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Regional Pay (NHS)

Volume 552: debated on Wednesday 7 November 2012

I am pleased to see some of my west country colleagues here and to see the Minister in her place.

In May, the BBC asked the Deputy Prime Minister about regional pay, and he could not have been clearer:

“There is going to be no regional pay system. That is not going to happen.”

Yet, as we speak, plans are under way at 20 of our biggest hospitals and mental health trusts in south-west England to introduce just such a regional pay system. The organisations involved include the main hospitals in Exeter, Plymouth, Truro, Taunton, Yeovil, Poole, Bath, Bournemouth, Bristol, Gloucester and Salisbury. In total, more than 88,000 NHS staff in the south-west are affected.

Early this summer, the trusts announced their intention to form a pay cartel and to move away from the national pay negotiating process known as Agenda for Change. They committed £10,000 each to spend on business consultants to help them draw up their plans; they employed lawyers; and they set up a website. Based on the initial proposals, the trade unions, royal colleges and other organisations representing staff estimate that nurses and other NHS staff in the south-west could face a 15% pay cut, as well as changes to their holiday and other entitlements. The cartel has threatened to sack and re-employ staff to force through its plans.

I have to tell the Minister that, in my more than 17 years in this place, I have never received as many letters and e-mails expressing such anger and dismay as I have on this issue. Here is a taste of just some of them. A senior nurse in Exeter wrote to me, saying:

“My staff are at breaking point. I predict a mass exodus and patients will not receive safe high quality care.”

Another constituent wrote:

“Myself and my care workers are sick with worry over this and how I will be able to look after my family.”

Another wrote:

“I am the sole provider for a family of six and do two other jobs on top to cope. This will be the final straw.”

I thank the right hon. Gentleman for giving way so early in his speech. Will he undertake to share all those e-mails and letters with me so that I, too, can write to all his constituents to assure them of the Government’s plans?

I am not prepared to reveal the identities of those people without their permission. I have already written to the Secretary of State and his predecessor, and I will come in a moment to the way that they responded, which was totally unsatisfactory. However, I have given the Minister the gist, and I hope that she is not challenging the veracity of my constituents’ concerns.

Another constituent wrote:

“Myself and many nurses are planning to leave or move abroad if this happens.”

Finally, another wrote:

“I have not worked a single shift without working late or missing my break. This has sent staff morale to rock bottom.”

It is clear from the testimony of my constituents—loyal NHS staff—that even before this plan is implemented, the mere discussion of it is having a devastating impact on morale. As the Minister will know, staff morale is an invaluable and extremely precious commodity in the NHS. There is a clear correlation between high morale and safe and high-quality care. Most NHS staff go the extra mile in their jobs, but they have already had two years of pay freezes, and doing unnecessary and avoidable damage to staff morale will inevitably affect the quality and safety of patient care.

Will the right hon. Gentleman congratulate the trusts in my area—the Torbay and Southern Devon Health and Care NHS Trust and the South Devon Healthcare NHS Foundation Trust—which are not joining the pay consortium for the very reason that they think that it will damage morale and productivity and inhibit their ability to recruit the best possible people to the health care service in my constituency?

Yes, indeed I do congratulate the trusts in Torbay, which have held out against the pressure to join this cartel. I hope very much that the hon. Gentleman will put his money where his mouth is and join Labour MPs in the Division Lobby later today, when we will have a main debate on this very subject in the main Chamber.

I thank my right hon. Friend for bringing this issue before us; we have another debate on regional pay this afternoon, but it is important that we have an opportunity to focus on the south-west. Does he agree that one of the most damaging things for morale was that staff found out about the proposals only because they were leaked? There was no attempt at consultation beforehand; the consortium was set up, and the fact that those involved were trying to undermine people’s pay and conditions without talking to them gradually dribbled out.

Yes, I absolutely agree: the whole thing has been handled extremely badly by the trusts involved.

If the proposals go through, the trusts involved are likely to see an exodus of staff, not only to other regions, but, as the hon. Member for Torbay (Mr Sanders) suggested, to trusts in the south-west that are not part of the cartel.

The right hon. Gentleman is making a powerful case, but I am curious about one thing. There is a limited amount of money that can be spent in the national health service—the Government decided to increase it, although I seem to remember that the previous Labour Government were considering cutting it—so the choice is simple: we either go for a variation on regional pay or we make people redundant, and I am not convinced that that argument has been thought through. Would the right hon. Gentleman therefore be willing to join me in trying to convince the Government to do something about the tariff that is paid to hospitals in the south-west? We are short of money, and we need to find a way to improve that situation.

The tariff is a separate issue, but that was an interesting intervention, because, for the first time, we had a Conservative MP actually speaking out in favour of regional pay in the NHS. That is not Government policy, and in all the correspondence that I have had from Ministers, they have denied that it is. At least the hon. Gentleman is one of the few MPs in the south-west who has the courage to be honest and to say that he supports it. He is almost alone; I have not spoken to a single other Conservative or Liberal Democrat Member of Parliament who supports this policy. I hope, as I said earlier, that those who do not support it will have the courage of their convictions, stand up for the west country for once and vote for the Labour motion in the main Chamber later.

As I was saying, there will be an exodus of staff to other regions and to hospitals in our region that are not part of the cartel. Between May 2010 and 2012, the south-west suffered the biggest reduction—3.54%—in qualified nurses of any region in England, and the situation is set to get worse. However, the impact will be felt not just on the health service. The south-west of England already has the biggest gap of any region in England between housing costs and wages. A reduction in public sector pay in our region of just 1%—of course, the reductions that we are talking about are much bigger—would suck £140 million out of the south-west economy, at a time when we need more, not less, demand in our economy.

I acknowledge, as do the unions and staff organisations, that there may be a case for changes to Agenda for Change. The NHS—this is partly a response to the point made by the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile)—is, after all, having to cope with the huge costs of the Government’s disastrous reorganisation of the health service, combined with its tightest-ever funding. However, the answer is to deal with these issues in national talks, in the usual way, and not to allow these parallel plans to proceed, threatening to derail national discussions and making a sensible agreement at national level less likely.

I would be grateful if the right hon. Gentleman clarified whether he supported the previous Government’s introduction of regional pay in the Courts Service or the freedoms that they gave foundation trusts, which enabled this very cartel to be established?

I am afraid the hon. Gentleman is wrong: the FT legislation allows FTs to pay wages that are as good as, or better than, those under Agenda for Change, so the claim often made by Liberal Democrats, who feel very uncomfortable being part of a Government who support regional pay in the NHS, is wrong. The FT legislation is quite clear: FT hospitals must pay rates as good as or higher than those under Agenda for Change. The hon. Gentleman’s point is completely irrelevant to our discussion.

In their answers to me so far, the current Health Secretary and his predecessor have tried to hide behind the very flexibility argument that the hon. Gentleman has just made—that flexibilities already exist in Agenda for Change—and they have declined to intervene. Yes, there are flexibilities in Agenda for Change to allow for local market conditions, but that is not what we are talking about. What we have here is an explicit—those involved have made it explicit—walking away from Agenda for Change, with the wholesale adoption of a regional and regionally negotiated pay structure, which, incidentally, takes no account of the different market conditions in, say, Cornwall and Wiltshire.

I know, as a former health Minister, that all it would take is a simple word from the Minister here today, and this madness could be stopped. Will she undertake to Members to intervene and make it clear to the 20 trusts involved that the Government do not support regional pay and that they should rejoin the national pay negotiation process under Agenda for Change? If she will not do that, she needs to explain why—and, please, no flannel about the NHS trusts being autonomous. She has been a Parliamentary Private Secretary and then a Minister for long enough to know that all she needs to do is speak to Sir David Nicholson, the chief executive of the NHS, or to the estimable chief executive of the southern region, Sir Ian Carruthers, and they would stop what is happening. If she will not intervene, she also needs to explain why she is prepared to continue to inflict damage on south-west NHS staff morale and destabilise the national pay negotiations.

If what is happening was thought up in the Department as a clever ruse to get the national talks kick-started, or to try to wring more concessions out of the staff side, it has backfired disastrously. There is a sensible way through, which the Minister has the power to achieve: to agree changes to Agenda for Change at the national level. The alternative is continuing uncertainty, long-term damage to staff morale and a wholly irresponsible risk to patient safety and the quality of care in the south-west of England.

It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate the right hon. Member for Exeter (Mr Bradshaw) on securing the debate, although it does not seem to have been much of a debate, in the sense that no one else made a speech, although I am grateful for the interventions. I noted with great care—which is why I intervened on the right hon. Gentleman—his claim that he has had more e-mails and letters on the topic than on any other topic in his 17 years in this place. That is an astonishing achievement.

I said I have never received so many e-mails of such strength of feeling, individually written, that were not part of a campaign such as on hunting, but were from individual, hard-working staff in the NHS writing to me about their experiences and their anger. The Minister should take note of that.

I am extremely grateful for that clarification and I take note. My offer remains: if the right hon. Gentleman would be so good as to contact all those people who wrote to him and seek their permission—in my experience hon. Members often do not need to seek such permission from someone who has contacted them, but simply pass messages on to the Minister—I will happily reply to every one of them, explaining the Government’s view on the matter. I very much hope that the right hon. Gentleman, too, will share my comments today with all the people who have contacted him.

First, I pay tribute to everyone who works in the national health service, for their continuing hard work and dedication to the NHS. The Government have made it clear that they support the continued option of national terms and conditions in the NHS. We expect most employers will want to continue to use them, provided that the terms remain fit for purpose and affordable. However, every pay system needs to be kept under regular review, to ensure that it remains sustainable. The responsibility for that, in respect of the Agenda for Change pay system, rests with the NHS Staff Council, a partnership of NHS employers and trade unions. The council has been considering the possibility of changes to the national terms of the Agenda for Change for about two years. Indeed, I understand that the right hon. Member for Leigh (Andy Burnham) asked them to explore the possibility of more

“flexibility, mobility and sustained pay restraint”

as long ago as 2009, when he launched “From good to great”, but there was no change then, and we are still waiting for any change.

The trade unions tell us that we should stop the south-west consortium—and the right hon. Member for Exeter makes the same point—until we can see whether a national deal is achievable. However, experience suggests that that would be a battle of hope over experience. Negotiations in the current economic climate are not easy and they are not helped when some smaller unions have already declared that they will not support any change. They prefer to stick their head in the sand and put NHS organisations and their members’ job security at risk, rather than engaging in any meaningful way. There is no point believing that the Government can wave a magic wand and make the financial pressures disappear.

When did the Department of Health first find out about the formation of the consortium? When I have written to Ministers in the past, all that I have been told by way of response was factual information about when the document was leaked to the press. They have refused to answer that question about whether they were involved in setting up the consortium, or encouraging people to set it up before it was formed.

I believe we were not, but I will make further inquiries of my officials, and we will write to the hon. Lady and give her assurances about that. If I am in any way wrong I know that I will be corrected, and will be happy to say so.

It is my understanding that several options have been put forward. No decisions have been made, but every effort is being made to engage with the staff to reach an agreement. I just wish that all the trade unions that represent so many people in the south-west consortium would engage in that process. It is my firm view that that is the absolute duty and aim of all responsible trade unions.

It is my understanding that the cartel is not entirely engaging with the unions in the way that the unions believe it should. What powers do the Government have to intervene in the activities of the cartel, within the powers and guidance that were conveyed to them by the previous Government in the regulations?

I hope to answer those points in my speech, in the time available to me. If I do not, I will of course write to the hon. Gentleman and answer those questions in full.

I want to talk about the financial situation in the national health service. We have already guaranteed the NHS preferential funding for the current spending review, ensuring real-terms growth every year and additional cash of more than £12 billion per annum by 2014, going into 2015. We are driving up £20 billion of quality, innovation, productivity and prevention savings, stripping out bureaucracy, cutting management costs by up to one third and shifting resources to front-line services. To be blunt, we cannot spend more on public expenditure without putting our national financial reputation at risk. We must demonstrate that we have the commitment to ensure that our economy is sustainable.

The south-west consortium faces a stern choice. It can either continue to ignore the problem, and hope that it will go away, or it can face the challenge, share it with its staff and their representatives, and work in partnership to achieve the best outcome for everyone concerned, especially patients. I used to be a shop steward and a member of the National Union of Journalists. I understand and value the role of good partnership working with staff and trade unions. I believe that the south-west consortium is taking a mature approach. It published two discussion documents in August, setting out the scale of the financial and service challenge that it faces. It has not made any decisions. It has produced a paper, setting out a wide range of options for changes to terms and conditions, and how they might help. It has included options affecting all staff, including doctors, so that every opportunity is considered, no stone is left unturned, and there are no sacred cows. I believe that that is a responsible approach.

The consortium reaffirmed its commitment to national terms and conditions and agreed not to put any proposal to its boards until December, allowing reasonable time for the conclusion of national negotiations on a possible agreement to make Agenda for Change changes sustainable. I believe that that, too, is responsible.

The Minister sounds, from what she is saying, and what she said a little earlier, as if she supports the south-west cartel, which is an interesting development in Government policy; but she also says that she wants progress at the national talks. How does she think that having a parallel negotiation going on in one region will help her to get agreement at national level?

I absolutely support anyone who takes a mature and sensible approach to the matters. I also understand why the south-west consortium—like many others, no doubt—is frustrated, because a two-year set of negotiations continues when it should have reached an agreement. The trade unions must take a responsible approach to ensuring that we have a national health service that is sustainable. It is in the interests of their members, and they are meant to represent their members, whose interests they should put first.

The consortium has published two discussion documents. What is our attitude and what are we to do as a Government? To be clear, we support national terms and conditions of service, but not at any cost. Individual employers must have the right to exercise the freedom, which the Labour Government gave foundation trusts in 2003, to be free of ministerial control. That is what the previous Government did.

Having been contacted by many concerned constituents about the matter, I took the trouble to meet my local NHS trust chief executive to discuss those concerns and put them directly to her. Will the Minister assure me that the worrying spectre of a monolithic regional pay structure that would ill-suit employees in Cornwall as much as in Wiltshire will not be welcomed by the Government?

I agree with my hon. Friend. Monolithic structures would not be welcome. What is welcome is when trusts take a responsible view to ensure that they act in the best interests of their employees and that they have a financially sustainable system. That is in the interests of everyone—staff and patients.

Following my intervention on the right hon. Member for Exeter, he responded that the only flexibility is to exceed existing pay and conditions, not to go below them. Is that also the Minister’s understanding?

My understanding is that foundation trusts—the hospitals—have powers and a great deal of autonomy. That was the system set up and backed throughout by the previous Government, and it continues today. NHS employers are better placed to decide how best to reward and motivate their staff for the benefit of patients. They are better placed to assess whether national terms are fit for purpose or sustainable in the light of local competition, and to assess the options and risks of any recruitment or retention problems that might follow from introducing local pay. Such decisions should not be, in my view, made by Ministers.

Some Members have expressed concern that it is not fair to pay different rates for the same job in different areas, as it could undermine recruitment or morale. I understand and appreciate the arguments advanced by many people and the concerns raised by those on both sides of the House. However, if that was the case, one might have thought that the Labour Government should not have included high-cost area supplements or recruitment and retention premiums when they introduced Agenda for Change in 2004, and that they should not have abolished the right of the Secretary of State to direct foundation trusts in 2003. The Labour party gave those powers to employers, and I make it quite clear that they were right to do so. We now have to trust employers to exercise their judgment wisely and to use the skills and expertise of their non-executive directors to consider what is in the best interests of their patients. We have to recognise that they know what rates of pay are fair and necessary in their local communities.

The Opposition need to allow the system that they created to work, without the political interference and micro-management that typified their term in office. If they want to do something useful, they should encourage the trade unions—those that fund many of their Members of Parliament—to ensure a swift and successful conclusion to national negotiations. That will secure the Agenda for Change as a sustainable option for employers and staff alike. Above all, it will put patients first and foremost.

Sitting suspended.