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Osborne sets out details of NHS local pay review


Chancellor George Osborne has claimed there is a “clear case” for changing the national NHS pay deal in a letter setting out eight areas to be considered in a forthcoming review.

The review is to consider how to make Agenda for Change more “market facing in local areas”, according to the letter sent to pay review body chair Jerry Cope yesterday.

The review body has been tasked with carrying out the review. Mr Osborne’s letter said it should consider:

  • The need to recruit, retain and motivate suitably able and qualified staff across the UK
  • The difference in total reward between the NHS workforce and those of similar skills working in the private sector by location – and the impact of those differences on local labour markets
  • How private sector employers determine wages for staff in different areas of the country
  • The most appropriate areas or zones by which to differentiate pay levels
  • The affordability of any proposals in light of the fiscal position; these should “not lead to any increase in paybill in the short or long-term”
  • The need to ensure that proposals are consistent with law on equal pay
  • Whether and how the new approach could be delivered within national frameworks
  • Whether proposals should apply to existing staff, or just to new entrants.

Mr Osborne announced the review in his autumn statement last week, when he also announced public sector pay would be capped at 1 per cent a year from 2013-15, following a two year freeze.

His letter says: “…as review bodies have noted in the past, there is substantial evidence that the differential between public and private sector wages varies considerably between local labour markets.

“This has the potential to hurt private sector businesses that need to compete with higher public sector wages; lead to unfair variations in public sector service quality; and reduce the number of jobs that the public sector can support for any given level of expenditure.”

The government believes there is a “clear case for seeking to correct these problems,” it says.

A “detailed remit” in relation to the NHS workforce will follow the letter, which “may also raise other pay reform issues,” it adds.

The pay review body has been asked to submit initial findings by 17 July 2012, to be fed into the government’s decision concerning the 2013-14 pay round.

Responding to the letter, Royal College of Nursing chief executive and general secretary Peter Carter said: “The national pay negotiation system works – it provides a good deal for nurses and for the tax payer. It also means that in any part of the country, employers know they can recruit staff with the right skills and experience to give patients the care that they need.

“A move which could see two nurses doing the same job but with a wide disparity in their pay could seriously short change patients in those areas which do not pay appropriately. No nurse enters the profession solely for the money, but every nurse is feeling the impact of spiralling costs of living and their choice of where to work will be influenced by affordability.  If nurses’ earnings are lower in Sunderland than they are in Surrey, patients could be badly affected.”



Readers' comments (19)

  • The affordability of any proposals in light of the fiscal position; these should “not lead to any increase in paybill in the short or long-term

    In other words we will not be getting a pay rise for a long long time, I hope all of you who voted for these clowns are happy. You obviously never lived through their last tenure, roll on the next election.

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  • Forget about thoughts about negotiation and conciliation - this is going to lead to the most serious political unrest on our lifetimes; the battle lines have been drawn and it is time for our representatives to face up to the challenge or make way for those who are actually able to represent the fee paying members,

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  • agree totally with amurray5

    anybody who voted in these clowns seem to have forgotton the thatcher years
    high unemployment, unrest, privatisation of public services....ring any bells!!!

    cameron is just a spawn of thatcher, the quicker we get these idiots out the better

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  • So the obvious implication is that 'cheaper areas' will see pay cuts since private employers often vary regional pay. Those of us in high cost areas may see the status quo - or a lesser cut.

    Clearly this is not a fair review if increases are not negotiable.

    Time for a prolonged strike. Will the last member to quit the Rcn please close the door?

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  • I live in the Plymouth area where wages are low, so would lose out big time if my pay was decided locally. It is hardly going to be fair across the health service if nurses in some parts of the country earn considerably more than their counterparts doing the same job elsewhere. How many more bloody stupid ideas is Osborne going to have for goodness sake. I despair.

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  • "It is hardly going to be fair across the health service if nurses in some parts of the country earn considerably more than their counterparts doing the same job elsewhere."

    To be fair London nurses get a big rise via London weighting, and living in Plymouth you gain massively by the low property prices and cost of living.
    The real squeeze is in areas where cost of living is high and yet there is no allowance made. That is why I feel sorry for Royal Berkshire nurses who have just had their £600 p.a. allownce cut...

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  • It sounds like another case of treating the NHS like a business. But its a non-profit making organisation so I don't understand why this is the case. How can Osbourne compare with the private sector? Does this mean that rural areas will see cuts in wages and built up areas have higher wages? Decent health care is needed in all areas of the country with equally highly skilled healthcare professionals. Therefore equal pay across the country... Or am I missing the point hear??

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  • I hope the unions are listening to this and preparing!

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  • Anyone who thinks this will increase salaries in high cost areas is fooling themselves. All this is about is cutting the wage bill by putting highly trained practitioners as close to the minimum wage as possible. That will probably be the next thing to go too.
    The Royal Berkshire situation shows that.
    Many public servants would be forced to look elsewhere, we waste so much training people to leave to other industries already. I only know of one person working clinically from a group of around 25, many having left to totally unrelated careers, many within a short time of finishing the course.

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  • Did anyone watch panarama regarding PFI's?
    this is a corrupt government who are just pushing the nhs further towards the private sector. Our unions should be uniting towards ensuring the NHS stays public and agenda for change is safeguarded or else we will be all working every hour they could possibly make us work, for absolutley nothing. I have been qualified twenty months and am already thinking about a career change. I love my job but the idiots who voted tory are now reaping in the misery they created, and so am I thanks to the majority who are easliy led:-( it is sad times for the nhs

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