1 August 2012

This post looks at the intersection of the financial issues of the Royal Cornwall Hospitals Tust (RCHT) and the Tory Libdem government’s localisation of pay which I have explored here several times.

The RCHT is one of the England NHS organisations which are working “in concert” in the Southwest Consortium on Pay and Terms and Conditions of staff. A key aim is to look at how to reduce their pay costs. The government has imposed NHS cuts/savings of £20 billion; the RCHT also has a debt to pay off.

The RCHT has to be financially up to moving to foundation status by 2014 or face merger into another trust. In a debate in the Commons on 16 July 2012 Andrew George, Libdem MP for St Ives, read from a letter to him from the chief executive of the RCHT (Hansard column 740). She appears to have clearly set out the genuine financial issues that the RCHT faces and the savings it needs to make to be financially sound according to Monitor which regulates foundation trusts; and the Consortium/RCHT “is looking at how pay costs may be reduced” while simultaneously keeping staff morale up and patients safe. That balancing strikes me as possible but a very difficult task.

The Tory Libdem government is (or possibly is not) exploring localising pay in the public service; that is, reducing it. This circumstance, along with the demand for hefty spending cuts in the NHS, feeds concerns that the Consortium will lead to pay cuts and worsened work conditions at, inter alia, the RCHT.

Challenged about the possibility of all this leading to cuts in NHS pay and worse work terms and conditions, Andrew Lansley, the health secretary for England, seemed to me to be muddled. He first said the government supported “local flexibilities” in the England NHS national pay framework. Frank Dobson, a former Labour health secretary, observed, “Meaning: pay staff less in the south west”  (Hansard column 748). Lansley then said “we are not proposing any reductions in pay…I do not believe they are necessary or desirable in achieving the efficiency challenge…no proposal for the reduction in pay or the dismissal and re-engagement of staff is, in my view, necessary” (column 748).

The next day Lansley returned to this in answer to an oral question from George:

“…trusts and NHS employers are responsible for the terms and conditions of their staff, and for ensuring, as Agenda for Change intends to, that staff who effectively have the same knowledge and competences have the same pay banding, wherever they happen to be across the country. That is the objective of Agenda for Change. As I said yesterday, and will continue to say, Agenda for Change can be improved — we made that clear to the pay review body — but we think it is possible, if the staff side works with us, to enhance Agenda for Change and increase its flexibilities, so that NHS employers can recruit, retain and motivate their staff, with local flexibility, in a national pay framework” (Hansard 17 July 2012 column 841).

There you have it. The message is: Reducing pay in the NHS is unnecessary and undesirable; the same pay band throughout England for people with the same skills and knowledge; local flexibilities in pay; looking how pay costs may be reduced.

This muddle has perhaps been cleared up a little. A leaked copy of the current thinking of the Consortium is apparently here.

This suggests, for example, exploring an increase in work hours and reviewing annual holiday entitlements which I am sure means reducing holidays not increasing them. I think that both of these are equivalent to reducing pay rates.

It looks as though Dobson is basically right, doesn’t it: “Meaning: pay staff less in the south west”. In any case I reckon that reducing pay costs (about two thirds of RCHT costs) without reducing pay or worsening work terms and conditions or reducing staff numbers or damaging recruitment and pursuing flexible sameness and maintaining patient safety demands first-class dexterity and cooperation from everyone.

It is unrealistic to expect the NHS to be wholly insulated from the financial and economic problems of Britain and the world. The argument is not about bringing down the UK deficit but about the rate at which that is done so as not to damage the economy further; and how far everyone is being required to pay their share of tax and take their share of austerity – and whether the present difficulties are being used to mask the unmandated, scarcely discussed reactionary reshaping of Britain by the Tory Libdem government.

Oh, you might like to turn to the views from the Care Quality Commission about the  Serco out-of-hours GP service in Cornwall and about staffing levels at Wheal Agar ward at the RCHT hospital at Treliske.