1 NHS employers '. SUBMISSION TO THE. NHS PAY REVIEW BODY. 2017/18. September 2016. Contents Key messages 3-7. Section 1 Informing our evidence 8 - 27. Section 2 Modernising Agenda for Change 28 - 37. Section 3 Workforce supply 38 - 48. Section 4 Staff engagement and the NHS Staff Survey 49 - 51. Section 5 Pensions and total reward 52 - 61. Section 6 Staff numbers and pay bill 62 - 69. Annex A Results from NHS Provider/NHS employers 70 - 74. workforce survey Annex B Expected basic pay per FTE increase in 75. 2016/17 through increments by AfC Band Annex B1 Expected basic pay per FTE increase in 76 - 77. 2016/17 through increments by staff group Annex C Proportion of staff receiving recruitment and 78 - 79.
2 Retention previa (RRP) by staff group and AfC Band April 2016. Annex C1 Proportion of staff receiving recruitment and 80 - 81. retention previa (RRP) by staff group and LETB region April 2016. Annex D Paybill metrics for Total HCHS non-medical 82 - 84. staff Annex E Percentage of AfC staff on top of their brands 85 - 87. 2. Annex F Time series of non-medical staff by staff 88 - 90. group Annex G1 Non-medical staff by staff group and AfC 91. group and AfC band, September 2015. Annex G2 Non-medical staff by region and AfC band, 92. September 2015. Annex H Time series of mean basic pay by staff group 93 - 94. Annex H1 Time series of mean total earnings by staff 95 - 96.
3 Group Annex I Advertised vacancies by staff group 97 - 98. Annex I1 Advertised vacancies by region 99 - 100. Annex J Increments and positions within band 101 -104. Annex K Cost impact of the National Living Wage on 105 - 106. the NHS paybill 3. Key messages Financial challenge The NHS continues to face unprecedented financial and service challenges. The majority of trusts fell into deficit during 2015/16 and the overall shortfall has now reached over billion1, the highest level seen. The financial settlement for the NHS up to 2020 is extremely challenging, with employers set ambitious targets to deliver efficiency savings.
4 At the same time, demand for services continues to rise. Performance indicators show the service is under great pressure as demands for care increase and other public services reduce provision. Concerns about NHS finances link through to pay decisions for NHS staff. Pay makes up more than two thirds of the budgets for most hospital costs. Changes in staff costs, above those already planned for, will have a significant impact on the financial viability and sustainability of NHS. financial plans. Continuing to contain pay costs remains an integral part of addressing this financial challenge. This financial position sets a key context for this year's evidence.
5 Transformation challenge A different approach is required to deliver a health and social care system that is capable of meeting the scale of the financial and sustainability challenge. National policy has identified the significant and necessary changes required to: shift care from hospitals to the community; introduce new models of care that support the integration of health and social care; and support a focus on preventing illness and promoting health and wellbeing. Sustainability and transformation planning (STP) is helping to bridge the gap between health and social care, with 44 STP footprints charged with 1 Kings Fund (July 2016) Deficits in the NHS 2016.
6 4. delivering plans that deliver transformation of the services provided to local communities. It is expected that these transformation plans will improve outcomes for people accessing services, support greater efficiency and effectiveness in service delivery and deliver cost savings. Integrating care across organisations and sectors will lead to considerations around the current and future workforce. Opportunities to restructure and create new roles to meet changing needs will need to be taken to support system integration. This requires a new and integrated workforce plan to be created (across boundaries). Workforce challenge How the NHS plans, trains, regulates, supports, deploys and rewards its staff will be critical to the delivery of the triple aim identified in the Forward View.
7 The results of getting workforce planning wrong are potentially very significant and will create further system instability in an already pressurised environment. Financial pressures will not be effectively and efficiently managed (including those linked to staff shortages, which historically have translated to higher costs through increases in agency spend). Senior policy makers from across the health system have recognised that a new approach is required to meet the scale of the challenge presented both now and in the future with regards to workforce. employers welcome the development of a national workforce strategy set against the 5 Year Forward View (5 YFV)2 and the creation of clear plans for service delivery.
8 They will be looking for national actions which enable greater innovation in ways of working, as well as enhance the broader reward and employment package for NHS staff. 2 NHS England (October 2014) Five Year Forward Plan 5. Pay and contract reform NHS employers continues to aim for and seek out opportunities to reform the Agenda for Change (AfC) pay and conditions. Although some changes were agreed in 2013, the pay system has not undergone systematic review since it was introduced in 2004. It remains the view of employers that the pay system needs to change to support the NHS to deliver the priorities set out in the 5 YFV, address the quality and efficiency challenges linked to the work on delivering care across seven-days, meet the changing needs of patients and integrate new models of care.
9 employers are looking where possible for a balanced package of reforms. Reforms to the pay structure and other terms and conditions would contribute to and support system wide initiatives, increase capacity and reduce the costs of agency staffing, but without creating new and additional cost pressures. Constructive national discussions with NHS trade unions on pay reform are ongoing, but progress has been slower than It is unclear whether, within the constraints of both government public sector pay policy and the current system financial pressures, agreement around a balanced package of reforms can be reached within this spending review period.
10 A reform agreement will not be possible for implementation during 2017/18; therefore any pay award for 2017/18 will be set against current government public sector pay policy. Pay award 2017/18. The pay review for 2017/18 will be subject to the government's public sector pay policy set out in the 2015 Budget, that increases across the public sector will be constrained to an average of 1 per cent until 2020/21. In the absence of an agreement on pay reform, there is consensus amongst employers in favour of the same percentage increase for all AfC. staff within the 1 per cent cap. Any pay uplift that is not fully funded through the tariff would create additional financial pressure for employers .