Unions seize chance to modernise NHS pay structure with fairer grading

Nearly 15 years since the implementation of the Agenda for Change pay system, introduced to unify pay across the NHS, the government and nursing unions are discussing the need for modernisation

• Talks have started on a 2018 pay deal for NHS staff
• There is recognition that change is needed in the AfC system
• Unions seek a fairer pay structure and a meaningful pay rise

For the first time in a decade, nurses’ unions have the chance to negotiate changes to the Agenda for Change (AfC) pay structure, which has been governing pay in the NHS since 2004.

Exploratory talks between government, NHS Employers and the 14 trade unions known as the staff side are under way on a 2018 pay deal for NHS staff, with the prospect of raising issues that have long lain dormant.

Lead negotiator for the staff side, Unison head of health Sara Gorton says: ‘Any system needs maintenance. The priorities we have been pushing are around ending low pay, improving starting salaries, removing overlaps between pay bands and making it quicker for staff to get to the top of bands.’

Background

The landmark white paper, or discussion document, on AfC, published in 1999, called for radical changes to the NHS pay system that would offer staff equal pay for work of equal value.

The so-called Whitley Council pay system then in use was based on an outdated civil service pay framework, originally drawn up during the first world war.

Though Whitley was still being used, from 1989 there was a clinical grading system for nurses, with A the most junior and I the most senior.

However, this system meant that different types of NHS staff were on different pay terms and conditions – staff working in the same team could be doing 35-hour or 37-hour weeks.

RCN associate director employment relations Josie Irwin says: ‘The real problem at this time was an equal pay issue.’

Radical for its time

She explains that predominantly male staff groups such as facilities and maintenance staff were being paid on a bonus system, but predominantly female groups including nurses were not. It was not a level playing field.

In 1997, after 18 years of Conservative rule, the Labour party entered government with a list of promises to improve public services.

Then Labour health secretary Alan Milburn called AfC the most radical modernisation of the pay system since the NHS was founded in 1948, saying: ‘It is a fair deal for NHS staff and a good deal for Britain’s NHS.’

The aim of AfC was to make the NHS pay system fair and ensure that every nurse, midwife and allied health professional doing the same work received the same pay wherever they were in the country.

In addition, recruitment and retention premiums were allowed to be added in places such as London, due to the higher cost of living.

Pay for work done

This would stop pay being based on a job title and instead base it on work done. It entailed evaluating all non-medical NHS posts against national job profiles.

Between 1999 and 2003, when AfC was being developed and negotiated, Barrie Brown was lead negotiating officer for his union, an earlier incarnation of Unite.

‘Unions have been really frustrated that since 2010 we have been unable to get engagement from the government on changes to the system’

Sara Gorton, lead negotiator for the staff side

‘It was a bespoke job evaluation process,’ explains Mr Brown. ‘It was equality-proofed in terms of gender and ethnicity, and what we ultimately achieved was very significant.

‘Looking back, it was a nonsense that someone in a particular staff group should have less holiday leave or work more hours than their counterpart.

‘AfC recognised that all staff make an equal contribution to the NHS and should be rewarded and recognised in their contractual arrangements.’

Need for change

Despite the undeniable benefits of a pay system rooted in a recognition of a need for equality, staff side organisations have been lobbying for change within it for a number of years.

Ms Irwin says the principal reasons for unhappiness with AfC relate to overlaps between the different pay grades.

She says: ‘If you get promoted, you might start on a pay point which is not very different to one you are already on, so the promotion doesn’t mean much.

Bands and discrimination

‘Also, some of the pay bands are very long and it takes ages to move up them.

‘Experts tell us if you have long pay bands this affects discrimination, as many women take time out to have children and so take a long time to move to the top of a band.’

There is a recognition among staff side and government that change is needed within the AfC system.

In the last multi-year pay deal, negotiated with government in 2008, the staff side agreed on some changes aimed at reducing the longest bands and making it quicker for staff to get to the top of the band.

Too many steps

However, the project was halted in 2010, when public sector pay restraint was introduced in response to the global financial crisis.

Ms Irwin says that during negotiations for the 2008 pay round there was a longstanding concern that some of the AfC pay grades had too many increments in them.

‘The reason for these incremental steps was essentially to slow down the rate at which people got to the top of their band and thus make it cheaper for employers.

‘But in 2008 we were looking at starting a process where we would change the pay bands by making them hold fewer increments.

‘We started with band 5 and took out the middle increment, adding the extra money to the top and the bottom of the band instead.

‘Then the economic crisis happened at the end of 2008 and everything went belly-up and there wasn’t enough money to do anything else.’

Competing priorities

One of the main elements of the unions’ pay claim for 2018 is reform of the AfC pay structure.

Ms Gorton says: ‘Unions have been really frustrated that since 2010 we have been unable to get engagement from the government on changes to the system.’

She says that in 2015 the unions proposed a set of structural changes to the current pay scale.

‘Despite indications that employers saw the benefits of many of these changes, competing priorities for government resources meant that the staff council was not given a mandate to enter into formal negotiations.’

Meaningful pay rise

The NHS Staff Council has overall responsibility for the AfC pay system and has representatives from employers and unions.

‘The balancing act we now have to perform is to see if the money that the government might make available can be used to make the pay structure better and fairer as well as giving staff a meaningful pay rise,’ Ms Gorton says.

Health and social care secretary Jeremy Hunt told the independent NHS Pay Review Body in December: ‘Any agreed deal would need to be one that gives valued staff a fair pay rise alongside improving recruitment and retention and developing reforms which better reflect modern working practices, service needs and fairness for employees.’