To ask the Secretary of State for Health what assessment he has made of the effects of the market forces factor on hospital trusts that employ staff at nationally agreed pay rates in areas where average earning are below national averages. (201138)

The Department has commissioned two pieces of research to look at the impact of external labour markets on national health service staff costs. The first, a study on regional pay differentials in 2005 known as the ‘Aberdeen Study’ found that private sector wage rates were correlated with the vacancy rate for qualified nurses. As part of its current work programme, the Advisory Committee on Resource Allocation has carried out a review of the market forces factor. This work will be used to inform revenue allocations to primary care trusts for 2009-10 and 2010-11. The aim is to announce the revenue allocations by the summer.