Leader: NHS pay bill needs reform alongside services

The obvious inference from the first of HSJ’s regular Barometer surveys of senior HR professionals is that the NHS needs to find a way to control its pay costs, while developing service models in which staffing levels can meet demand. It is a quandary familiar to huge swathes of the private sector - and to which the response has ranged from the offshoring of production to an explosion in digital services.

A national health service, especially one as iconic and politicised as the NHS, will never have the luxury of this kind of service and labour market flexibility.

‘Barring the unexpected arrival of an economic boom, the next government will be faced with a challenge it cannot duck’

Neither should it. There is a persuasive argument that NHS provider organisations tend to be major employers in some of the most economically deprived communities and that reducing the take-home pay of staff just shifts the burden on to the welfare budget.

However, the clear message from HSJ’s survey is that the NHS is in danger of cutting off its nose to spite its face. “Unaffordable”, inflexible and wasteful terms and conditions are threatening job security in the service and, to a lesser degree, undermining the NHS’s ability to compete for services with the private sector.

Frustration boiling over

The frustration that the service is often spending its money on staff poorly boils over in the comments accompanying the survey.

Annual and sick leave; clinical excellence awards; on-call and out-of-hours payments; travel allowances; maternity pay; redundancy terms; Agenda for Change banding and increments; the consultants’ contract; rewards for very senior managers: all these and more are cited as examples of how the NHS is not getting value for money.

‘The electoral cycle means this ping-pong of responsibility is likely to continue for the next two years at least’

There is also a sense that there has been a collective failure on behalf of those in power to face up to the scale of the problem. While there is no direct criticism of NHS Employers over the renegotiated Agenda for Change deal, there is a clear verdict that it did not produce enough of a shift in workforce costs. One respondent notes that the changes will account for “a seventy-seventh” of the savings their organisation needs to make this year.

Responding to the question on whether further changes are needed to NHS terms and conditions, one HR professional cries out: “Yes, yes, yes. Is someone at national level going to have some courage? There has never been a better time to do this − the public are expecting it.”

Those at the centre would no doubt counter there are a number of levers already available to individual trusts that could be pulled more robustly if they really wanted to grasp the pay nettle.

The electoral cycle means this ping-pong of responsibility is likely to continue for the next two years at least. But, barring the unexpected arrival of an economic boom, it appears increasingly likely the next government will be faced with a challenge it cannot duck.

Overdue debate

So what of the longer term? Can the NHS reconfigure its services in a way which is both effective and affordable?

The government’s “mandate” for Health Education England delivers few clues as to the latter. There are sensible aspirations, for example, to educate more emergency care doctors and GPs; to ensure staff are trained to deliver care in people’s homes and to work across health and social care boundaries.

However, you will search in vain for recognition the NHS faces a challenge to the sustainable cost of its workforce.

More GPs and emergency care physicians will very probably mean fewer doctors of other types − but there appears to be little enthusiasm to say who and why.

A mature debate on how economic as well as the service factors will shape the NHS workforce is as overdue as one of the more outdated elements of the service’s employment contracts.