Finance: Costly side-effects

Public sector finance Due to staff shortages local pay bargaining may backfire on NHS trusts. By Paul Gosling

Local pay bargaining in the NHS, which begins properly for the first time this week, may prove a poisoned chalice for trusts. Both employers' advisers and unions say that staff shortages could lead to some high pay awards, reflected in the national pay claim of 6.5 per cent, more than twice the rate of inflation.

NHS trusts had budgeted for a 2.7 per cent pay increase for the new financial year and were disappointed by the awards agreed by the pay review bodies.

Doctors, who are not subject to local pay bargaining, have been given rises above this level. Consultants have a two-stage increase, starting at an extra 2.8 per cent from April, rising to 3.8 per cent from December. Junior doctors' increases will be between 4.3 and 5.8 per cent from April, with an extra 1 per cent in December.

Nurses' and midwives' pay increases should also exceed the rate of inflation as a result of local bargaining. They will get a national 2 per cent increase, plus whatever can be obtained locally. As a result of a framework agreement signed last September, the average increase achieved in local negotiations will be built into the national pay tables, thereby ensuring a continuation of an element of national pay bargaining.

"This is the first year that real local pay negotiation takes place," says Sarah Silcox, editor of the IRS Health Service Report. "Last year it was very limited." Ms Silcox predicts that unions will use a pattern bargaining strategy based on that used in industry.

Negotiation will be delayed with trusts that have weak finances, while those that are better off - having been allocated more government money as a result of expanding populations - will be pushed to award higher increases. Those will then be used as the basis for negotiation elsewhere.

"Whether that can work in the public sector, where those who can't afford it just can't afford it, is the question," suggests Ms Silcox. Trusts' hands have been tied by not being able to trade off changes in working conditions against pay rises, she points out.

The unions argue that trusts have little option but to pay higher increases than planned. Bob Abberley, head of Unison's health group, says: "Trusts are very nervous. They are taken aback by the size of the national element."

Unison says that is absurd that the Government has introduced local bargaining at the same time that nursing has its biggest staff shortages since 1988, when an additional pounds 1bn had to be injected to attract more nurses. It adds that trusts are already leap-frogging each other in areas where there are severe recruitment problems.

"We will play one trust off against another. That is what local bargaining is, what they expect us to do," adds Mr Abberley. "We are better prepared than they are. They will have a rough ride."

Trusts fear that Mr Abberley may be right. Philip Hart, director of the National Association of Health Authorities and Trusts, is pushing trusts to join their local pay forum, which could form the basis of a national pay forum.

It is only then, Mr Hart argues, that trusts can effectively influence the outcome of the pay review bodies, help to introduce more nurses into the profession by addressing national problems of recruitment, and increase local pay flexibility. Mr Hart points to the South-west's Pay Forum as an example of how a national pay information service might work. Mike Withyman, the Pay Forum's pay information and research manager, agrees that trusts are worried that the staff side is better prepared than management.

"The employer's side wants to be given the same information," says Mr Withyman. "Trusts feel they need to network on this. They don't want to get into a pay spiral, with the staff side playing them off against each other."

The biggest challenge facing the unions is maintaining a joint campaign. Unison insists they can. Bob Abberley says: "We have got our act together, we are all together. There are no arguments on the local staff sides. There will be no opportunity for divide and rule."

But the Royal College of Nursing admits that the unions have different priorities. While Unison is pushing for improvements for their lower paid members, the ancillary workers, the RCN is solely interested in the welfare of nurses. The RCN is just as interested in improving job security by phasing out temporary contracts as it is in raising pay. "There will be horse trading at a local level between unions," says an RCN spokeswoman.

There is long-standing mutual distrust between Unison and the RCN. There is even a feeling within the RCN that Unison is happy with the loss of national pay bargaining, which may lead to higher pay offers. The RCN remains totally committed to the use of pay review bodies and a single national pay system for nurses.

When the Government pushed for local pay bargaining it was expected it would lead to lower pay settlements. It is ironic that it now appears that the opposite may be the case, not least because it is the unions rather than the trusts that are the better prepared.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: PR, Marketing & Events Executive - Southwark, London - £35,000

    £30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...

    Selby Jennings: C++ Developer – Hedge Fund – New York

    $80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

    Selby Jennings: Java Developer Enterprise Specialist –Paris,France

    €30000 - €50000 per annum, Benefits: Competitive Bonus: Selby Jennings: Java D...

    Selby Jennings: QA Engineer Lead – Hedge Fund – Chicago

    $60000 - $90000 per annum, Benefits: Competitive Bonus and Employee Investment ...

    Day In a Page

    In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

    Iran is shifting from pariah to possible future policeman of the Gulf

    Robert Fisk on our crisis with Iran
    The young are the new poor: A third of young people pushed into poverty

    The young are the new poor

    Sharp increase in the number of under-25s living in poverty
    Greens on the march: ‘We could be on the edge of something very big’

    Greens on the march

    ‘We could be on the edge of something very big’
    Revealed: the case against Bill Cosby - through the stories of his accusers

    Revealed: the case against Bill Cosby

    Through the stories of his accusers
    Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

    The Meaning of Mongol

    Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
    Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

    Kenyans still waiting for justice over Mau Mau uprising

    Thousands join class action over Britain's role in the emergency
    Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

    The last Christians in Iraq

    After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
    Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

    Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

    Britain braced for Black Friday
    Bill Cosby's persona goes from America's dad to date-rape drugs

    From America's dad to date-rape drugs

    Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
    Clare Balding: 'Women's sport is kicking off at last'

    Clare Balding: 'Women's sport is kicking off at last'

    As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
    Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

    Oh come, all ye multi-faithful

    The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
    Dr Charles Heatley: The GP off to do battle in the war against Ebola

    The GP off to do battle in the war against Ebola

    Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
    Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

    Flogging vlogging

    First video bloggers conquered YouTube. Now they want us to buy their books
    Saturday Night Live vs The Daily Show: US channels wage comedy star wars

    Saturday Night Live vs The Daily Show

    US channels wage comedy star wars
    When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

    When is a wine made in Piedmont not a Piemonte wine?

    When EU rules make Italian vineyards invisible