David Blunkett, Labour's health spokesman, said the department's action would reduce morale in the National Health Service and create instability. Other pay bodies covering teachers, armed forces and top civil servants are also believed to have been told that there should be a presumption of no automatic increases.
In the health service the Government is pressing to introduce local pay bargaining among the 500 hospital trusts. The department's evidence to the health review bodies, which report in the new year, asks that a 'strong steer' is given to the continued development of local pay negotiations.
Both the British Medical Association and the nursing unions are opposed to local pay bargaining and to attempts to bring forward performance-related pay systems for medical staff. Nursing unions, representing 510,000 nurses and midwives, have claimed a rise of 8.4 per cent.
'We do not accept the principle of performance-related pay for doctors and other health workers,' a spokesman for the BMA said. 'We have challenged the Government to produce evidence that it works for doctors.'
Gerald Malone, the Minister for Health, said he was confident that a settlement could be made which would satisfy nurses and keep to the Government's public sector pay guidelines.
'We have to get a pay claim right if patient services are to be maintained,' he said during a BBC radio interview. 'We have to be fair to the general public in ensuring there is a settlement that does not undermine all the Chancellor's efforts to produce a low- inflation economy.'
The Department of Health expects trusts to make 'efficiency savings' which could be passed on in increased wages.
In a letter to Mr Malone, Mr Blunkett said: 'Local pay bargaining will potentially cost trusts tens of thousands of pounds each to introduce. Government policy is storing up real problems for the future by undermining the national pay review bodies.'Reuse content