By just how much is the SW pay cartel planning to cut NHS staff pay?

I wrote recently about the Parliamentary debate on 16 July this year, during which the then-Health Secretary Andrew Lansley said that the government did not feel that pay cuts were either “necessary or desirable in achieving the efficiency challenge,“ as well as about the massive 28 pay-related measures the South-West NHS Pay, Terms & Conditions Consortium (from here on SWC or ‘the cartel’) is considering in order to meet its aims of cutting costs. It is of course indisputable that this government lies without conscience, and that its statements about NHS pay are a clear example.

While the government’s official position (in private it knows full well what is intended and Dept of Health ministers approved the plans) is that pay cuts are ‘neither necessary nor desirable‘ and that it simply wants ‘flexibility’, the cartel (which inadvertently admitted it’s a cartel recently) is planning cuts which are anything but vague.

The 28 measures themselves are onerous and shocking enough. But in some of the 150 files of emails released to me by a minority of the cartel’s member Trusts, the report is repeated several times, and in the process of re-reading it, it occurred to me that while the measures themselves have received some publicity, I haven’t seen an analysis of the cartel’s firm figures in terms of expenditure and planned savings, and what they mean in terms of actual impact on the incomes of hard-working health staff.

Figures have been mentioned from 5% to 15%, while the report itself (which the cartel calls a ‘guidance document’ and published on the 22nd of last month) mentions cuts of 20-25% for ‘easily replaceable’ staff and discusses other pay reductions without quantifying them. But the report also puts a cash value on the savings which, while framed less obviously, give a firm, easily calculated, and deeply frightening cash figure for the impact on NHS workers’ income.

The cartel’s report describes a ‘sample’ (typical) Trust based on the composite characteristics of the Trusts that are members of the cartel. This typical Trust employs 3,500 people and has a total budget of £200 million – of which labour costs make up 65%. The idea of the sample Trust is that the effects of any pay measures on it typify what the impact will be across the 20 member Trusts.

The report says that, in order to meet the government’s targets for spending cuts, this sample Trust needs to reduce its’ budget by £9 million per year for 3 years. This figure is based on the government’s target budget reduction per year of just under 5% across both clinical and non-clinical areas. But while the guidance report says the Trust needs to make that saving for the next 3 years, in fact (as the report itself notes in a different section) the government has targeted the same level of reduction (with very small variations) every year for the next 5 financial years up to 2015/16.

The briefing notes that the cartel issued to Trust executives on the same day state that “65% of [the savings] will need to come from workforce efficiencies and improved productivity” – the same percentage that the wage bill represents as a portion of the total NHS budget.

The briefing notes go on to say that, while about 1/3 of the saving can be achieved via “traditional methods (e.g. skill-mix changes, back-office rationalisations)“, that leaves “a gap of around £5 million each year” for the 3 years of reduction – except that the reality, as we know, is that the same savings are expected every year for (at least) the next 5 years, not 3.

The report estimates that the national Agenda for Change negotiations already in progress might achieve around £700,000 of the necessary £5 million. So we now have all the elements we need for our calculations.

Throughout the report, and in its press releases, the cartel repeatedly insists that no decisions – nor even any firm proposals – have been made, as a way of deflecting questions from unions and others. (In its FAQs, in answer to the question whether pay-cuts of 15% are intended, it answers “The Consortium has not put forward any proposals at all, therefore statements of this kind are not true” – this is utterly disingenuous, designed to mislead questioners.

However, in the above elements, we now have everything we need to work out exactly what the Trusts firmly intend to do – the only uncertainty is the exactly what combination of measures they’ll use to reach their goal.

It’s simple mathematics. Here’s how it goes:

Savings to be achieved by a typical Trust:     £5,000,000
Minus AfC savings contribution:                            700,000

Equals:                                                                 £4,300,000

Number of staff in the typical Trust:                           3,500

Divide £4.3 million by 3,500 and we see exactly what the cartel and its member Trusts intend:

An average reduction, per employee, of £1,228.57 per year.

Every year, for the next 5.

Strip all the bullshit and equivocation and it’s clear and simple: by 2016, the South West NHS Pay, Terms and Conditions cartel intends to reduce the average income of its employees by over £6,142 compared to current levels.

Of course, the impact won’t be spread evenly. Some will lose more than this, and some less. But on average, that’s the figure. What isn’t decided yet is how much of this will be in actual cash reductions, and how much by forcing staff to work longer for no extra pay (via reduced holiday entitlements, a longer working week etc); and of the cash element, how much will be in salary reduction and how much via reduced antisocial hours payments, ‘knowledge and skills framework’ etc. But one way or another, the impact is still there.

But the paper goes further, and adds insult to injury. Several times in the released documents, as well as in press releases, the cartel attempts to frame its plans as being for the sake of job security for NHS staff, saying that “over 6000 NHS jobs could be safeguarded” (note the phrasing, ‘could be’ – it’s not accidental).

The document goes on to say that the increased ‘productivity’ the measures will obtain from each employee mean that fewer staff will be needed – so while the papers repeatedly state that the measures are necessary to save NHS jobs, the ‘reward’ to staff for the loss of, on average, around 23% of each income and the imposition of longer work hours and fewer holidays will be… job losses.

I’m far from finished working my way through the documentation yet, but what I’ve found so far is already damning and terrifying. We all need to work together, whether we’re based in the South-West or not, to fight these measures, because if the South-West cartel succeeds in its aims and measures, what I’m describing above represents the future for every NHS worker in at least England and Wales.

Let’s man the barricades.

2 responses to “By just how much is the SW pay cartel planning to cut NHS staff pay?

  1. Pingback: Dear Jeremy, thanks for your promise on NHS regional pay | skwalker1964·

  2. Pingback: SW NHS execs treat staff paycuts as a joke while taking pay rise & bonus | skwalker1964·

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