NHS: Staff Pay

Lord O'Shaughnessy Excerpts

Wednesday 21st March 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O’Shaughnessy) (Con)]

My Lords, with the leave of the House, I will repeat as a Statement the Answer to an Urgent Question given by my right honourable friend the Secretary of State for Health and Social Care in the other place. The Statement is as follows:

“Mr Speaker, the whole House will want to pay tribute to the hard work of NHS staff up and down the country during one of the most difficult winters in living memory. Today’s agreement on a new pay deal reflects public appreciation for just how much they have done and continue to do.

However, it is much more than that. The agreement that NHS trade unions have recommended to their members today is a something for something deal, which brings in profound changes in productivity in exchange for significant rises in pay. It will ensure better value for money from the £36 billion NHS pay bill, with some of the most important changes to working practices in a decade, including a commitment to working together to improve the health and well-being of NHS staff to bring sickness absence in line with the best in the public sector. We know that NHS sickness rates are around a third higher than the public sector average, and reducing sickness absence by just 1% will save around £280 million. The deal will put appraisal and personal development at the heart of pay progression, with often automatic incremental pay replaced by larger, less frequent pay increases based on the achievement of agreed professional milestones. It includes a significantly higher boost to lower paid staff in order to boost recruitment in a period when we know the NHS needs a significant increase in staffing to deal with the pressures of an ageing population.

Pay rises range from 6.5% to 29% over three years, with much higher rises targeted on those on the lowest and starting rates of pay. As part of this deal, the lowest starting salary in the NHS will increase by over £2,500, from £15,404 this year to £18,040 in 2020-21, and a newly qualified nurse will receive starting pay 12.6%—nearly £3,000—higher in 2020-21 than this year. But this deal is about retention as well as recruitment. It makes many other changes that NHS staff have been asking for—such as shared parental leave and the ability to buy and sell back annual leave—so they can better manage their work and family lives, work flexibly and balance caring commitments.

The additional funding that the Chancellor announced in the Budget to cover this deal—an estimated £4.2 billion over three years—cements this Government’s commitment to protecting services for NHS patients while also recognising the work of NHS staff up and down the country. This is only possible because of the balanced approach we are taking: investing in our public services and helping families with the cost of living while at the same time getting our debt falling. Rarely has a pay rise been so well deserved for NHS staff, who have never worked harder”.

[Baroness Thornton (Lab)]

I thank the Minister for repeating the Statement. I agree with his final statements, but never has it taken so long to get to this point of a pay increase. I do not wish to sound ungracious but the pay increase is too little, too late. The cap has meant that NHS wages have fallen by 14%. Last summer, the Prime Minister told a nurse on television that a pay rise would need a “magic money tree”; I am very glad that it seems to have been found.

The NHS is now short of 100,000 staff. In part, that must be because of this Government’s neglect of the NHS workforce. Exacerbating this situation is the chronic shortage of nursing and other staff in nursing care homes, with a 16% decrease in the number of registered nurses in the care sector since 2012. Then, there is Brexit and its damage to NHS staffing. Given that the Secretary of State now has responsibility for social care as well as health, will we see a joined-up staffing strategy for NHS and care workers? Can the Minister assure the House that, to pay for the proposed increase, the Treasury has said that it will fully match any proposed rise with new money?

[Lord O’Shaughnessy]

I thank the noble Baroness for her perhaps less than fulsome welcome for what is a fantastic deal, not least for the lowest paid staff in the NHS, some of whom will see very significant pay rises. They certainly deserve them; I do not think anyone disagrees with that. We have been able to find the additional money in the NHS budget to do this precisely because of good economic stewardship, rather than relying—as others would—on trees, magic or otherwise. That stewardship has meant that we have been able to provide the money while taking our fiscal responsibilities seriously.

The noble Baroness mentioned the joined-up staffing strategy. She is absolutely right that it is very important. I hope she knows that Health Education England has included work on the social care workforce in its draft strategy. We all understand that we need increasingly to view these workforces together—not just people such as nurses, who can work in both sectors, but carers and allied health professionals and so on. Frankly, there is more work to do on the social care workforce strategy. In the health service, we are starting from a lower base in terms of having a national picture, precisely because it is generally delivered locally. However, we are providing that strategy. I would encourage all parties who want to make sure that the strategy is joined-up to contribute their ideas, because there is a genuine willingness to make sure that we can do it.

[Baroness Jolly (LD)]

My Lords, I echo the Minister’s remarks about NHS staff working hard all year round. I welcome this agreement. The RCN and Unison must have worked very hard with the DoH to get this nailed, but the devil is in the detail and we have yet to see the detail.

Agenda for Change was implemented in 2004 when I was chair of a primary care trust. It was really difficult to get the various levels of NHS staff in the various strata. Can the Minister confirm that Agenda for Change will be revisited along with the skills and knowledge framework? The Secretary of State also talked about putting appraisal and continuous professional development at the heart of pay progression, so that may indicate that the skills and knowledge framework might need to change. On the same topic, echoing what was said just a moment ago, can the Minister shed light on whether care workers’ salaries will be included in the Green Paper on social care? At the moment, they are feeling very undervalued and underpaid.

[Lord O’Shaughnessy]

Like the noble Baroness, I think it is right to pay tribute to all the organisations involved in striking this deal. These things are never easy but it is a true partnership agreement that tries to work for everybody.

The Statement is explicit about linking pay progression with appraisals, which indeed means higher skill levels. I will write to her with the specifics of the skills and knowledge framework; I am not cognisant of that specifically, but clearly the intention is to move away from automatic progression to skill-based progression. One of the advantages of that is that it not only works for patients, but puts the onus on employers—she will see more detail of that—to make sure that there is proper professional development to help skill levels rise, so that staff can go through those gateways and progress.

[Baroness Redfern (Con)]

My Lords, in welcoming the Government’s response and the 6.5% pay rise for 1 million NHS staff, particularly in recognition of their dedication and hard work, I am pleased that the Government have recognised that the lowest full-time salaries are paid to cleaners, porters and catering staff. These groups will receive a 15% increase—£2,500—bringing their salaries up to £18,000. The fact that this is backed with new money is welcome.

[Lord O’Shaughnessy]

I thank my noble friend for making that point. It is not only about the lowest paid staff whom she has described. It is also worth dwelling on the fact that a newly qualified nurse will see a significant increase in his or her pay, which will be 12.6% higher in 2020-21. This is a package which takes account of the fact that starting salaries have been too low. We are trying to address that because it is one of the ways we can attract more people into the profession.

[Baroness Watkins of Tavistock (CB)]

My Lords, I welcome this Statement as a sign that the Government have at last recognised the effect that the pay cap has had on recruitment and retention, in particular in nursing. I hope that this pay increase will lift many nurses out of hardship and improve morale. It is a sign that the Government value NHS staff and I especially welcome the significant increase for newly qualified nurses for 2020-21. These new recruits, who commenced their training in 2017 without bursaries, will be in a far better position—comparable with other graduates in terms of starting pay—as they proceed to repay some element their salary after achieving an income of more than £25,000 a year. My only concern is that the charitable and social care sectors, which employ nurses, will need to match these salaries. How can we ensure that they will be able to do so?

--- Later in debate ---

[Lord O’Shaughnessy]

I thank the noble Baroness for her welcome for the Statement. We, along with all Members of the House, value NHS staff and this is a proper recompense after what have undoubtedly been difficult years for them. Regarding what this means for funding for charitable and social care staff—I did not address the point when the noble Baroness, Lady Jolly, asked me about it—we will obviously make sure that any staffing issues, including salaries, are part of the Green Paper discussions. They will clearly have to take into account the higher pay that is coming down the stream for these staff.

[Lord Clark of Windermere (Lab)]

My Lords, of course we welcome this, but I must say that the Minister was selling it a bit hard when he said that the Government have managed the National Health Service well when they have made cuts in training which have exacerbated the situation.

My question is a simple one. The Minister has said that the Treasury will meet all the costs. Is that an absolute assurance? I ask that because many local hospital care trusts have found that there are hidden costs. For example, the Government are pushing apprenticeships, but what they never mention is that it is the local care trust which has to pay the university thousands of pounds a year for the apprenticeship training. Will everything be covered in this pay rise?

[Lord O’Shaughnessy]

I thank the noble Lord for giving me the opportunity to provide that confirmation. In the 2017 Autumn Budget we set aside in the reserves £800 million a year, which will fund the first year of the Agenda for Change pay deal, and obviously if the members of the NHS trade unions accept the agreement, that funding will be released. The Chancellor will also provide the additional funding required to fulfil his commitment through the 2018 Autumn Budget and make available £4.2 billion over three years to fund the deal. I hope that gives the clarity the noble Lord and others seek.

[Baroness Bottomley of Nettlestone (Con)]

My Lords, the Government have every reason to be proud of providing for this very substantial pay increase. However, can my noble friend remind NHS staff that, as would be the case for any other staff, with increased pay has to come change? There are no groups of employees in any enterprise anywhere who do not have to change, restructure or change the skill mix. Appraisal and training mean doing more and achieving greater productivity. We have a heroic mission to provide care free at the point of delivery to all. This can be achieved only with a much more positive attitude towards changing the skill mix, team working, and through the many other ways of delivering cost-effective care.

[Lord O’Shaughnessy]

My noble friend is right and she speaks from great experience. I emphasise that, as the Secretary of State has said, this is a something for something deal which will deliver greater productivity in return for higher pay. That absolutely has to be the right way of doing this. I also point out that there will be an explicit focus on improving the health and well-being of NHS staff, so that they are not only happier and more likely to stay in post, but more productive as well.