Deal at last on Agenda for Change

6 Oct 05
The protracted dispute over the refusal by private firms to offer the Agenda for Change pay deal to employees working in the NHS will finally be resolved this week after the government agreed to fund its extension.

07 October 2005

The protracted dispute over the refusal by private firms to offer the Agenda for Change pay deal to employees working in the NHS will finally be resolved this week after the government agreed to fund its extension.

As Public Finance went to press, the finishing touches were still being put on the agreement, which was due to be announced by Health Secretary Patricia Hewitt on October 6. But PF was able to obtain an outline of the deal.

AfC was introduced across the health service at the end of 2004 and has resulted in double-digit pay rises for many of its lowest-paid staff, and unions have been agitating for it to be extended to those working for private firms.

Under the agreement, these staff will now receive phased pay rises over the next 12 months to bring their terms and conditions broadly into line with those for NHS employees.

A worker currently on the national minimum wage of £5.05 per hour will, with immediate effect, see their hourly rate increase to £5.65. A further increase to £5.88 will take effect from April 2006.

From October 2006, contractors have an existing obligation to give their staff terms and conditions that are no less favourable than those enjoyed by NHS employees.

The costs of this month's pay rise will be split between the government and the private firms, but contractors will not contribute to the cost of next year's increase. The deal is expected to cost around £100m in total.

Norman Rose, director of the Business Services Association, which counts many NHS contractors among its members, said the agreement was a fair resolution to the dispute and once confirmed would benefit all parties.

'This deal will give us the support we need to provide good-quality and effective services. We now have a way forward which means we won't have to cut costs in order to fund the pay rises,' he added.

The agreement brings to a close an increasingly bitter dispute centring on the pay and conditions of 100,000 support staff, such as cleaners and porters, who work in hospitals but provide services that have been contracted out.

The public services trade unions – Unison, the GMB and T&G – have long argued it was discriminatory that they were missing out on the rises being given to the lowest-paid NHS staff.

But private contractors, represented by the CBI, have always maintained that their contracts with the health service made these rates of pay unaffordable without additional government funds.

The DoH convened a top-level working party, bringing together the unions, business leaders and NHS managers, before May's general election to find a solution amid threats of industrial action at several NHS trusts. The main points of the deal were finally nailed down at a meeting of the working party on October 4.

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