NHS employees can expect a prolonged wage squeeze and a possible end to national NHS terms and conditions, the government has signalled.
Chancellor George Osborne has announced in his autumn statement that public sector wage rises will be capped at an average of 1% for two years from April 2013.
Pay in the NHS for all those earning over £21,000 has already been frozen this year and is set to be frozen again in 2012-13, excluding incremental rises which average 2.5% or more in most trusts.
Mr Osborne also said he will ask the independent pay review bodies that advise ministers to “consider how public sector pay can be made more responsive to local labour markets”.
The outcome of the review is expected by July 2012 and could potentially lead to the national pay framework Agenda for Change being ripped up. However, until the PRB review’s terms of references are published this remains unclear.
The July 2010 white paper Equity and Excellence: Liberating the NHS said pay decisions “should be led by healthcare employers rather than imposed by the government”.
But it added: “It is likely that many providers will want to continue to use national contracts as a basis for their local terms and conditions.”
Sources to whom Nursing Times spoke immediately after the statement thought it was likely that the review could lead to elements of Agenda for Change being negotiated locally. This could include nationally set benefits such as annual leave entitlements, sick pay and overtime, which many trusts feel are too generous.
NHS Employers director Dean Royles said in his speech to the organisation’s annual conference earlier this month that Agenda for Change had been a “great achievement” but “circumstances had changed” and there was a need for local and national talks.
Royal College of Nursing head of employment relations Josie Irwin said: “We need some clarity in what [the government is] saying.
“We’ve always been keen to point out that when the NHS is experimenting with local bargaining it takes the main focus away from the health of its patients.”
RCN chief executive and general secretary Peter Carter described the 1% pay cap as a “deeply provocative and insensitive announcement”, which puts industrial relations in “serious jeopardy”.
He said: “Nurses and healthcare assistants now effectively face another two years of pay cuts at a time when inflation is rising. We have always accepted that money does need to be saved but this latest attack on pay is another hammer blow to the morale of nurses, who are already in the middle of a two year pay freeze, and who are witnessing the NHS going through unprecedented upheaval.
“It is for the independent and expert pay review body to recommend an appropriate and fair deal for frontline workers – not the government. The RCN will be considering the serious implications of these proposals with the utmost urgency.”
On the possibility of local labour markets, Dr Carter added: “We fully support the national Agenda for Change process, which ensures local managers are not tied up in negotiations and able to focus on patient care. The suggestion that public sector pay should be made more responsive to local labour markets is a distraction and not something we would support.”
Unite General Secretary Len McCluskey said the chancellor was “determined not just to raid public sector workers’ pensions, but their wages as well”.
“His much-vaunted capital projects will be paid for from the wages of working people who are being squeezed and squeezed again, as they driven into desperate financial straits. The City has got off again scot-free,” he added.