Unite evidence to the NHSPRB - September 2013
Unite evidence to the National Health Service Pay Review Body (NHSPRB), September 2013
1. Executive Summary
· The PRB process has become devalued by the Government’s pay policy.
· Continuing pay caps at “an average of 1%” until at least 2015/16 are a cumulative real terms loss of earning of around 15%. This has meant many NHS staff are now reliant on food banks and tax credits.
· The PRB should assert its independence from the Government by challenging the 1% pay cap.
· Unite research shows the terrible consequences of Government policy on NHS services and staff:
a) Morale is at an all time low and there is a consequence for staff wellbeing
b) Many staff are facing substantial cuts to terms and conditions
c) Services are being cut back and are at risk
· The PRB should conduct urgent research into changes to on-call, sickness benefits, RRPs, down-banding and overtime, as well as the potential impacts of performance related progression in England.
· Percentage increases favour the most well off who are best able to cope with the increases in living costs. Unite continues to support a linear pay rise being implemented, with more done to address low pay through a bottom loaded flat money sum to break this escalating inequality.
· Unite want to see a review of the structure of AfC, relating to the size and spacing of incremental pay points.
· Unite is calling for the PRB to investigate equality issues across the NHS pay structures.
2. Introduction
2.1 This evidence is submitted by Unite the Union - the country’s largest trade union. The union’s members work in a range of industries including manufacturing, transport, financial services, print, media, construction and not-for-profit sectors, local government, education and health services.
2.2 Unite is the third largest trade union in the National Health Service and represents approximately 100,000 health sector workers. This includes seven professional associations – the Community Practitioners and Health Visitors’ Association (CPHVA), Guild of Healthcare Pharmacists (GHP), Medical Practitioners Union (MPU), Society of Sexual Health Advisors (SSHA), Hospital Physicists Association (HPA), College of Health Care Chaplains (CHCC) and the Mental Health Nurses Association (MNHA) – and members in occupations such as allied health professions, healthcare science, applied psychology, counselling and psychotherapy, dental professions, audiology, optometry, building trades, estates, craft and maintenance, administration, ICT, support services and ambulance services.
2.3 As well as submitting this written evidence Unite has participated in the Joint Staff Side Trade Union evidence to the NHSPRB. This year the Joint Trade Union evidence includes a report by the Work Foundation on Ten Years of Agenda for Change. This shows the continuing success and relevance of the Agenda for Change Agreement and the potential to better use the flexibilities built into it. Unite fully endorses this position.
2.4 In addition as staff side has not commissioned IDS to conduct a survey this year, Unite has run its own bespoke survey based on similar questions. Throughout this submission Unite tries to highlight particular groups of members that have specific concerns. In general, however, all the comments below apply across our membership, which covers a broad range of roles that are vital to the NHS being able to function effectively to deliver high quality patient care.
3. PRB independence and public sector pay policy
3.1. Unite and the other trade unions have strongly supported the role of the NHSPRB as an independent body. Unfortunately it has become increasingly clear that that independence has been all but removed by Government pay policy announcements restraining it to fully reflect the impact of market conditions.
3.2. The Chancellor’s 2013 Budget confirmed that the unilaterally announced two year pay cap “at an average of 1%” for all NHS employees would now be extended as far forward as 2015-16[1]. This is yet another real terms pay cut for NHS workers, is dragging NHS pay below private sector pay rates, sucking demand out of the economy and leading to the scandal of some NHS workers earning poverty wages.
3.3. Unite reiterates its belief that NHS pay policy should be evidenced by research carried out by pay experts and not politicised. Unite is increasingly convinced that the PRB process has been fatally undermined by Government meddling, and its failure to meaningfully challenge the confines put on it by Government. Unite members in the NHS feel that they have lost any genuine forum for discussion of fair pay awards due to Government imposition based on policy rather than reflecting the true economic conditions and this is enormously destructive to morale, staff engagement and service outcomes.
3.4. Unite again calls for the PRB to reassert its independence and make clear recommendations against the Government’s arbitrary pay policy, highlighting concerns about how pay is being set, the extent of pay and terms cuts across the NHS and the impact of this on staff morale and service users. Unite and other staff side unions would throw their full weight behind defending the PRB if it took such a stance.
4. NHS staff loss of earnings
4.1 Preparing this submission creates a distinct sense of déjà vu. Government policy continues to be devastating NHS staff pay rates, with a further two years of below inflation pay caps forecast, NHS staff are being unfairly penalised for the economic woes of the country.
4.2 As the UK’s largest employer, NHS pay rates play a major role in setting UK pay trends overall. Unite is a general union that covers workers in most sectors of the economy, public, private and not for profit. Unite believes that all workers should receive a fair pay rise no matter what sector they work in. All of those working in the NHS should be protected from a fall in living standards and receive a fair pay increase.
4.3 The imposition of a third year of pay cap following two years of frozen pay on NHS and other public sector workers is a pay cut in real terms. As can be seen from Figure 1 below the rate of inflation is projected to be consistently above 1% - the amount that the Government wishes most NHS workers to receive. This is true for both the RPI and CPI.
4.4 Mapped against Agenda for Change it can be seen that NHS staff have not had a real-terms pay increase since 2006, with the exception of 8 months when RPI was negative. It appears that there will be a repeat of the period during the 1990s when public sector pay fell below private sector pay between 1993 and 1999. Figure 2, illustrates NHS pay against RPI since April 2005, giving a projection going forward and Figure 3 shows the sizable loss of purchasing power experienced by NHS staff, just due to inflation. This means that by 2014 Agenda for Change staff will have lost between 12.4%-15.5% of their purchasing power based on their 2010 pay rates (see figure 3). The effects of that loss of purchasing power, particularly on the lower grades, should not be underestimated.
Figure 1: Projected RPI over the next year (rounded average*)
Retail and consumer price inflation forecasts at September 2013 (Source: IDS) // All-items Retail Prices Index / Consumer Prices Index /
Minimum
% / Average
% / Maximum
% / Minimum
% / Average
% / Maximum
% /
August (2013) / 2.9 / 3.1 / 3.2 / 2.6 / 2.6 / 2.8
September / 2.7 / 3.0 / 3.1 / 2.3 / 2.5 / 2.6
October / 2.5 / 2.8 / 3.0 / 2.1 / 2.3 / 2.5
November / 2.4 / 2.9 / 3.2 / 2.0 / 2.2 / 2.5
December / 2.5 / 2.9 / 3.3 / 1.9 / 2.2 / 2.4
January (2014) / 2.5 / 2.9 / 3.4 / 2.0 / 2.2 / 2.3
February / 2.2 / 2.8 / 3.4 / 1.8 / 2.0 / 2.2
March / 2.0 / 2.7 / 3.5 / 1.6 / 1.9 / 2.1
April / 2.2 / 3.0 / 3.6 / 1.8 / 2.1 / 2.4
May / 2.2 / 3.1 / 3.6 / 1.8 / 2.2 / 2.5
June / 2.3 / 3.2 / 3.7 / 1.9 / 2.3 / 2.7
July / 2.3 / 3.1 / 3.7 / 1.9 / 2.2 / 2.6
August / 2.2 / 3.1 / 3.7 / 1.7 / 2.2 / 2.6
September / 2.2 / 3.0 / 3.6 / 1.7 / 2.2 / 2.7
October / 2.1 / 3.0 / 3.6 / 1.7 / 2.2 / 2.5
November / 2.1 / 3.0 / 3.5 / 1.7 / 2.1 / 2.5
December / 2.1 / 3.0 / 3.5 / 1.7 / 2.1 / 2.5
Forecasters: Commerzbank; Capital Economics; Citigroup; Credit Suisse; Lloyds Bank Commercial Banking; Morgan Stanley; Nomura; RBS
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Unite evidence to the NHSPRB - September 2013
Figure 2: NHS pay versus RPI since April 2005, giving a projection from August 2013
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Unite evidence to the NHSPRB - September 2013
Figure 3: Loss of purchasing power £s over the three years to 2014
Examples of workers / 2010 Pay Spine point / wage £ / 2011 Pay Spine point / wage £ / 2012 Pay spine point / wage £ / 2013 pay spine / wage £ / Projected 2014 pay spine / wage £ / 2010 Difference between average RPI and wage increase % / 2011 Difference between average RPI and wage increase % / 2012 Difference between average RPI and wage increase % / 2013 Difference between average projected RPI and wage increase % / 2014 Difference between average projected RPI and wage increase % / Sum of loss of purchasing power (£) since 2010 / Percentage loss of purchasing power since 2010 pay (%)Top of Band 1 / 14364 / 14614 / 14864 / 15012 / 15162 / -2.4 / -3.5 / -1.9 / -2.2 / -2.1 / 1774.1 / 12.4
Top of Band 2 / 16753 / 17003 / 17253 / 17425 / 17599 / -2.4 / -3.7 / -2.2 / -2.2 / -2.1 / 2144.7 / 12.8
Top of Band 3 / Estates and Maintenance / 18577 / 18827 / 19077 / 19268 / 19461 / -2.4 / -3.9 / -2.3 / -2.2 / -2.1 / 2424.9 / 13.1
Top of Band 4 / 21798 / 21798 / 21798 / 22015 / 22235 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 3370.6 / 15.5
Top of Band 5 / Nurse / 27534 / 27625 / 27625 / 27901 / 28180 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 4269.6 / 15.5
Top of Band 6 / Trainee Pharmacist / 34189 / 34189 / 34189 / 34530 / 34875 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 5286.7 / 15.5
Top of Band 7 / Health Visitor / 40157 / 40157 / 40157 / 40558 / 40964 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 6209.5 / 15.5
Top of Band 8a / 46621 / 46621 / 46621 / 47088 / 47559 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 7209.1 / 15.5
Top of Band 8b / 55945 / 55945 / 55945 / 56504 / 57069 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 8650.9 / 15.5
Top of Band 8c / 67134 / 67134 / 67134 / 67805 / 68483 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 10381.1 / 15.5
Top of Band 8d / 80810 / 80810 / 80810 / 81618 / 82434 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 12495.8 / 15.5
Top of Band 9 / 97478 / 97478 / 97478 / 98452 / 99437 / -2.4 / -5.2 / -3.6 / -2.2 / -2.1 / 15073.2 / 15.5
Note: 2013 -14 inflation is an average of the projected quarterly inflation given in IDS Pay Report 1117 October 2013
Methodology - difference between RPI and wage growth is X. Income then reduced by X.
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Unite evidence to the NHSPRB - September 2013
5 Pay rises across the economy
5.1 Pay specialists IDS continue to show that other sectors of the economy have enjoyed much higher pay rises at an average of 2.5% throughout 2013[2]. Pay settlement levels overall have remained relatively stable throughout 2013, staying below inflation as the economy makes a cautious recovery; however significantly higher than the recommendation of the Chancellor for NHS pay.
Figure 4: Pay settlement data – three months to end of August 2013 /Whole economy /
Median / 2.5%
Average / 2.2%
Weighted average (by employee nos) / 2.1%
Interquartile range / 2.0 to 3.0%
Median by sector
Private sector / 2.2%
Manufacturing & production / 2.5%
Private services / 2.0%
Based on 48 settlements covering 613,782 employees
Source: IDSPay.co.uk
5.2 Across the whole economy, the picture on pay settlements has remained relatively stable during the course of 2013 and the median pay award remains at 2.5 per cent in the three months to August. There are, however, a greater number of awards between 3 and 3.99 per cent in higher skilled sectors such as aerospace and defence and finance sectors and at chemical manufacturers. Meanwhile even in lower skilled sectors such as construction, retail and wholesale, pay rises are around 2 per cent. Some three-fifths (60 per cent) of pay awards in the manufacturing sector are at or above 3 per cent.
5.3 Looking at pay awards set in 2013 as a whole, the median for the manufacturing sector is 2.5 per cent; across private services it is also 2.5 per cent; and even the struggling not-for-profit sector has had an average rise of 2 per cent.
Figure 5: Distribution of pay settlements, June-Aug 2013
5.4 Figure 6 shows the median and inter-quartile ranges of increases in each rolling three-month period over the past 18 months.