Overhaul needed to restore trust in pay review process

It has produced a series of recommendations aimed at ensuring the pay review decision making is ‘fit for purpose’ and warned that trust is rapidly draining from the process with the possibility that the outcome of the present strike would be ‘bad for staff, bad for patients, bad for NHS employers and bad for government’.

Senior fellow Billy Palmer (pictured) pointed out last year the two pay review bodies’ recommendations came 110 days after pay rises should have taken effect and, even though rises were backdated, at a time of high inflation this delay could cause cost-of-living challenges for staff.

He called for recommendations – and the government’s response – to be published before the start of the financial year, but with provision for reviewing pay deals, especially multi-year ones, if there are unanticipated changes such as a rise in inflation. This could help with longer term pay deals.

And while affordability of pay rises has been a key plank of the government’s refusal to revisit the 2022/23 pay rise, he pointed out that paying staff more needs to be seen in the round rather than just in terms of departmental budgets. Much of the money spent on pay rises would be paid to the Treasury as tax, national insurance and student loan repayments. If it improved recruitment and retention, this would also offer savings.

The pay review bodies should also be explicit if the ‘affordability envelope’ stops them from recommending a pay deal that would support a workforce to meet expected staffing and minimum service levels.

There also needs to be agreement from all parties on using appropriate measures of inflation and baseline years when looking at real-term pay trends.

He also called for more focus on ‘fair pay’ between professions, the impact of pay deals on pay inequalities between staff with different characteristics, a review of how pay supports staff in high cost areas both inside and outside London, and for a study on how the pay framework can be better used to allow greater and fair pay progression.

But the pay review bodies also need funding for research into the impact of pay on domestic and international recruitment, retention and participation. And he urged government, employers and unions to review the current structure and resources of the pay review bodies.  

He concluded that – as well as pay – the NHS needs to provide attractive roles for people to work in or ‘continue to spiral deeper into crisis’.