that is exactly the point that I wanted to make. A deal has been done in Plymouth for a social enterprise provider that is not a hospice but a provider of mental health services. Obviously, smaller deals are being done. My hon. Friend the Member for Plymouth, Sutton and Devonport is not able to be with us today, but I was very interested in the evidence that he sent me. The Department of Health and Social Care needs to look at the smaller deals that have been done and ask itself what on earth is going on.

To return to the issue of physiotherapists, they are clinical staff whose role in hospice care is sometimes forgotten. The CSP told me that its members overwhelmingly backed the pay changes when consulted earlier this year. It pointed out to me the importance of the physiotherapist’s role in enabling people with a terminal illness to stay active as long as possible—a really important role—and went on to say that with the current shortage of physiotherapists, it is relatively easy for staff to change roles if they wish to do so, and that employers who cannot broadly match NHS pay rates will find it increasingly difficult to recruit staff.

There is clearly real concern that the NHS pay award will have an unforeseen but damaging impact on charitable hospices and other organisations that are already at a significant disadvantage compared with other non-NHS providers in not receiving reimbursement for the costs of the care that they provide to NHS patients. A sustainable hospice movement is an essential component of delivering the improvements in end of life care that the Government have rightly sought. The Government must look again at the conditions imposed on non-NHS providers and consider how funding may be made available to prevent a diminution of the end of life care service.

[Sir Desmond Swayne]

May I therefore, through the offices of the hon. Lady, put in my bid to the Minister for just such a local agreement for Naomi House and the Oakhaven Hospice in Hampshire?

[Liz McInnes]

I thank the right hon. Gentleman for that intervention, but we want a national agreement rather than a piecemeal set of local agreements. I hope that that will be addressed today.

I shall conclude by quoting NHS Employers:

“Patients are at the heart of everything the NHS does.”

How does that square with the Department of Health and Social Care’s refusal to finance the pay award for hospices, and how is that refusal putting terminally ill patients, at the time when they are most in need of care, at the heart of our NHS?

--- Later in debate ---

[Caroline Dinenage]

Sadly, I cannot comment on individual cases. I am not aware of any individual deals being done with the Government, but of course, this could be a local arrangement. For 2019-20 and the remaining two years of the deal, funding will follow the usual route. It goes through CCGs, so I imagine that the instance that the hon. Lady mentioned is due to that, but I am keen to hear more.

[Liz McInnes]

Maybe the Minister would like to take the issue up with my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), who has informed me of an agreement that has been made in Plymouth regarding a social enterprise, with the support of the trade unions. That is an interesting example that we potentially should extend to the whole country.

[Caroline Dinenage]

I can only applaud the hon. Lady’s tenacity in continuing to make that case, and we will certainly look into the matter. As I say, I have no knowledge of that individual case, but I share the desire of my right hon. Friend the Member for New Forest West to ensure that hospices such as Naomi House and Jacksplace have the funding that is necessary to do their incredible work. My mum got the whole family involved in all manner of quite humiliating fundraising exercises back in the 1990s to build Naomi House children’s hospice, and I was delighted that my role as Minister took me back to Naomi House and, indeed, Jacksplace, which caters for young adults. I went there over the summer, and Mark Smith, its director of care, was kind enough to give me a tour of the facilities. We discussed some of the issues that have been raised today, as well as others, and my team has been looking carefully at what more we can do about some of those issues.

Since I was appointed Minister for Care in January, I have met with a range of charitable stakeholders from the end of life and palliative care sector, as well as the national clinical director for end of life care, Professor Bee Wee, who is quite incredible. Having met both system representatives and representatives of charities, I have been impressed by not only their incredible passion and commitment to see Government aims for end of life care delivered, but the shared consensus on what changes are needed to drive through the improvements that we would all like to see. Hospices are an incredibly important feature of end of life care provision, but we have to see them in the wider context of our ambitions in that area. In 2016, the Government published our end of life care choice commitment, which encompasses the whole system approach to transforming end of life care, placing patients and their choices, needs and preferences at the heart of planning. The NHS gets it right when choice is meaningful, personalised, and matched by healthcare services that can respond in an effective way that places patients, families and carers at the centre of the decision-making process. I know that parts of the country are delivering excellent palliative and end of life care for both adults and children.

--- Later in debate ---

[Liz McInnes]

I thank everyone who has contributed, and I thank the Minister for her response, but I am disappointed that there was no commitment to provide funding for hospices to afford this pay award. The case has clearly been made on the disastrous effects of not funding the pay award. I had hoped that the Minister might have been able to commit to more than a report that is coming out in November.

We need to deal with the issue as a matter of urgency. I suggest the Minister looks at equivalence and whether appraisals, staff health and wellbeing and the systems that hospices already operate can be classed as equivalent to the agreement set out under Agenda for Change. That would help get over the hurdle of the productivity demands that the Chancellor has made.

Question put and agreed to.

Resolved,

That this House has considered hospice funding and the NHS pay award.