Regional Pay (NHS)

Chris Skidmore Excerpts

Wednesday 7th November 2012 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

It is a pleasure to follow my constituency neighbour, the hon. Member for Bristol East (Kerry McCarthy). I apologise for not attending the earlier Westminster Hall debate secured by the right hon. Member for Exeter (Mr Bradshaw); I will read the Hansard report to see what was said. I want to talk about the background to the debate and the south-west pay, terms and conditions consortium, which affects my constituency. We heard the right hon. Member for Leigh (Andy Burnham) and a few other Opposition Members talk of cartels. It is rather unfortunate that such language has been used, because we want trusts to work together to come up with productive solutions to the problems we face in the NHS.

I have heard from constituents, many of them nurses, who are concerned about what is happening. To be honest, I think that they are concerned because there is a lot of scaremongering and a lot of knowledge has not been put out in the open, partly because the unions that are driving the campaign are refusing to speak to the consortium and engage. We need that engagement from the unions, so I urge them to get around the table.

I wrote to the chief executive of the south-west pay, terms and conditions consortium, Chris Brown, to ask for his reasoning as to why the consortium was formed and why it has put the measures on the table—they are not definite and are there to be discussed by individual trusts. This is about flexibility for individual trusts. As has been discussed, the previous Labour Government provided that flexibility. It will be up to the trusts to decide. We should have faith in local foundation trusts to make the decisions that need to be made.

[Mr Robert Buckland (South Swindon) (Con)]

I am grateful to my hon. Friend for breaking down the language that has been used, because one of the worries my constituents have is that Swindon is right on the edge of the south-west region. The prospect of a wholesale regional pay structure causes them real concern. Is not the issue local pay bargaining and how local trusts run their services to the best of their ability?

--- Later in debate ---

[Chris Skidmore]

The debate is not so much about regional pay because, as my hon. Friend says, there are local considerations to be taken into account; it is about what is the right pay. The right pay is not about lowering pay in poor areas, but about having the right pay in all areas. The right pay is the market rate for an individual, a professional with an individual mix of skills, expertise and experience. One of the problems with the national pay structure is that if trusts want to pay someone more, perhaps an expert, they will be prevented from doing so, which I think is wrong.

[John Pugh (Southport) (LD)]

The hon. Gentleman objected to the use of the word “cartel”. In what sense is it inappropriate in this context?

[Chris Skidmore]

I believe that “cartel” is a rather offensive word to use in this context, because it has connotations that are inappropriate for health care professionals who are doing their best to ensure that the NHS survives in the long term. That is the crux of the debate. Let us look at staffing costs. The Labour Government made a significant investment in the NHS over 13 years. It would be churlish to deny that, but it would also be churlish to deny the fact that a huge proportion of those costs were soaked up in pay.

[Jack Dromey]

The hon. Gentleman has just spoken about paying people the market rate. Sadly, there is a low-wage economy in much of the south-west. That is precisely why regional pay was rejected in the lead-up to “Agenda for Change”. It would lead to the market rate being applied in much of the south-west, driving down pay and conditions of employment. Does he, as a south-west Member of Parliament, support regional pay bargaining for the south-west?

[Chris Skidmore]

What I support is south-west trusts coming together as health care professionals and working out what is best for them in order to survive financially for the future.

I want to read from Chris Brown’s reply to my letter:

“The Consortium was established in response to the serious financial and operational challenges facing the NHS, both now and in the future, and will work to identify ways in which taxpayer funding may be more efficiently used in order to protect both employment and the continued delivery of high quality healthcare.”

There is a significant point in that. I do not want redundancies in the NHS, but if we do not come up with a workable solution for the future, that is what Opposition Members will see, and it will be on their watch if they believe that we should follow the national pay structure. I do not want to see redundancies, and neither do the trusts, which is why they have come together constructively, and they should not be scolded for doing so.

Mr Brown’s letter continued:

“More than two thirds of NHS expenditure is on staffing costs. In recent years NHS organisations have largely exhausted other avenues of potential cost-saving (including reducing reliance on bank or agency staff and implementing service improvement initiatives). Monitor, the independent regulator for NHS Foundation Trusts, has also estimated that NHS organisations with a turnover or around £200m will need to produce savings of around £9m a year for each year until at least 2016/17 to remain in financial health.”

That is why the consortium has been formed. We cannot forget the financial challenge.

[Andy Burnham]

The hon. Gentleman said that the Labour Government gave too much to nurses and midwives in pay—[Interruption.] He said that we spent too much on pay. He also said that the market rate of pay should apply in his area. I want to ask him a direct question. Does he think that his constituents who work in the NHS are overpaid?

[Chris Skidmore]

No, I think that the right hon. Gentleman is misrepresenting what I said. The fact is that we have got to the point—[Interruption.] Nurses, doctors and health care professionals should be paid according to their skills. They should be paid according to what the trusts can afford. The problem we have is that, with an ageing population—

[Andy Burnham]

So they should be paid less?

[Chris Skidmore]

No, they should not be paid less. The right hon. Gentleman should stop splitting hairs. If we want a health care service that is viable for the future, where will the money come from? Perhaps he can answer that. What would he do to be able pay for the future of the NHS, given the demographic challenge we face?

[Andy Burnham]

If the hon. Gentleman gets rid of national pay in the south-west, does he think that the trusts in the consortium, or cartel, should receive a national tariff that factors in a national rate of pay, or should they be paid less for the work they do?

[Chris Skidmore]

What I find so frustrating about this debate is that the right hon. Gentleman has thrown his principles out of the window. He once defended flexibility for foundation trusts, but he now no longer trusts professionals in the way he really should.

[Mr Dorrell]

My hon. Friend asked the shadow spokesman a question as though it was academic, but actually it is not academic. When the right hon. Gentleman was responsible for these things, we know what he thought because it is there on the record. The policy was

“to increase regional and local flexibility in public service pay systems.”

That is what he thought was necessary when he had responsibility.

[Chris Skidmore]

I thank my right hon. Friend for his intervention, which is much appreciated.

The key point is that staffing costs will have to be managed for the future. We cannot get away from that fact. If I am honest in making that point, I am sorry, but we all, regardless of political parties, have to understand the financial pressures the NHS will come under in the decades to come. Staffing costs make up between 70% and 75% of NHS spend. The Nicholson challenge is absolutely vital, and it is not just over four years, as the right hon. Member for Leigh well knows; it will be for ever. We will have to commit to making those efficiency savings so that they can be reinvested in the service if we are to keep the NHS free at the point of delivery. I want an NHS that is free at the point of delivery for my children, yet to be born, and I want it to be there at the end of the century. In order to do that, we need to be responsible about where savings will be made. We are pushing savings at the moment on the outside staffing costs of 20%. The pay freeze has managed to save around £2.5 billion for the Nicholson challenge, as we have heard Mike Farrar from the NHS Confederation explain.

There is a problem, in that the NHS pay freeze will come to an end next year and will have to be renegotiated. Rather than cutting staff numbers, the NHS Confederation is pushing for us to be responsible about what is put into the NHS. That is what we have to consider. We cannot get away from this challenge. It is irresponsible to fly in the face of reorganisation. We need to make savings so that they can be reinvested for the future. That is why it is responsible for the trust and the south-west consortium to take the issue seriously, and it will be up to the individual trusts to decide at the end of the year.

I cannot see any reason why local trusts and health care professionals, who know what is best for their local areas, should not be able to take advantage of the regulations for local flexibilities set out in “Agenda for Change” to ensure that the NHS has the best possible productivity. Let us not forget that the NHS is not free; it is paid for by taxpayers, who deserve the best possible value for money. If the south-west consortium can deliver that, it should be applauded.

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[Alison Seabeck]

The hon. Lady speaks from a wealth of experience of working in the NHS. She is absolutely right on that point, which I will make more of later in my speech.

The public have a right to know what the Government’s position is, but as with so much else, confusion reigns. The Deputy Prime Minister has said at times that he is not in favour of regional pay, but it will be interesting to see how he votes today. The Chancellor of the Exchequer is clearly in favour, but the Prime Minister says nothing. The Secretary of State for Health has not helped to clarify matters today. The amendment, which is in the name of the Chief Secretary to the Treasury, is interesting. It states that the Government will not go down the route of regional pay

“unless there is strong evidence and a rational case for proceeding”.

How will the Government consult and gather the evidence to decide whether there is a rational case for regional pay? When will the Minister make the evidence available to Members of the House?

The Government must understand that the proposal is causing huge concern. The debate is not just about public sector pay restraint. Labour Members have accepted that there needs to be restraint in the public sector. We are not saying that that should not happen in times of austerity, but there is a need for equal pay for equal work. It is wrong if a nurse in Plymouth, working the same hours, doing the same job and providing the same high-quality care, is paid less than her counterpart in a hospital in Peterborough or Preston.

[Chris Skidmore]

Does the hon. Lady therefore disagree with the concept of London weighting, which has been around since the 1920s? There are 44 London MPs in the London area, so I would be interested in her views on London weighting.