Page last updated at 01:17 GMT, Thursday, 29 January 2009

Watchdog criticises NHS pay deal

Pay rates were simplified for many NHS staff

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

"Agenda for Change" aimed to bring in a single pay scheme for most NHS staff, alongside schemes boosting staff training and development.

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

An MP said government predictions of a 1.3bn saving were "pie in the sky".

It is not clear whether Agenda for Change has achieved any savings to the taxpayer whatsoever
Edward Leigh MP
Chairman, Public Accounts Committee
The introduction of Agenda for Change was a mammoth undertaking, with the jobs of every member of staff reassessed and placed on the appropriate point on the pay scale.

The single biggest group to be included was nursing staff, making up some 40% of the total pay bill.

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.

Staff morale

The NAO said that the new pay scheme, while arguably giving the appearance of fairness across the NHS, had not delivered noticeable improvements in staff morale.

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

It completes an unhappy threesome for NHS pay reforms, following critical reports on the value for money of GP and consultant contracts.

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.

'No savings'

Tim Burr, head of the NAO, 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."

Edward Leigh MP, who chairs the House of Commons Public Accounts Committee, which oversees the work of the NAO, 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."

NHS Employers, which represents those trying to implement the new schemes within the NHS, said that overall it was a "robust pay system".

"We are aware of the issues surrounding the slow implementation of the Knowledge and Skills Framework highlighted in the report and are working with national partners to ensure it is made as straightforward as possible to use."

However, Dr Peter Carter, from the Royal College of Nursing, said that there was evidence of increased productivity.

"It is no coincidence that more and more Trusts have been rated excellent or good by the Healthcare Commission in recent years or that the 18-week target has been achieved way ahead of schedule."

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