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An acceptable pay settlement for NHS staff next year should be achievable, despite the fact that an increase will probably be only around 2%, the health secretary has said.
Alan Johnson told MPs last week he was optimistic about the current “difficult” pay discussions taking place.
Mr Johnson was giving evidence as part of the parliamentary health select committee’s inquiry into public expenditure.
The committee tackled him on the government’s recent call for a 2% pay rise in 2008-9 for most NHS staff and asked whether pay rises below the rate of inflation were going to be the norm.
“It depends on how you measure inflation,” said Mr Johnson. “The chancellor [of the Exchequer] is right to ensure that we don’t build in an inflationary spiral that takes us back to the days of high interest rates.
“I say on many occasions to nurses, GPs, and consultants: if you look at the record since 1997, and if you look at what happened through Agenda for Change [the system of pay and conditions introduced in the NHS in 2004], no government has done more to try to establish decent pay for people.
“In terms of how we maintain that pay we are going into a difficult set of discussions and negotiations, but I am hopeful we will come out with a settlement.”
Mr Johnson confirmed earlier speculation that the NHS was on course for a surplus of £1.8bn (€2.5bn; $3.7bn) by the end of the current financial year.
“This is a dramatic improvement,” he said, “and I think it’s testament to the tremendous efforts of NHS staff over the last year and a half.
“It’s reasonable for a large organisation with a £100bn turnover to have a 2% surplus. I don’t think the NHS could function on a break even basis.”
MPs asked him about the consultants’ contract and whether or not it was a mistake for Mr Johnson’s predecessors to give consultants extra pay before they had made changes to their way of working.
“I am a supporter of that deal,” he said. “I think consultants ought to get decent pay; so should GPs and nurses. The trouble is people forget what life was like before that contract.”
Trusts now knew what their consultants were doing, he argued, and since the contract was agreed average NHS productivity, when adjusted for quality, and the amount of time that consultants spent on direct clinical care had increased.
The MPs also tackled Mr Johnson on differences in policy between England and Scotland, such as free personal care for elderly people and free prescriptions.
Charlotte Atkins, Labour MP for Staffordshire Moorlands, said, “Quite often English patients feel that they get a raw deal by comparison with Scotland. For instance, Scotland has the flexibility to offer free [personal] care for elderly people. How can we justify that?”
Mr Johnson replied, “Scotland decided to go down the route of free care. We didn’t do that because we thought it was the wrong thing to do.
“I wouldn’t go down the free prescriptions route. I think there are better things you can do with your money to ensure you target the people who need it most.”