Rubbing salt in nurses' wounds

Any manager with the slightest understanding of dealing with trade unions (and so-called professional bodies that are really trade unions), knows by heart the golden rule of industrial relations: "If you mean it, do it; if you don't mean it, don't do it; but for goodness sake, do not pretend to do it if you do not mean it."

Which leads one to wonder how health ministers and the NHS Executive can keep on getting it so wrong in dealing with the pay of doctors and nurses. During the past three or four months, a conflict has been brewing over whether the pay of health workers should be settled centrally, with no strings attached, or negotiated locally and tied to productivity.

Now, it seems, all the brave ministerial words about moving the NHS on to locally determined pay have been rendered hollow by the Government's manifest anxiety not to offend the professions in so doing. It takes a special type of ineptitude to start off wanting local pay and no trouble and ending up with a dispute and almost certainly no local pay.

The stupidity of it all is heart rending. In the three pay rounds since the last general election, the application of even a small amount of ministerial will could have achieved a local pay policy without too much difficulty. It would not even have been necessary to dismantle the established national pay structures - Pay Review Bodies (for professionals) and the Whitley Councils (for everybody else). These bodies could just have been asked to make no recommendations in the year chosen for the implementation of local bargaining. Left with no choice but to get their pay increases from their employers, doctors and nurses would sooner or later have pushed their local representatives into negotiations with their NHS trusts and that would have been that.

But the will has not been there. And now, with the Government's fortunes at rock bottom and when the last thing they must want to see is the NHS rocketing up the political agenda, they contrive to get into a punch- up with nurses. I hope that ministers and the executive are not themselves on performance-related pay; if they are, they will get no bonus for this display.

Let us take a look at how this situation has come about. According to the Chancellor of the Exchequer, there should be no pay increases in the coming financial year unless justified by increased local productivity. So what do health ministers do in pursuit of this clearly stated policy? Tell the Pay Review Bodies and the Whitley Councils that there will be no further central settlements, but that pay increases must be negotiated locally by trusts in the light of affordability and productivity?

No; they allow the Doctors and Nurses Pay Review Body to recommend increases but persuade it to say that some part of the recommended increase for nurses should be negotiated locally in the light of the performance of individual trusts. They do not apply this dual-tracking to doctors, but give them a single flat rate central settlement. And ministers and others are then surprised when nurses feel that they are being badly treated relative to doctors; when the British Medical Association trumpets the settlement as justifying the bullying pressure they have been applying over the past months in an attempt to head off local pay; when the Royal College of Nursing and Unison - which normally compete fiercely for nurse members - are driven into a campaigning alliance to maintain central pay determination; and when the Royal College of Nurses is forced to contemplate abandoningits no strike policy.

As if this were not enough, ministers have completely mixed up the separate issues of local pay and performance-related pay. There is a case for performance-related pay, but it is much less important than local pay per se - local pay tied simply to affordability. Instead, they have tied the notion of local increases to improved "organisational performance": increases will only be paid where it can be shown that, for example, more patients have been treated, or more work has been done with fewer staff, etc.

The Government is presenting the current Unison and RCN campaigns as a demand for a flat rate 3 per cent settlement for all nurses. In fact, the campaign's primary purpose is the retention of central pay bargaining, the abandonment of which would deprive the unions' national officials of their traditional prominence.

But I would be prepared to gamble that, faced with this concerted opposition, the Health Department is already looking for forms of words which will allow the central settlement to be met, while maintaining the fiction that some of it has been paid locally. Perhaps a flat rate 1 per cent paid centrally and a flat rate 2 per cent paid locally, with all talk of productivity set aside?

In any case, as matters stand, the question of productivity raises a host of issues. Given that individual performance-related pay is not being recommended (and why not?), to what period is "organisational performance" to be attached? Performance in the current financial year which ends in March? Surely not - nobody pays for past performance. Performance in the coming financial year? Logically, yes. But the discretionary amounts could not be paid until April 1996, and the RCN and Unison are not going to settle for that. They want a full flat rate increase now. It is not going to be easy to come up with agreed formulae.

What really gives the spuriousness of the productivity game away is central advice issued by the NHS Executive to the effect that, "in the early years", trusts may want to give "across-the-board local pay awards". Unless they do, it is suggested, the review bodies may regard it as unfair and "revert to their traditional practice of across-the-board increases, leaving less scope for local pay".

Just who is making the policy on pay - ministers or the review bodies? The intention is clearly to keep the review bodies in play in perpetuity, to provide, as the central guidance says, "a national framework within which the move to local pay will take place" and, beyond that, "to have an important role in the monitoring process".

How can there ever be proper local pay tied to affordability and local productivity if the review bodies are to continue to have their fingers in the pie in this way? This is simply replacing one form of central control with another.

It is impossible at this stage to be clear about what the outcome of this dispute will be. But what is now happening underscores the validity of the original underpinnings of the local pay policy: that trusts would only take the management of their affairs seriously when given control of the 75 per cent of their income which goes on pay; that trust managers would only mature when they learnt to use pay as a tool in getting work done as effectively and efficiently as possible; and that a few local disputes were much more preferable than a corrosive national dispute. The Government must be wishing it had followed through its policy earlier and more energetically.

The writer is professor of health services management at Nottingham University and former director of personnel for the NHS.