Regional Pay Bargaining (Hansard, 5 March 1991)

§ 4. Mr. David Evans
To ask the Secretary of State for Health what plans he has to introduce regional pay bargaining to the NHS.

§ Mr. Dorrell
The Government's objective over recent years has been progressively to introduce greater flexibility in order to allow local managers to relate pay rates to local conditions and to reward individual performance. That process is continuing.

§ Mr. Evans
I thank my hon. Friend for that reply. Does he agree that local pay bargaining is all about incentives and about giving managers the total resources to look after their workers? Local managers know exactly what local people want. Our policy is in stark contrast to that of the Labour party, which talks about care, talks about the national health service, talks about patients, talks about doctors and talks about nurses, but at the end of the day its policy is about union power and a return to beer and sandwiches at No. 10.

§ Mr. Dorrell
My hon. Friend is right to point to the importance of pay as a key question facing national health service managers. Pay represents over 70 per cent. of NHS expenditure. It is absurd to ask a manager to use the resources within his control as effectively as possible while at the same time saying that he has no discretion over the way in which 70 per cent. of those resources are used.

§ Mr. Michael J. Martin
The Minister has given a commitment that in areas like the highlands, which are rural and spread out, the health service will be as good as in any urban area. How does he square that with saying that we will have local pay bargaining in communities where jobs are hard to find? Does not it mean that if wages in the health service are lower in those areas, it will not attract nurses and other ancillary workers?

§ Mr. Dorrell
What it means is that we are committed to delivering a high-quality health care service throughout the country, investing in managers the powers necessary to allow them to deliver that in the locality for which they are responsible.

§ Mr. Jacques Arnold
I thank my hon. Friend for the steps that he has taken to break up national pay bargaining, which is so beloved of the trade unions which Opposition Members serve. I suggest to him that the current system of national pay bargaining, with its attempted alleviation through London allowance and the like, is very unfair to boroughs on the fringes of such allowance areas such as Gravesham. With that increased flexibility, will my hon. Friend ensure that the funding goes with it to particular areas to reflect local employment costs?

§ Mr. Dorrell
As my hon. Friend knows, funding will reflect the weighted capitation formula through the regional health authorities. We are talking about discretion in the hands of managers over the way in which those resources are used. We envisage an evolutionary process which involves not the overnight demolition of traditional structures but the progressive introduction of greater flexibility, to ensure that the service meets the aspirations that we all have for it.