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The Unpolitical Nurse’s Guide to why the Government is trying to cut your pay

October 8, 2013

Last weekend, Jeremy Hunt, Secretary of State for Health, stunned and angered health workers when he said he would be urging the two NHS Pay Review Bodies to scrap the already-agreed 1% pay rise for NHS staff in 2014. Why did he do this? Well, as far as the timing was concerned, it looks as if he thought he might not survive the Cabinet reshuffle that went ahead the following Monday, and (rather touchingly?) didn’t want to dump the responsibility for an unpopular announcement onto his successor; in the event, he stayed put. As for his reasoning – it’s complicated, and inextricably tied up with the Health and Social Care Act. For those of you who haven’t got a clue what I’m on about, perhaps I’d better explain…

Why did the government want to bring in changes to the Health Service?
OK, so here’s the dilemma: the Conservative Party –  the senior partner in the current Coalition government – is traditionally on the side of business; so much so in fact, that donations from businesses have always formed a significant part of its income. In return for its generosity, the business world expects something back – like opening up the NHS for money-making opportunities. On the other hand, any political party that attempts, or even looks as if it might be thinking about attempting the ‘privatisation’ of our much-loved NHS is onto a sure-fire vote-loser. So what’s the solution? Answer: bring in the Health and Social Care Act – oh yeah, and don’t tell anyone about your intentions before you get to work on them: these plans did not appear in either of the Coalition Parties’ manifestos before the 2010 General Election.

What is the Health and Social Care Act?
The Health and Social Care Act 2012 (which, confusingly, came into force in April this year – it’s called the 2012 Act because it was given Royal Assent last year) has been called ‘the biggest revolution in the NHS since its foundation’. The government will tell you that the changes it has enshrined in law are prompted by warm, cuddly motives like the need to offer more patient choice (although no one knows whether NHS users really want more choice; business certainly wants it) and get better value for taxpayers’ money by driving down costs. In some cases, these benefits may actually become a reality – but the truth is that the overriding objective is an ideological one: helping business make money. Whether this is good for all of us because a strong economy benefits everyone, or only good for some of us because under a market economy there are always winners and losers – is something you must decide for yourself. Your vote (at the 2015 General Election) is your verdict.

Why is the Health and Social Care Act so significant?
Well, not because it represents the first time private companies have been invited into the NHS. Even under the last Labour government, private companies were contracted to build new hospitals under Private Finance Initiative (PFI) agreements. In return, they got the the right to run non-clinical services inside the hospitals they built – that’s why the cleaners, porters and maintenance personnel at your hospital quite possibly don’t work for the NHS. The government said it couldn’t embark on a building programme of new hospitals unless it used private capital because the public purse couldn’t afford to pay for it (although, curiously, it could afford to pay for a war in Iraq – but that’s another story). But if your local hospital is saddled with humongous debts – it might be because of PFI. No, the reason the Health and Social Care Act is so significant is that for the first time, private companies have been given the right (some would say the obligation) in law to supply clinical services to NHS patients.

So does this mean patients will be charged for health care, or have to take out insurance?
It’s more subtle than that. Under the terms of the Act, new bodies called Clinical Commissioning Groups (CCGs) will become the engines of the NHS. CCGs are already up and running – there are a little over 200 of them. They are composed mostly of GPs and their role is to commission and purchase health services – everything from emergency and urgent care to mental health and learning disability services – for their local populations . The big break with the past is that these services can be supplied by ‘Any Qualified Provider’ (AQP). In order to secure contracts, NHS providers will increasingly find themselves in competition with private companies (and possibly charities and other not-for-profit organisations). At the moment (apart from stuff like prescriptions that is already subject to charges) there are no plans to make anyone pay for clinical services provided by the NHS or by organisations under contract to the NHS – but then again, there were no plans to introduce the Health and Social Care Act when the Conservatives fought the last election.

Will these changes benefit patients?
Some people think so. Certainly, parts of the NHS are mind-numbingly bureaucratic and could do with a good shake-up (a point recently made by the inimitable Roy Lilley in a hilarious blog post – link below). Proponents of the changes argue that they will make services more patient-focussed, more responsive to local needs and (of course) more cost-effective. BUT the list of objections and possible problems is HUGE, ranging from the creation of a post-code lottery of services (because different localities will have different priorities, and their commissioning will reflect this) and fragmentation of health care to questions about the morality of embarking on lavish politically-motivated service-reconfiguration in a period  of economic austerity. There are also worries that private companies will ‘cherry pick’ the most profitable services, leaving the NHS with a rump of unglamorous specialities like dementia services (although others argue this would be good for the NHS – freeing it up to refocus itself on previously ‘Cinderella’ areas). Additional fears have been voiced over possible conflicts of interest among members of CCGs – it’s not unknown for GPs to have nice little sidelines running companies which provide, for example, out of hours medical cover. And these companies might be competing for contracts. To sum up: it’s a big experiment and nobody really knows what the effects will be.

What does any of this have to do with my pay?
It has everything to do with your pay. When Mr Hunt announced that he would be urging the NHS’s two independent Pay Review Bodies to cancel next year’s planned 1% NHS pay rise, he also (and this is really significant) ‘further alienated health unions by trying to end the long-established tradition in the NHS whereby many staff receive small increases each year, in addition to any pay rise, by moving up grades within their pay band’ (The Guardian, 04-10-13). You want to know why is this so significant? Well, think about it. Annual increments, (and automatic across-the-board annual pay rises) though a commonplace in the NHS, are very uncommon in the private sector. What Hunt is trying to do is create a level playing field in the area of Health Services pay, so that if services are contracted out to non-NHS providers, those providers are not lumbered with (what they and Hunt would view as) an old-fashioned, unwieldy and un-incentivising pay structure which the new boys then have to spend years re-negotiating. So…all that guff about David Cameron wanting to reward nurses on the basis of lovely fluffy stuff like how compassionate they are? Get real! The push for performance-related pay (which is much more common in the private sector) is a cold, hard, business case. It’s about the Tory Party rewarding its friends. It’s about the Tory Party buying itself enough funds to win the next election outright. That’s what your pay award is being sacrificed to.

Is there more of this to come?

Undoubtedly. Next in the firing-line will be unsocial hours payments, which private contractors will want to dump for all the reasons stated above. The conduit for this will be 24/7 care. Staff will be told that hospitals won’t be able to provide this service (and patients will consequently suffer) unless the unsocial hours aspect of pay is re-negotiated. Think the government wouldn’t stoop to blackmail? Sorry, but they’re already doing it: half of the extra £250 million the government has promised to spend on A&E departments in the next two years will only be shared amongst trusts who achieve a 75% flu jab uptake amongst their staff.
So in conclusion…?
If you’re asking me whether the Health and Social Care Act will improve health care, the answer is that the jury is still out – it’s too early to say. But if you think that politics doesn’t affect you – well, you’re wrong.

For Roy Lilley on the NHS vs Specsavers, see:

I recommend that you read my post in conjunction with Mark Boothroyd’s very informative blog at:

And…If you’re still hungry for more about the background to the Health and Social Care Act, I would suggest (apart from copious web-based information, which, if you’ve got this far, you’re more than capable of looking for yourself):

NHS SOS: How the NHS was betrayed and how we can save it by Jackie Davis and Raymond Tallis (Oneworld; 2013) – for a leftwing-orientated view; or, if you prefer,

God Bless the NHS: the truth behind the current crisis by Roger Taylor (Guardian books/Faber and Faber 2013) will give you a more centre-right approach.

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