The Staggers

The New Statesman’s rolling politics blog

Lansley pushes for lower paid NHS staff in poorer areas

Regional pay bargaining supported by internal Department of Health document.

By Alex Hern Published 22 April 2012 11:08

Andrew Lansley. Photograph: Getty Images

The Observer reports today that the health secretary, Andrew Lansley, is planning to introduce regional pay bargaining into the NHS, meaning that staff in poorer areas will be paid less than those in London and the south east. Astonishingly, the only proposed exception to the new policy would be already highly-paid managerial staff working to deliver Lansley's unpopular reforms to the health service.

Defending the special arrangements, the Department of Health argues that they are necessary in order to:

Attract and retain high-calibre leaders and staff responsible for transforming delivery.

The department fails to explain why such measures are only needed to attract staff responsible for transforming delivery, and not also to attract staff in other important roles in the NHS such as doctors, nurses, hospital porters, cleaners and paramedics.

The move by the health minister comes in response to a wider government programme to introduce regional pay bargaining into all parts of the public sector. In his budget last month, George Osborne announced:

We're also looking to see whether we can make public sector pay more responsive to local pay rates. It is something the last Government introduced into the Court Service. London weighting already exists across the public sector. Indeed, the Opposition have proposed the interesting idea of regional benefit rates.

So we should see what we can do to make our public services more responsive, and help our private sector to grow and create jobs in all parts of the country. We've asked the independent Pay Review bodies to look at the issue. Today, we publish the evidence that the Treasury are submitting to them. And some departments will have the option of moving to more local pay for those civil servants whose pay freezes end this year.

Responding to the news, Labour's shadow health secretary Andy Burnham told the paper:

National pay is part of what underpins a truly national health service. Labour will defend it, as it is fair to staff, helps control costs and brings stability to the system.

It is often harder to work on the NHS front line in more deprived parts of the country and yet this government wants to pay those staff less and reinforce the north-south divide. It will infuriate NHS staff to see senior managers arguing for one rule for themselves, and another for staff. They are seeking to insulate themselves from these changes, while driving down pay for thousands of front-line staff across the country

Regional pay bargaining is particularly controversial in the health service due to its status as the largest single employer (verging on monopsony) of health professionals in the UK. Without the opportunity to take their labour elsewhere, employees are unable to ensure through normal market forces that the wage they are paid is competitive.

Arguing in favour of regional pay, the departmental document suggests:

Setting a national basic pay rate at a "minimum level necessary" and paying additional supplements in particular geographical zones.

It says: "Current rates of pay in the NHS do vary geographically, but significantly less so than the pay of comparable staff in the private sector. The introduction of more sensitive market-facing pay would therefore enable more efficient and effective use of NHS funds."

It further argues that "where the NHS pay premium is relatively high there is the potential for private sector enterprise to be crowded out with adverse impact on the prospects for local economic growth."

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Mon, 2012-04-23 11:35 — Hal (not verified)

The effect of this policy on hospitals near the borders between regions could be large: patients being sent by GPs to the cheaper region to benefit from lower prices could destroy the hospitals in the more expensive region.

Is this part of the plan?

Mon, 2012-04-23 11:16 — The Red Bladder (not verified)

I see that Mr Lansley held his Cambridge South seat by a majority of 7,838 from an electorate of 78,950 at the last General Election. I wonder how many of those electors are paid from the public purse? I would imagine that his statement make make a few of them rather annoyed!

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Sun, 2012-04-22 23:03 — Psyfeesh (not verified)

Regional Pay. Ok. If it has to be then I would expect the same to apply all across the public sector starting with our MPs. Afterall, surely they should be setting an example because "we're all in this together".

Sun, 2012-04-22 23:59 — Agent (not verified)

Why not privatize parliament? actually that could sort out the party funding issue as well.

Sun, 2012-04-22 19:16 — Eddy S (not verified)

regional pay is a sensible policy where there are lower costs of living, money buys you more, so a nurse in northern ireland would not get one as much as a nurse in the west midlands where costs are higher - as long as it is adjusted for actual costs we should promote this policy, this will also remove regional distortions and encourage more private sector jobs in areas like northern ireland.

Sun, 2012-04-22 18:51 — TheRedBladder (not verified)

I would imagine that the county of Cambridgeshire is considered out side of London and the South East so how much cut in salary will Mr Lansley take? After all, we are all in it together?

Sun, 2012-04-22 18:53 — TheRedBladder (not verified)

Sorry about the duplication - it will come to you when you reach my age!

Sun, 2012-04-22 18:42 — TheRedBladder (not verified)

Regional pay for all in the public sector eh? I should imagine that Cambidgeshire is out side London and the South East so how large a reduction in salary can we expect Mr Lansley to take? Surely he will, we are all in this together!

Sun, 2012-04-22 12:02 — Barrie J (not verified)

Do you see the connection?

While in opposition as health spokesman, Andrew Lansley accepted a donation of £21,000 from John Nash, the chairman of private healthcare provider Care UK and founder of the private equity fund Sovereign Capital, which owns several other private healthcare companies, to help fund his private office, leading to allegations of a conflict of interest. Such companies stand to be the biggest beneficiaries of Conservative policies to increase the use of private health providers within the NHS.

Andrew Lansley's wife, Sally Low, is the managing director of Low Associates. Sally Low denies that Low Associates is involved in lobbying, preferring to describe its activities as providing "strategic advice" to clients. Low Associates helps people prepare before they give evidence to committees of MPs, and Sally Low has given speeches on improving lobbying skills, in which she said that lobbyists should “establish positive relationships with decision-makers before you need their help”. Clients of Low Associates personnel in their previous careers have included the pharmaceutical companies SmithKline Beecham, Unilever and Procter & Gamble.