Further cuts to the Agenda for Change pay framework will be sought within the next three years, Nursing Times can reveal in the wake of the Chancellor’s announcement of a further squeeze on nurse pay.
Nursing Times has been told ministers and the NHS Employers organisation will seek further alterations to Agenda for Change, following the government’s spending review last week, which unveiled £11.5bn worth of public sector cuts.
George Osborne announced annual pay rises for public sector staff, including nurses, would be held at 1% in 2015-16. This will follow a 1% pay rise this year and in 2014 following two years of a pay freeze.
Nursing Times has calculated that a band 5 nurse starting on a salary of £21,388 in 2013 can expect to receive annual pay rises totalling just under £430 by April 2015 – not including incremental pay increases.
But incremental pay “drift”, according to NHS Employers, adds around 2% a year to trusts’ pay bills, with NHS staff receiving an average 3% increase. Around a third of staff receive no rise, as they are at the top of their pay bands.
The spending review document, published after the Chancellor’s statement to MPs, stated: “Most health staff will be subject to local performance standards which will link progression pay more closely to performance, not time served, and the government will seek further reforms.”
A Department of Health spokesman confirmed to Nursing Times that this was a specific reference to Agenda for Change and the framework would be kept “under review to ensure it is fit for purpose”.
In recent months Nursing Times has reported a growing appetite among NHS trusts to seek further savings from the one million staff linked to Agenda for Change.
Earlier this month a survey of NHS HR directors revealed overwhelming support for a further reduction in pay, terms and conditions with 95% calling for more action.
Meanwhile, in April the Foundation Trust Network, which represents 200 organisations, said it would seek a dialogue with members on the next steps for Agenda for Change.
This is despite the deal done in February between NHS Employers and unions, which links pay progression to performance and axed enhanced out of hours sick pay. Many employer organisations have said the deal did not go far enough.
Josie Irwin, head of employment relations at the Royal College of Nursing, said: “We always knew that employers would want to come back for more. I have no doubt they will be back however they have to remember any change has to be negotiated and they have to justify it and put the evidence forward.”
She said there were already numerous options for employers to save money if the implemented existing flexibilities. She said: “Employers need to stop whinging about Agenda for Change and do what they are paid for.”
Earlier this month Nursing Times reported predictions by the Centre for Workforce Intelligence that the NHS was likely to see a shortage of around 47,500 nurses by 2016.
Ms Irwin warned that continued pay restraint would impact on recruitment. She said: “There isn’t a linear relationship but it’s the whole context of pay plus the constant bashing by the government, the media and repeated service change. It is bound to have an impact on recruitment.”
But Anita Charlesworth, chief economist at the Nuffield Trust think tank, claimed nurses and NHS staff had enjoyed a better pay reward than the private sector since 2008 and, as a result, it was unlikely recruitment to the NHS would be a problem in the short term.
However, she was less sure about the long term, saying: “Pay up to 2015-16 should not result in significant recruitment and retention problems, but then there is a real question about after that and how sustainable that becomes.
“It will be difficult to hold down NHS pay relative to the private sector beyond 2015-16. That is a pressure coming down the road,” she added.
Ms Charlesworth said the emphasis on pay restraint was a “short-term fix” and the NHS needed to look at incremental pay, terms and conditions.
She added: “The pace of change needs to increase in the NHS, with a greater focus on longer term transformation. Without such a shift we are storing up financial risk and NHS managers will find it harder and harder to match rising demand to a stagnant budget.”
Gill Bellord, director of employment relations and reward at NHS Employers, said: “We will continue to talk in partnership about refreshing Agenda for Change, which itself contains provision for review. We anticipate that further changes will be needed between now and 2016.
“At the moment we are talking to employers about how they are implementing the recently agreed changes. These changes will help AfC to provide best value for patients.”
NHS Employers chief executive Dean Royles added: “Our biggest priorities must be maintaining and improving quality patient care and staff job security, both of which depend on sustainable pay bills and a focus on performance.”
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