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Fair pay to the NHS? - Agenda for Change five years on

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It is almost five years since the Agenda for Change pay system was introduced to unify pay across the third largest workforce in the world. Richard Staines asks the system’s architects about its successes, failures and future challenges.

When the Agenda for Change white paper was published back in 1999, pay in the NHS was in a chaotic state.

The old Whitley Council system, which applied to non-medical and non-dental staff – based on an old civil service pay framework originally drawn up in 1916 – was outdated and unfair.

Pay was often decided by job title and depended on which organisation and in which area a nurse happened to work. Staff nurses could earn as little as £12,000 per year in some places – the average annual salary is now £20,000.

In a bid to address the situation, unions began negotiations with a government that had risen to power in 1997 on the back of promises to improve public services. The landmark AfC white paper called for a unified pay system, with equal pay for work of equal value.

The new system was ambitious in its aims and complex in its mechanics.

It would require every non-medical job in the NHS to be re-evaluated and pay to be adjusted accordingly for hundreds of thousands of nurses and other health workers.

The NHS Plan, published in 2000, pledged to improve pay and conditions while negotiations on the new pay system continued between unions and the government.

 

‘It is a fair deal for NHS staff and a good deal for Britain’s NHS’

Alan Milburn

 

Final proposals for the Agenda for Change pay system were published in 2003 and 12 trusts in England and four sites in Scotland tested the new system. After a review by the NHS staff council, the RCN endorsed the system in 2004, followed by Unison, Amicus/CPHVA (now called Unite/CPHVA) and the other major health unions.

Announcing the deal, then health secretary Alan Milburn said: ‘Agenda for Change is the most radical modernisation of the NHS pay system since its foundation in 1948. It is a fair deal for NHS staff and a good deal for Britain’s NHS.’

National implementation of AfC began in December 2004. An initial three-year pay deal, worth 3.3% every year, which accompanied the new system lent weight to its promise to ensure fairer pay and a more productive workforce with improved morale.

Agenda for Change differed from its predecessor in that pay was no longer based on job title, but on work done – with the majority of NHS posts evaluated against national job profiles. For less mainstream jobs, pay was determined by matching a job against a series of competencies outlined in the job evaluation handbook accompanying the system.

The aim was to establish fairness by ensuring every nurse or staff member doing the same work received the same basic pay, wherever they worked in the country – with recruitment and retention premia added in places such as London in recognition of a higher cost of living.

The Knowledge and Skills Framework training and development system which accompanied the new pay scales, aimed to identify learning needs as staff progressed along pay scales.

Nursing Times has spoken to some of the original negotiators of the AfC pay deal – from both the unions and the government – about whether they believe it has been a success and has really improved the working lives of staff.

Andrew Foster, NHS director of workforce between 2001 and 2006, oversaw AfC’s transition from a policy proposal to a fully-fledged pay system.

Mr Foster, now chief executive of Wrightington, Wigan and Leigh NHS Foundation Trust, is proud of introducing the scheme, which he described as a monumental logistical challenge.

In particular he highlighted the role of the three-year pay deal that accompanied AfC as helping to drive a series of real-terms pay increases for NHS staff during a period of low inflation. He said: ‘AfC put more money into pay.’

Mike Jackson, Unison’s senior national officer for health who helped implement AfC, agreed. ‘In the years since AfC there has been an improvement in earnings for the overwhelming majority of staff,’ he said. ‘Many of the staff had previously been stuck on the top of their pay scale. Now there is more progression and greater flexibility in the way staff work.’

Additionally, NHS trusts in the UK are now more shielded from unforeseen costs generated by unequal pay claims – a real threat under the old Whitley system because of differing rates across the country.

‘We have defeated the equal pay challenge to the NHS, which did look far more threatening back in 1997,’ said Mr Foster. ‘Secondly we have harmonised all the terms and conditions – people forget what a mess the old system was, with things like wet wool handling allowances.’

‘We have a very much more flexible system for creating and altering jobs. Under the old system it was so difficult to create a new job, we have more flexibility,’ he added.

Mr Jackson, who oversaw much of the implementation phase for Unison, said: ‘The big achievement was to unify all NHS staff with the exception of dentists and doctors under a single pay and grading structure, that was equality proof.’

 

‘The Hartley decision has shown that AfC is equality proof’

Mike Jackson

 

The recent failure of a court case against Agenda for Change has buoyed confidence in AfC as an equal pay system.

Brought by the solicitor Stefan Cross, the case – Hartley versus Northumbria Healthcare NHS Foundation – argued that AfC was sexist as many – mainly male – technical workers had been placed on higher bands than many female staff, such as nurses.

The case, which began in November last year, failed. The judgement, passed in April this year, ruled there was no systematic discrimination in Agenda for Change. It also ruled that AfC did not perpetuate historic sexual discrimination against women.

‘The Hartley decision has shown that AfC is equality proof,’ said Mr Jackson. But he added that mistakes had been made by failing to test this at an early stage in the implementation process.

‘We did not realise we should have put equality monitoring and impact assessment in place at an early stage. We definitely should have put in place an equality impact assessment in early implementer sites,’ he said.

However, Josie Irwin, head of employment relations at the RCN, said that there were still some other areas of Agenda for Change that needed to be improved to prevent equal pay issues arising in the future.

She said: ‘We need to complete negotiations on “on call” arrangements. There may be equal pay issues. There are differences between groups of staff, with one set of arrangements for men and another for midwives who are predominantly women. That is an area that needs to be completed as soon as possible.’

The latest three-year pay deal, agreed last year, also shortened the pay scale for most band 5 nurses, to give them larger pay rises as they make their yearly progress along the pay band.

 

‘Management and unions found working in partnership was actually a good model’

Mike Jackson

 

However, Ms Irwin argues that higher bands must be shortened to allow women to progress more quickly along pay scales.

‘We want to start work on band six and seven. There are potential equal pay issues there because women who go off to have children make slower progress than men,’ said Ms Irwin.

A less obvious benefit of the AfC agreement was that it made government and unions work together for the good of frontline staff. Turning AfC from a series of bright ideas on a white paper into a working pay system required a large degree of teamwork between both parties and NHS organisations themselves.

Employers needed the expertise of unions to identify the problems in the old system and both needed the political will of the government to drive forward the reforms.

Mr Jackson said: ‘[Agenda for Change] was achieved through partnership working between employers and trade unions. Management and unions found working in partnership was actually a good model for resolving a range of issues.’

‘There was a step change in partnership working between management and staff side,’ added Mr Foster.

However, despite this new-found willingness to work together and make AfC a success, it was not all plain sailing – especially with the initial banding of staff.

 

‘All over the NHS there were mistakes made in implementing AfC’

Andrew Foster

 

As often reported in Nursing Times during the implementation process, there were problems with staff being placed on the wrong bands. Around 5% of NHS staff are estimated to have challenged their initial banding.

‘We were criticised at the time for trying to make it happen too fast. I think there is some truth about that,’ said Mr Foster.

‘We set targets that meant that there were things that were done to timetable rather than done right. ‘All over the NHS there were mistakes made in implementing AfC. That was because of the top-down performance management,’ he said.

‘On the other hand if we had not done that we might be implementing it still now. The implementation was not as smooth as we would have liked,’ he added.

These problems have now largely been rectified. Most NHS employees in England and Wales have now been fully transferred to AfC and received back-pay for the assimilation period – although progress has been slower in Scotland.

However, at one stage there were concerns that the whole national pay system could be scuppered by NHS organisations opting out under the government’s plans to give trusts greater local autonomy over decision-making. 

Three year’s ago Southend University Hospital NHS Foundation Trust in Essex used its foundation status to opt out of Agenda for Change and agreed local terms and conditions for 95% of its staff. However, the expected flood of other trusts following this route has so far not materialised.

Maintaining the integrity of AfC remains a priority. Josie Irwin is concerned that organisations may attempt to revert to local job evaluation systems.

‘I think there is work to be done to ensure that employers who continue to apply AfC correctly and work through job evaluation and don’t do weird and wonderful things,’ she said.

During Patricia Hewitt’s tenure as health secretary, Agenda for Change came under attack from trusts trying to balance their books through attempts at re-banding. Some trusts claimed many nurses were on too high a band due to errors in job evaluation, with band 6 nurses particularly targeted during this period.

Mr Foster warned that this management culture still persisted in some places – not helped perhaps by recent reports from the King’s Fund and the Commons’ public accounts committee, which have criticised the cost-benefit of the system.

 

‘I hope the government holds its nerve’

Andrew Foster

 

‘Even now people see AfC as a nuisance and a cost. Really what they need to see it is not a nuisance and a cost but an enabler to do other things. People need to hover up and look down on the whole system and look at what it has achieved rather than being concerned about the price of it,’ he said.

While the agreement has so far survived such threats and criticism, a new danger is looming large on the horizon. The economic crisis and forecasts in huge public sector budget cuts seemingly pose the biggest threat to the future of Agenda for Change.

Mr Foster said: ‘The biggest single challenge is the economic crisis. When you read newspapers there are various commentators threatening public sector pensions, public sector increases, threatening the fact that there is a national NHS pay system.

‘I personally think all those things need to be defended,’ he added. ‘It is important there is a common NHS pay system. I hope the government holds its nerve.’

  • 11 Comments

Readers' comments (11)

  • its obvious that most people spoken to for this article may have a vested interest in not saying what a disaster this system is.i dont believe that positions were graded according to jobs done or responsibilities undertaken and know of examples where nurses who bwere doing an extended role as e grades were graded less than nurses doing the equivalent job in another trust and in some areas managers were rewriting job descriptions so that jobs were graded at 5 instead of 6.as for flexibility ,as with the graded system, it has made it impossible for nurses to move easily from different areas without being financially penalised. that the same criteria can be used to grade jobs as disparate as nursing or pharmacy or clerical seems crazy and the fact that estates personnel were grading nursing posts even crazier.i wouldnt presume to know what a plumber or electricians responsibilities are.

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  • As someone who was involved in the A4C process and banding I have to say that it was generally fair and that it was done using job descriptions and person specs against a range of profiles. where it did fall down was where staff did not go through there current job descriptions with there managers and get them signed off as accurate. This was a pre requisit for the A4C process. Also some teams of staff submitted job descriptions and when the profiles were released on the internet withdrew there job descriptions and rewrote them to fit profiles.
    It didn't matter that it was a plumber or you didn't know what a certain job was about, that is what the job description should tell you. also there was the opportunity to ask questions face to face

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  • From sad experience I have to agree with Julie Miller, she understands the corruption and manipulation involved. But what planet is the previous anonymous (10.04) reader on? She or he is probably correct in saying that those involved in the process & banding did very well out of Afc, unlike skilled experienced nurses.
    I was presented with a rewritten Job Description (JD) in April 2005,which I declined to sign.I was subjected to the full force of line management intimidation (Systematic bullying & h ) when I tried to negotiate an accurate JD. I showed the RCN literature to my line manager who told me that he was not following that procedure and that he was submitting "generic JDs". As a highly skilled,degree holding specialist practitioner, with 32 years experience in Nursing & Midwifery, I was placed on Band 5, without ever signing a JD!!. So my case fell down, not as anonymous suggests because I didn't follow the procedure,but because my line manager abused his position, and decided not to follow an agreed procedure,with a view to doing some financial cleansing. My colleague who did exactly the same job was quite rightly placed on Band 6.
    So, Anonymous might research the real situation before commenting on the faifness of AfC.
    I have a further 5 years to work and my skills/experience are in high demand. However,like many of my colleagues,Im planning to leave NHS nursing and use my skills where they will be valued. Manager's heroic efforts to downgrade nurses will prove to be very false economy indeed, by increasing a skills drain that will further deplete the NHS.
    Some NHS managers do not understand this. But then, of course it is difficult to understand it, if their promotion, salary and handsome pension depends on them not understanding it. Meanwhile frontliners who have kept the NHS afloat can spend retirement with financial problems.
    Kathleen White Edinburgh

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  • I agree with Kathleen,s comments and also wish to point out that moving through gateways is a non existing process in my area which means that once you are on Band 5 you stay there despite experience and training. I am a degree level nurse and also have MSc Public Health but moving up and onwards is impossible for me as all higher level posts are taken and being kept by those in them. I also do not understand why a post (which should be the same throughout the country) can vary so much from one area to the other? A post might be AfC 7 in one area and 6 in another? for the same job description??? Why?????

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  • The above comments don't reflect that a4c system had failed them. what has failed them is their managers and their failure to follow the correct procedures. If a colleague doing the same job is banded on a certain grade then surely the other person who has an identical job description and person spec should have been banded the same.
    Gateways should be linked to appraisals and the person progress up the band. There cannot be progression from a Band 5 to a band 6 without a new job description and person spec

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  • Thanks "anonymous 2:23" for telling us what we already know. The managers in question are employed by an organization that agreed to A4C. The above comments are telling you that some managers are not doing what they SHOULD be doing. What has A4C done about ensuring that managers are implementing the system fairly, apart from turning a blind eye?
    My next step was to consult my UNISON rep. He gave the impression that he would help,but failed to do so. We both had the same line manager, so I can only assume that he had reason to be concerned for his own position as he REFUSED to take the matter further.
    In nursing, where bullying & harassment is condoned, combined with a governing body (NMC) that until recently had a proven culture of bullying,it is impossible for nurses to be fairly banded. Mr Foster is mistaken in saying "we have defeated the equal pay callenge to the NHS"
    The A4C system must be aware of this, & still left nurses in this vulnerable position. So "Anonymous 2:23", please believe me when I say that A4C has failed me. My efforts to be fairly banded adversely affected my health. It would be helpful if someone could advise what I can do to be fairly banded.
    I expect that staff in non nursing posts were banded fairly, as their workplace cultures may be different. A lot of money has gone into A4C, but not always to the appropriate source. How does A4C account for the fact that "progress is slower in Scotland", is this not a conntradiction in terms for a system of fairness?
    Kathleen White Edinburgh (Scotland)

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  • I agree with those who have experience of the disadvantages of AFC.
    My trust has also completely abused a system which, in principle should create equality for us.

    A number of us were placed on a 'discretionary point' during the transer period, apparently because my trust could not afford to pay us the significant rise to our appropriate places upon band 6 (this is the only explanation we can think of, as none was offered).

    The worst bit was that after the transfer period was over, we discovered that we would always be settled on a point that resulted in our being paid the same salary as colleagues who had qualified two years after us.

    Upon challenging the trust, we eventually discoverd that this loophole was entirely legal, although little used by other trusts, and it had been unsuccessfully fought by others.
    Consequently we are all working the same job, with the same responsibilities, in the same place, for unequal money. Something seriously unfair about it if you ask me.

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  • Well, what do the above comments say about AfC. A rhetorical fair system abused by corrupt trusts!! Did anyone expect it to be implemented fairly? I, for one did not and have been proven right. The union reps did very well out of it & hail it as fair. If unions were interested they could audit the fairness and support members in gaining equality. I was hardly ever able to contact my rep from 2005-2007. He was in London on Afc business,no doubt staying in a plush hotel, paid for by members. That's what its all about.
    Employers will find, that their abuse of experienced staff is false economy, as they are leaving in droves. Yes they will be replaced by inexperienced staff, who will tolerate it until they find better employers. Is this really the best way to run a health service?

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  • What I don't understand as a qualified Health Visitor is how I can complete a PgDip and get paid a 6 when other trusts pay a 7 after one year of qualification (due to dealing with Child Protection). What incentive is this for any qualified nurses to enter the Health Visiting profession (which is in dire need of staff). By the way we don't just weigh babies!! With all the clerical work and Lorenzo (read time n motion) we have less time than ever to see our mums and children.

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  • Anybody get appraisal?

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