Secret memo reveals plan to overhaul NHS pay

THE GOVERNMENT is planning the biggest shake-up of the pounds 20bn health service pay system since the NHS was set up 50 years ago, according to an internal memo.

Under the review, hospital consultants could be part of the same salary structure as cleaners. The new system, which ministers and employees' leaders hope to agree by the end of the summer, would aim to end the disparity between the pay of men and women in the service.

Unison, the public sector union, plans to pursue equal pay cases potentially worth hundreds of millions of pounds unless a new framework is introduced.

Meanwhile, this year's pay increase for nurses is expected to involve a rise of about 10 or 11 per cent for newly qualified staff. It is also thought that their pay review body will suggest a rise of just over 3 per cent on basic rates throughout the grades. The award will add about 4.5 per cent to the NHS pay bill.

The award, to be announced within the next few weeks, is expected to fuel expectations among other health service staff who have failed so far to capture the public imagination.

To head off disaffection the Government has made clear its commitment to reform in a memorandum to Professor Clive Booth, chairman of the nurses' pay review body. In a letter dated 14 December, Alan Milburn, then a health minister, disclosed the Government wanted to improve the national framework and replace many different national pay scales.

One possibility is that a single "pay spine" would cover the whole of the NHS from top to bottom. Another is that three review bodies separately covering doctors, nurses and other non-professional grades would decide salaries under an overarching supervisory body.

In the memo to Professor Booth, Mr Milburn said there was a "widespread recognition" of the need for reform and that the present system was "outdated and not sustainable".

Under the existing structure, doctors and nurses have their own separate review bodies, which recommend increases to the Government. Other NHS employees - making up about 40 per cent of the total - rely on negotiations between unions and employer representatives.

Mr Milburn said the present situation constituted a "muddle of local and national pay which is confusing and divisive". He wanted a system that would involve strong national input, but would allow flexibility at local level so that people could be rewarded for extra skills and responsibilities.

The minister acknowledges that the reform package would cost money and that an unacceptably large award this year might limit the Government's room for manoeuvre.