Old-fashioned compromise

analysis

The Department of Health has struck an old-fashioned if ingenious compromise with the leaders of 600,000 workers in National Health Service trusts.

In fact, the deal agreed early yesterday probably gives the unions more than they dared hope. While employees' representatives have conceded the important principle of local pay negotiations, they have maintained a strong national input into wage bargaining. The scope for pay variations at trust level is strictly circumscribed. The issue of locally varied employment conditions has been "put on the back burner".

This contrasts with the Government's initial intention to introduce full- bloodied local pay bargaining in all 500 trusts. The aim was to ensure that each organisation was highly sensitive to its local labour market and, as a corollary, the unions would lose national negotiating power in the country's biggest bargaining group.

Over the last year the line has been toned down under the pragmatic Ken Jarrold, the NHS's human resources director. He began to talk about "local bargaining in a national framework". His opposite number, Bob Abberley, head of health at public service union Unison, preferred "national bargaining in a local framework". A deal was possible.

Under the formula, pay will initially be determined locally. At the end of the "bargaining season" employees and unions will agree a figure which "reflects the outcome of the local settlements" for a range of different jobs. The following year the pay of all NHS staff who fell behind will be uprated to that figure as a starting point for a new round. The nurses' pay review body and the national Whitley council machinery would also retain their function of recommending a national increase to the Government based on the outcome of local settlements and other evidence from unions and employers.

Following those processes individual trusts would then be free to negotiate further increases. Given the national input into pay rates, trusts will have little scope for additional deals. Mr Abberley calculates it would be little more than half a percentage point, while Mr Jarrold has adopted a "gradualist" approach.

This year NHS staff have been offered 1 per cent nationally and up to 2 per cent from local talks. The formula will operate in full from next April.