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Pay review bodies are a tool for the bosses 

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The Tories say they must respect the decisions of ‘independent’ pay review bodies. Yuri Prasad explains they are set up to do the government’s bidding
Issue 2837
pay, pay review boards, strikes nurses RCN

Nurses demanding better pay and conditions on the streets in December (Pic: Guy Smallman)

Asked why he refuses to negotiate pay with striking NHS workers, Tory health minister Steve Barclay has but one answer. “It’s a matter for the pay review body,” he splutters. This group, he says, is made up of “independent industry experts” and he must follow its recommendations.

Who are this bunch of supposed freethinkers that last year decided health workers were worth a pitiful 4 percent rise? One is Philippa Hird, the former human resources director of ITV. She studied politics, philosophy and ­economics at Oxford University alongside Boris Johnson and is now the chair of the NHS Pay Review Body (NHSPRB).

Richard Cooper, former British Telecom top boss, joins Hird.  Neville Hounsome and Anne Phillimore are both from the highest rungs of human resource management, and Stephen Boyle, the former chief economist of the RBS banking group.

There is just one former union official on the eight-person panel—Stephanie Marston—and she represented top Whitehall civil servants. The government picks out the members of the body for a three-year term—and they then pocket £300 a day for their deliberations, for two or three days a month.

Pay review body employees all work for the Office of Manpower ­Economics, effectively a subsidiary of the Department of Business, Energy and Industrial Strategy. In this game the government does more than pick the team and ­backroom staff—it also makes the rules.

Ministers tell the body what its health spending plans are and what the staffing budget of the NHS will be. They also tell it what their inflation target is. That means the board deciding on NHS pay is lent on to accept an upper limit, knowing all the while that they owe their appointed place to their paymasters.

For example, in 2010, as the Tories returned to office, the government told the board that it would “not submit evidence or seek recommendations for public sector workers paid above £21,000” because it was implementing a public sector pay freeze.

The notionally independent Pay Review Body did as it was told and made no pay rise recommendation for the following year. But in order to keep up the ­pretence of independence, all pay review bodies go through the motions of taking evidence from employers and trade unions— and then draw their conclusions.

Sometimes, when recruitment and retention of staff is particularly difficult, they do make recommendations above those demanded by ministers. In 2014, for example, the NHSPRB recommended a derisory 1 percent pay rise for most health workers. But the then health secretary Jeremy Hunt wrote back to them in fury, saying the suggestion was ­“unaffordable”.

And for yet another year, health workers in England and Wales received no pay increase. Pay review bodies are a sham. They create the illusion of weighing up the interests of all the different parts of industry but, in the end, come down on the side of the government.

That’s why the GMB union has said it will no longer participate in the NHSPRB. It has rightly said it wants a return to normal collective bargaining.

Pay agreements have been used to smash strikes

The NHSPRB, which today covers more than 600,000 health workers, came into being at the end of a long and bitter health workers’ strike in 1983. Back then, Margaret Thatcher’s Tories were trying to force down wages to a below-inflation 4 percent. 

They used a divide and rule trick to split nurses from other health workers by offering them a little more. The Nupe and Cohse trade unions that represented some nurses and many lower grades were furious. But the Royal College of Nurses (RCN), which had only recently become a trade union and still had a no-strike clause, eventually accepted a separate and improved offer.

As part of the shameful deal, the RCN had insisted that as it was barred from striking, nurses’ pay should be set by an independent panel. And the Tories, thankful for the union’s duplicitous role, were keen to reward them.

In the wake of the 1983 election, they set up the Nurses’ Pay Review Body and awarded rises of between 9 and 14 percent in 1985. But once the danger of strikes had passed, the body started recommending low pay rises. 

Nevertheless, the leaders of many other health workers’ unions drew entirely the wrong conclusions. They saw that the doctors, dentists and nurses—whose pay was covered by review bodies—had fared better than those where unions negotiated directly with the government.

So, instead of stepping up industrial action to win more, they decided it would be better to abandon normal collective bargaining altogether. In 2007, as part of the new Agenda for Change NHS contract, they won an agreement for an NHS pay review body to cover pay for most health workers.

And, since then, pay and conditions have been in freefall.

Pay bodies should…control workers 

There are eight pay review bodies.In addition to the NHS, they include doctors and dentists, the armed forces, prison staff, teachers, the police and the National Crime Agency— and those on “senior salaries”, such as judges and generals.

Between them, they cover some 2.5 million staff, almost half of all people who work in the public sector.They often cover groups of workers who were prevented from striking either now or in the past.

…break opposition 

 Post-war Labour and Tory governments set the pay review body ball rolling at a time when pay for the highest earners in the public sector could be settled in the High Court. They found that judges too often sided against ministers and instead with fellow members of the middle class.

 In the early 1960s they agreed to a doctors’ pay review body, and others soon followed. Under a “gentlemen’s agreement”, the government said it would accept whatever recommendation the body made.

 …keep pay low 

Pay review bodies are helping the government to keep public sector pay low. In 2020, as private sector pay rose about 6.8 percent, public sector settlements averaged just 2.9 percent. 

By the end of 2021, average public sector pay settlements had dipped below 2 percent. Last year, it was at 2.7 percent. But with prices now spiralling at around 14 percent, workers in neither sector are getting what they deserve.

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