Press Release - NHS Pay Modernisation in England: Agenda for
Change
29 January 2009
According to a National Audit Office report, the NHS has
successfully transferred 1.1 million NHS employees on to a new
simplified pay system. Given the scale of the NHS this was a
substantial task which the NHS, in partnership with the trade
unions, achieved in a short timescale. There are some examples of
NHS trusts using Agenda for Change to help introduce new roles. But
the Department of Health did not put enough emphasis on getting
trusts to develop these new ways of working to secure the full
benefits from the new pay system, so the programme is not yet
achieving the intended value for money.
Agenda for Change has reduced pay administration in the NHS. The
single pay system has also simplified pay negotiations and made it
easier to estimate staff costs and monitor budgets. The NAO
estimates that for 2007-08 the £28 billion NHS paybill is broadly
similar to what it might have been if the programme had not been
implemented, within a range of 0.6 per cent higher and 0.8 per cent
lower.
The Department predicted that Agenda for Change would save at least
£1.3 billion by 2008-09 and productivity would increase. It did
not, however, put in place any central monitoring arrangements to
show what impact the new contract has had on productivity. The only
productivity measure available for the NHS as a whole shows that
productivity continued to fall when Agenda for Change was
introduced though the rate has since slowed.
A key element of Agenda for Change, the Knowledge and Skills
Framework, which defines the skills needed for a certain role and
provides a tool for reviewing their use in the workplace, has not
yet been fully implemented by many trusts. Effective use of the
Framework is fundamental to achieving the full benefits of Agenda
for Change, but initial take-up was limited and the Framework had
to be relaunched in 2007.
Tim Burr, head of the National Audit Office, said today:
"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. So the programme as a whole has further to go
before it achieves the intended value for money for the
taxpayer."
Notes for Editors:
- Agenda for Change, introduced for all NHS staff other than
doctors and senior management between December 2004 and December
2006, aimed to reform the pay system with new simplified pay scales
and encourage different, more effective working practices.
- The Knowledge and Skills Framework was designed to give staff
information about the expertise they need to fulfill their roles
and develop their careers.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Tim Burr, is the head of
the National Audit Office which employs some 850 staff. He and the
NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 03/09
All enquiries to Sarah Farndale,
NAO Press Office: Tel: 020 7798 5350
Mobile: 07985 274 421