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Reforms fail to deliver cost-savings

Agenda for Change has not delivered on its promise to improve patient care, control health service pay and support career development, say MPs

Moves to make the NHS more cost-efficient through modernising pay and conditions for health service staff in England have failed, according to MPs.

The introduction in 2004 of Agenda for Change – a major programme for modernising and simplifying the pay and conditions of over one million staff – has not delivered on its promise of creating a more flexible workforce to raise standards of care and improve career progression, as well as pay. However, the government has said that the reforms phased in from 2004 to 2006 have been a success.

In real terms, the absence of a benefits evaluation plan means that the success or otherwise of the reform agenda cannot be quantified. In its business case for Agenda for Change, the Department of Health (DH) predicted that such reforms would result in cost-savings of more than £1.3bn in the first five years. These savings were to come from improvements in productivity of between 1.1 and 1.5 per cent a year, reductions in equal pay claims, reduced reliance on agency staff and controllable pay costs.

"It is not known whether Agenda for Change has generated the predicted £1.3bn savings. That makes it all the more incumbent on the Department [of Health] to explain to us how the programme is going to support the £15bn of efficiency improvements in the NHS planned for the next three years," said Edward Leigh, MP, chair of the Committee of Public Accounts.

According to the 29th report from the Committee of Public Accounts, the NHS pay bill for staff employed on Agenda for Change terms and conditions of service (this excludes doctors, dentists and managers all of whom have had their own new contracts in recent years), has risen by 5.2 per cent each year on average since 2004-05, while productivity fell.

"There is also no evidence of the increased productivity and other savings in the NHS that were going to be achieved. The Department of Health actually did not require Trusts to measure productivity improvements and other benefits. What evidence there is, derived from Office for National Statistics figures, suggests however that the productivity of the NHS fell 2.5 per cent a year, on average, between 2001 and 2005, although since then there has been a slight improvement. The substantial growth in the amount of healthcare provided was outstripped by the even faster growth in NHS staffing and resourcing," he added.

In addition, the DH pledged that a key part of the programme, which includes a job evaluation scheme and harmonised employment terms and conditions, would focus on encouraging staff development and improving staff performance using the Knowledge and Skills Framework. However, by quarter three 2008, nearly two years after Trusts had completed transferring staff to Agenda for Change terms, conditions and pay rates, only 54 per cent of staff had received a knowledge and skills review.

The Royal College of Nursing (RCN) has come out in defence of Agenda for Change, claiming that it has made the NHS a better place for patients and staff. However, it has warned that Trusts 'must make good use of the Knowledge and Skills Framework to ensure healthcare staff can access relevant training'.

RCN chief executive and general secretary, Dr Peter Carter said that critics are wrong to suggest that the reform agenda has not bought improvements. "It is no coincidence that in recent years the Healthcare Commission has rated more and more Trusts excellent or good, or that the 18-week target has been achieved way ahead of schedule. There is plenty of evidence to show Agenda for Change has made the NHS a better place for patients and staff."

18th June 2009

From: Healthcare

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