Pay reform sets scene for NHS modernisation

Hailed as the most radical change since its foundation in 1948, Quentin
Reade reports on the ‘win-win’ salary package that will help bring the NHS into
the twenty-first century

A deal to give NHS pay the biggest shake-up since the service began has been

Negotiated by 17 organisations including UK health departments and NHS
employers, trade unions and employee groups, the ‘Agenda for Change’ package
will raise wages, simplify and modernise pay scales and provide an incentive to
boost skills and work unsociable hours. It will also create more time for
doctors to spend on specialist work.

The existing pay system, which has been described as ‘arcane’ by the
Government, consists of almost 650 different staff grades and numerous
arrangements for leave, overtime and working hours.

The package will apply to all staff apart from doctors, dentists and senior
managers. It is still subject to further consultation and pilot schemes, and
must be accepted by union members before it can be implemented.  However, it has been widely welcomed by HR
and health professionals alike, and many claim it is the way forward.

The Department of Health’s head of HR Andrew Foster said the reform will
encourage new working practices, break down outdated barriers and produce
better, faster care for patients.

"As staff develop into new roles," he said, "so patients will

He added that by 2005-2006, the system should help to free up around 2 per
cent of consultants’ time and between 10 and 15 per cent of other hospital
doctors’ time.

Elaine Way, president of the Association of Healthcare Human Resource
Management (AHHRM), welcomed the announcement, calling the Agenda for Change a
win-win situation.

She said: "[The Agenda for Change] will facilitate new ways of working
to support service modernisation and it will fairly reward staff for gaining
and applying new skills."

She added that the new pay system being underpinned by a national job
evaluation system was essential to its success.

"This will enable us to address equal pay for work of equal value
issues," she explained.

Way said that the NHS has suffered recruitment and retention difficulties
for particular posts and in certain areas, but pay reform and other measures
will help deal with these difficulties.

Lew Swift, head of personnel at the Walton Centre for Neurology and
Neurosciences, Liverpool, said the changes are "long-overdue".

"[The deal] is a hugely impressive achievement – it will take us
through to the future," he said.

A key element is a reduction in the number of NHS pay grades. Mike Griffin,
HR director at Kings College Hospital NHS Trust, said the current NHS system is
so complex that many external payroll providers would not work with the NHS,
and different allowances meant that staff salaries fluctuated on a weekly

Griffin believes the changes can reduce staff vacancies within the NHS and
create stronger links between groups.

"There is greater integration between the groups in the NHS. The
development of a single pay system is an important psychological step to break
down [the barriers]," he said.

"I see it as an opportunity to accelerate the pace of change within the

Griffin said that a great deal of detail still needs to be established and implementing
and communicating the change will be a major undertaking, but he expects a
great deal of support and training.

Health secretary Alan Milburn called the Agenda for Change "the most
radical modernisation of the NHS pay system since its foundation in 1948".

He said: "In essence, it is about paying more to get more, so that
staff who take on new responsibilities get extra rewards. Agenda for Change
proves that negotiation works.

"This is a ‘something for something’ deal. Pay for modernisation."

The NHS Confederation – the body which represents the organisations that
make up the NHS – also welcomed the plan.

Gill Morgan, chief executive of the confederation, said: "Agenda for
Change has represented the largest and most complex pay negotiations that have
ever taken place in the NHS – and we congratulate the trade unions and four UK
health departments on this achievement.

"[The] announcement clearly demonstrates how the Government, employers
and staff organisations can work together to produce a modernised pay system
that benefits staff, employers and patients alike.

"We believe the deal gives staff a fair and transparent pay system with
clear career progression, and gives employers greater flexibility to create
roles that better meet patient needs," Morgan added.

Need to know…

– The existing pay system, which has been described as ‘arcane’
by the Government, consists of almost 650 different staff grades and numerous
arrangements for leave, overtime and working hours

– The new system will introduce a simple set of core terms and
conditions, based on eight pay bands and a standard working week of 37.5 hours

– The new pay system will work fundamentally on the basis of job
evaluation. This means that the basic pay staff receive will reflect the
knowledge, responsibility, skills and effort required in their job, rather than
their historic job title or occupational group

– To progress through the pay system, employees will have to
meet certain competencies, using the new Knowledge and Skills Framework

– There will be a new NHS minimum wage of £10,100 a year

– A newly qualified ‘grade D’ nurse will earn £17,000 – up 6
per cent from £16,005

– Local NHS employers will have greater freedom and flexibility
to create new types of jobs and pay staff more money in expensive regions such
as London

– More than £110m is being invested in the capital’s workforce,
and an additional £55m will go to staff in the south of England

The pilot scheme sites

– James Paget Healthcare NHS Trust
– Guy’s and St Thomas’ Hospital NHS Trust
– City Hospitals Sunderland NHS Trust
– Papworth Hospital NHS Trust n Aintree Hospitals NHS Trust
– Avon and Wiltshire Mental Health Partnership NHS Trust
– South West London and St George’s Mental Health Trust
– West Kent NHS and Social Care Trust n Herefordshire NHS Primary Care Trust
– Central Cheshire Primary Care Trust
– North East Ambulance Service NHS Trust
– East Anglian Ambulance NHS Trust

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