Agenda for Change: NHS Pay Restraint Debate
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Philip Dunne
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Agenda for Change: NHS Pay Restraint
Philip Dunne Excerpts(7 years, 10 months ago)
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The Minister of State, Department of Health (Mr Philip Dunne)
Mr Evans, I am grateful to you for calling me to wind up the debate. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on taking up the petition and giving a well-constructed speech, with which many people listening to the debate—not just Members from her party, but those outside—will feel considerable sympathy. I express similar sentiments towards the hon. Member for Ellesmere Port and Neston (Justin Madders). Although I do not agree with his prescription, I thought that he conducted himself in a thoroughly considered way, as usual. It is a pleasure to be shadowed by him, as well as by the hon. Member for Central Ayrshire (Dr Whitford), who as usual made a constructive contribution.
[Sir Roger Gale in the Chair]
First, I should say that we are all rightly proud of our national health service and the staff who work incredibly hard day and night for the benefit of patients. They undoubtedly deserve a cost of living increase, but we must recognise that the financial and quality challenge facing the NHS is unprecedented. These are not normal times. I deny the allegation that Agenda for Change staff are undervalued, as the right hon. Member for Leigh (Andy Burnham) indicated in his speech, which was knowledgeable, given his previous role as Health Secretary. Staff at all levels in the NHS do a fantastic job, and it is vital that we in Government and the leaders of the NHS recognise that staff morale is important to maintaining staff commitment to services.
In my experience of making visits across the NHS, hard-working staff put patients first every single day of the week. They do so because caring for sick and vulnerable people is as much a vocation for them as it is a job. I know that pay restraint is challenging, but when I speak to staff, they tell me that they want to know that the right number of staff will be working alongside them in the hospital or community setting. The Government have listened. Contrary to some of the contributions made by hon. Members, staff numbers have increased significantly across most grades since May 2010. We have recruited almost 11,800 more doctors. More than 13,300 more nurses are working on our wards today than in May 2010—the overall number of nurses working for the NHS is at an all-time high. There are over 2,100 more midwives, and more than 6,300 currently in training, as well as over 1,500 more health visitors and over 2,400 more paramedics.
The allegation that people are leaving the NHS in droves is simply not borne out by the facts. The most recent workforce statistics were published last week, covering the period ending October 2016, and they showed that a record number of full-time equivalents were working in our NHS.
Dr Huq
The Minister is giving figures for the current workforce, but does he have any for the future workforce? I mentioned my constituent, Dr Linda Burke, of nursing and education studies at the University of Greenwich. She is worried that due to the cut in nursing bursaries, the number of applications is falling, possibly by as much as 30%. The RCN itself has said:
“We have consistently raised concerns to the Government… Despite 100 years of nursing knowledge and expertise, our advice fell on deaf ears.”
The RCN is effectively saying, “We told you so.” Will he remark on that?
Mr Dunne
I can say to the hon. Lady that there are 51,000 nurses in training today—I cannot tell her whether that is a record number, but it is a very significant number. There are 1,600 paramedics in training, which I believe is a record number. She and one or two other hon. Members have given anecdotes today about applications for new courses starting in the autumn, but I cannot tell her what the figures will be, because I have not yet seen any numbers published by UCAS. I think that they are due in the coming days, so we will have to see.
Dr Whitford
Honourable but not right—I accept that. The figures from NHS England itself suggest a drop in nursing applications of at least 20% to 25%.
Mr Dunne
The hon. Lady must have access to figures that my Department and I do not have. My information is that we have yet to receive any formal numbers from UCAS; there may be some early indications, but they do not represent the actual numbers. We will just have to wait for them. There is no point in speculating any further.
A number of hon. Members mentioned the potential impact of Brexit on EU staff, who currently represent a significant number of the professionals working in the NHS. Some 43,000 non-UK-born nationals work in the NHS—about 15% of the workforce—and about half of them come from the EU. It is very important that none of those staff are unnecessarily concerned about their future. The Prime Minister has sought to make it clear on several occasions that she wants to protect the status of EU nationals who are already living here and that the only circumstances in which that would not be possible would be those in which the rights of British citizens living in EU member states were not protected in return. We wish to provide as much reassurance as we can, both to NHS workers and to their employers, that they have a constructive future here in the UK.
However, it is important that we move towards a self-sustaining workforce. Frankly, that is at the heart of the reason behind the change in funding for nursing places, which is to bring nurses in line with doctors and those doing other degrees in England, so that from this autumn onwards they receive funding through student loans rather than bursaries.
Dr Poulter
The Minister is right to highlight the increases in many staff numbers across the NHS. He will also be aware that because of the increased focus on quality of care, many trusts have had to acknowledge that they did not have enough staff in the first place. If there are enough staff working in the NHS at the moment, why is the locum bill about £3 billion a year?
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.
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.
Mr Dunne
I will first answer, if I may, some of the comments made about the NHS Pay Review Body’s recommendations and how they sit alongside other elements of the NHS.
The allegation was made that there have been significant pay rises across NHS boardrooms, which are demoralising for those who have suffered pay restraint. However, I say to the hon. Members who raised that point that in 2016 the median rise across all board positions in NHS trusts was 0%. There are individual examples, when very senior managers are introduced to trusts that are going through a management change or are in difficulty, where higher pay rates may have to be introduced than for the previous incumbent, but generally speaking the opposite is happening: in many cases, those coming into new positions are coming in on slightly lower salaries.
Justin Madders
The Minister talks about respecting the independent NHS Pay Review Body’s recommendations. Without having seen them, can he say whether the Government are likely to respect those recommendations?
Mr Dunne
The hon. Gentleman will not be surprised to hear that I cannot give him any reassurances on that. We will have to see what the recommendations are and then take a view. However, we are not very far away from that point now.
The hon. Member for Foyle (Mark Durkan) referred to the national living wage. I got the impression from him that some NHS staff members in Northern Ireland are earning only the national living wage; I can reassure him that no NHS staff in England are earning only at that level.
Dr Whitford
Looking at the graph going forward, however, those on bands 1 and 2 of Agenda for Change will fall not only below the real living wage, which they are already below, but below the national living wage, which is the minimum wage, in the coming years—2018-19 and 2019-20.
Mr Dunne
Once again, the hon. Lady is speculating about what might happen in future, and I am afraid that not only can I not comment on that, but I am not sure whether she is correct or not. There are some assumptions in what she said about what will happen to the national living wage. The Government are making some assumptions, but what the Government choose to do about the matter we will have to see. At present, the policy is certainly that nobody will be paid less than the national living wage. I can reassure her about that.
Mark Durkan
Just to clarify, like the hon. Member for Central Ayrshire (Dr Whitford), I was referring to the living wage and not to the national living wage, which is a figment of Government policy.
Sir Roger Gale (in the Chair)
Order. You cannot take one intervention following another intervention. I call the Minister to speak.
Dr Whitford
I was basing my assumptions and suppositions on what the Government themselves announced when they said that the pay freeze would continue in the next four years. That was announced in the comprehensive spending review, so I am not just making it up, and if pay goes on the trajectory that was announced last year, it will fall below the national living wage, which is obviously due to rise towards 2020.
Mr Dunne
I have made the Government’s current position clear and we will have to see what emerges from the NHS Pay Review Body’s recommendations, and then how those are implemented over the coming years. I think it is fruitless to speculate on what might happen in future years, based on the suppositions that the hon. Lady made—
Dr Poulter
On the current position, can my hon. Friend clarify what the average annual increase in pay in real terms is for NHS staff who have been at the top of the Agenda for Change pay scale since 2010?
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.
Justin Madders
We are very clear that we believe that the recommendations of the independent NHS Pay Review Body should be accepted. Much of what I said was about how we should recognise that, given the pressures on nurses’ pay, that will not necessarily cost the Exchequer anything in the long run.
Mr Dunne
I am not sure that that provides much clarification, but I thank the hon. Gentleman for having a go.
Employers in the NHS know that they need to deliver greater efficiencies and improved productivity to help protect frontline jobs. Making the workforce more expensive, through higher pay rises, will not help.
It is therefore disappointing that trade unions have alleged that staff have suffered a pay cut of about 14% in real terms—an allegation that has been repeated by a number of hon. Members in the debate. The truth is that the Government have ensured that no NHS employee —indeed, no employee—should be paid below the national living wage. As I have said, no NHS employee employed under the Agenda for Change pay system is paid below that.
The truth is that average earnings of NHS staff as a whole remained well above the national average salary for 2015, which was £27,500, and have increased by more than annual pay awards. For most NHS staff groups, half of employees employed in 2010 and still in employment in 2015 benefited from double-figure increases in earnings, equating to between 2.2% and 2.9% annually, depending on staff group. The average annual consumer prices index figure over the same period was 2.4%.
Dr Poulter
I specifically asked about those who are at the top of the Agenda for Change pay scale, which many Agenda for Change staff are. Can the Minister confirm what the figures are for that group, because I think that the figures he has given include those in receipt of incremental rises?
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.
Mr Dunne
I will make a little progress, if I may.
NHS organisations spend about two thirds of their entire expenditure on pay. Ensuring that the NHS has the staff it needs relies, crucially, on controlling pay and on making every penny count for the benefit of patients.
I give way to my hon. Friend.
Dr Poulter
My hon. Friend the Minister may not have the answer to my specific question here today, but will he write to me after the debate to confirm the answer to my question about those members of staff who are at the top of the Agenda for Change pay scale? What, in real terms, has been their pay increase since 2010?
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.
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.
Dr Whitford
Certainly the nurses I met during the lobby here, who had come from all over England, but particularly from London, described literally struggling and facing great financial hardship. That is very difficult for them. They work so hard for the benefit of all of us, yet feel that they cannot go on in their profession because they simply cannot keep their families here in London.
Mr Dunne
I have already explained to the hon. Lady that we have a London weighting, which reflects the increased costs of living in London. I have also explained to her that average pay for nurses is significantly above the national average pay. She herself referred to average nursing pay of some £31,000—
Mr Dunne
If not her, then another hon. Member referred to it, and that is from the latest available workforce statistics.
Picking up on the hon. Lady’s point, it is important that NHS staff are confident that their employment package is competitive. We want employers to make better use of the full package in their recruitment and retention strategies. NHS Agenda for Change staff have access to an excellent pension scheme, far in excess of arrangements in the wider economy, which includes life assurance worth twice the annual salary, and spouse, partner and child benefits. They have annual leave of up to 33 days—six and a half weeks—plus the eight bank holidays, which is far better than that which is available in the private sector, and in many other elements of the public sector. They have sickness and maternity arrangements that go well beyond the statutory minimum and, as I have touched on, there are flexible working, training and development opportunities for staff at all grades. For too long, the NHS employment package has been a well-kept secret and we want leaders to make the very best use of the overall NHS employment offer to help recruit and retain the staff they need.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
The Minister has outlined the pay and conditions package—or part of it. Does he believe that staff within the nursing profession are confident at the moment about their pay and conditions package, or does he feel, as I hear, that they are undervalued within the system?
Mr Dunne
I have tried to indicate in my remarks that we do not undervalue anyone who works in the NHS. The role of our nurses in particular provides the backbone of the entire health service. Understandably, people are concerned about their level of pay. With several years of pay restraint, that is no surprise—it is the case right across the economy—and that is why we will look carefully at the recommendations of the NHS Pay Review Body. I have already said that we recognise that there should be some increase in the award to take into account the cost of living.
You will be pleased to hear, Sir Roger, that I am going to conclude my remarks, by reconfirming that as a nation we are extremely proud of our NHS. The patient surveys we undertake every year tell us that our patients are proud of our NHS. Our staff tell us, in the surveys we undertake of them, that they are proud of working in our NHS. This is not just me saying this, reading it from a sheet; it is what staff tell me whenever I visit an NHS facility. They are proud of their job. They are proud of looking after their patients, and they want to continue to do so.
The Government have to take tough decisions, and in this area we have done so to protect jobs through pay restraint. Average NHS earnings for most staff groups have continued to grow. We are committed to ensuring that they have the right number of colleagues working alongside them in hospitals and in the community.
I strongly believe that the issue of recruitment and retention is not just about pay. It is about creating a culture in which learning, development and innovation are encouraged. It is about creating an environment where staff want to work, take pride in what they do, and are well motivated and feel safe; an environment where employers promote the importance of the values of the NHS and work incredibly hard to keep staff safe, and where bullying and harassment are not tolerated.