How much is this going to cost NHS organisations?
We are currently in negotiation about a new contract. How does this affect us?
What are the benefits for NHS organisations?
What does this mean for future contracts?
What is required to implement the full regime?
What is the position of foundation trusts?
What should employers be doing immediately?
What support can be expected from NHS Employers?
NHS Employers was aware of the financial pressures faced by trusts and was especially anxious to minimise trust costs within this financial year. The costs for 2005/06 financial year are limited to contributing 10p per hour towards the uplift to the rate of £5.65 per hour. This equates to £4 extra per staff member per week (assuming a 40 hour week). How much this will cost over the six months of this financial year obviously depends on the number of staff covered locally.
The second part of the interim arrangements from April to October will be more costly. The expectation is that the cost spread across the NHS will be £13m overall.
When it comes to the full regime the expected costs will be £75m per year across the NHS. This will entail potentially significant costs. These additional costs have been reflected in changes to the 2006/07 tariff although this does not increase the overall funding available to the service.
We understand the acute financial pressures facing the NHS and appreciate that implementing this agreement will result in additional costs. However the agreement was reached with a view to averting some difficult local industrial relations problems –the risk is that these could re-emerge if progress is not made.
This does need to be taken into account. The interim arrangements and full regime should be reflected in the contract. There is no expectation that the full regime should come in earlier than October 2006 even if a new contract is coming into operation before that date.
What are the benefits for NHS organisations?
Although there are financial costs for NHS organisations in this agreement NHS Employers believes there are real benefits for the NHS:
Staff in these groups make a significant contribution to the quality of the patient experience. Improvements to the skills, quality and morale of this section of the workforce should pay real dividends in the quality of service to patients.
These changes should make significant improvements to recruitment and retention rates.
The differentials between contractor staff and directly employed staff on Agenda for Change terms was causing increasing industrial relations tensions in many trusts with industrial action threatened in a number of areas. This agreement should address those problems.
These staff have traditionally been amongst the lowest paid in the community. There should be social, economic and health benefits to improved pay for these staff.
Contracts negotiations from October 2006 will be on more of a level playing field with contractors expected to provide no less favourable terms and conditions for staff. This means competition will have to be focussed on quality of service, innovation and overall value for money. NHS organisations will clearly wish to evaluate the benefits of various bids and in-house provision.
Whilst the full regime does not come in until October 2006, trusts will need to enter into discussions with their contractors at an early stage to ensure that agreement can be reached on implementing the full regime. This is going to be more complex than the interim arrangement and will require more detailed work.
This agreement is not binding on any organisation. In that sense foundation trusts (FTs) are not in a different position from any other NHS organisation. FTs are responsible for their own affairs and will make their own decisions on whether to adopt these provisions.
NHS Employers is, however, clear that the agreement does represent good employment practice and should bring improvements to patient services as well as to the staff concerned. In our role as promoting excellence in employment throughout the service we would commend the agreement to FTs as to other NHS employers.
If you have contracted out soft facilities management services you should indicate to the contractor providing the service whether you intend to adopt the provisions in the Joint statement. You may need to discuss with the private contractor on the potential cost implications before formally indicating that you intend to implement.
NHS Employers, the Department of Health, the BSA and CBI and trade unions all believe this agreement does represent good employment practice and would recommend adoption of the joint statement.
Local NHS organisations will want to make their own evaluations including a risk assessment of both adopting and not adopting the approach in the joint statement.
Contractors and trade unions have indicated to us that they do not think there has been much progress in implementing these arrangements since October. The main contractors have assured us that they are holding the necessary funds to meet their obligations in 2005/06 and are keen to engage with employers on this.
Where agreement is made to implement - local employers and contractors will need to agree arrangements for changes to the contract and for payments.
Although negotiations on this agreement were initiated and led by the Department of Health, NHS Employers was a party to the agreement and is keen to support employers in understanding and implementing the provisions of the agreement. Any queries about the agreement can be sent to agendaforchange@nhsemployers.org