NHS pay deal criticised

A new pay system for NHS staff has failed to deliver promised rises in productivity, says the National Audit Office (NAO).

The “Agenda for Change” aimed to introduce a single pay scheme for most NHS staff, alongside schemes boosting staff training and development.

However, the NAO said many trusts had failed to improve training, and there was no evidence of better working.

The NAO went on to say there is also no evidence to back up the Department of Health’s boasts that the reforms would mean savings of £1.3billion over its first five years.

These claims are nothing more than “pie in the sky”, claims Edward Leigh MP, chairman of the Public Accounts Committee.

The NAO reports that 1.1million nurses and junior managers were transferred successfully onto a new, more simple pay system under the modernisation programme between 2005 and 2006.

The introduction of Agenda for Change required the jobs of every member of staff to be reassessed and placed on the appropriate point on the pay scale.

The second half of the project, agreed with unions in 2004, was the “Knowledge and Skills Framework”, intended to use the information gathered to ensure every employee had the chance to receive training and become potentially more productive.

The NAO agrees that, by removing local differences in pay scales and job contracts, the new scheme has made salary negotiations more straightforward and made it easier for staff budgets to be monitored.

But the watchdog says the NHS’s wage bill for staff affected by the changes “is broadly similar to what it might have been if the programme had not been implemented, within a range of 0.6 per cent higher and 0.8 per cent lower”.

This could mean taxpayers spent an extra £166m on health worker staff in 2007-8 despite the new system.

Furthermore, the Knowledge and Skills Framework had not been fully implemented, it said, with the perception among managers that it was “complex and burdensome”.

The Department of Health had expected more than a 1% year-on-year rise in productivity with the arrival of Agenda for Change, adding up to savings of at least £1.3bn over the first five years.

The NAO said that existing measures to check productivity did not show the whole impact of Agenda for Change, but actually showed a fall in productivity of 2.5% a year.

Any productivity changes specific to the programme were hard to work out, the report said, as the Department of Health had not attempted to calculate them.

Tim Burr, head of the National Audit Office, said: “It was no mean feat transferring virtually all NHS staff on to a new pay system within a very constrained timeframe, and this element of Agenda for Change has been a success.

“On the other hand, the benefits that should have come with this new simpler system, such as more effective working, have not been wholly achieved.”

Mr Leigh added: “Not for the first time with such NHS pay reforms, patients might ask what benefits it has brought for them.

“It is not clear whether Agenda for Change has achieved any savings to the taxpayer whatsoever. The department’s prediction that the programme would save £1.3bn is pie in the sky.”