Feature

Too casual by half

The government says the NHS should ‘set an example to other employers’ in creating a healthy workplace. Yet new ‘flexible’ employment practices in the health service will create a low paid, casualised — and unhealthy — labour force, warns Bob Abberley

The internal market has ushered in a new era of low pay, job insecurity and casualisation for NHS staff. Ministers declared that the reforms would herald a bright, new future for staff — but instead they face the far bleaker reality of insecurity, deskilling and low pay.

The health service ‘reforms’ gave trusts the power to break away from nationally agreed pay and conditions. Increasingly trusts are becoming less inhibited in the use of their new-found powers. The logic of the internal market is now leading inevitably to the deterioration of conditions for NHS staff.

The health service is highly labour intensive. Pay accounts for 72 per cent of NHS spending, and is the most vulnerable part of the budget. As labour economists note: ‘In the absence of general protective norms governing the labour supply, it is the most vulnerable of the inputs to production and... the one where firms can most easily realise short term savings through restructuring.’¹

The term ‘flexibility’ is likely to become a euphemism denoting the introduction of highly exploitative labour practices. Increasingly, ‘flexibility’ is associated with demoralisation of the workforce and the rise of poverty. A recent OECD report voiced concern over the increase in part-time and temporary workers in Europe, some of whom are offered ‘only sub-standard employment and income security’.² The director-general of the Institute of Personnel Management has noted the creation of a ‘casualised industrial peasantry’.³

Proposals circulating within NHS management include deskilling the workforce; replacing skilled staff by cheaper and less skilled staff; dividing staff into ‘core’ and ‘non-core’ — in some cases, making the latter self-employed — and replacing collective contracts with personal ones.

The need for a career structure, a reliable income, and job security merit no consideration. Such highly exploitative practices for the sake of cost cutting threaten the quality of care provided and should have no place in the health service.

Despite ministerial assurances that the ‘reforms’ would lead to higher pay levels, the reverse is the case in many areas. New rates and conditions are being introduced which are often inferior to those agreed by national bargaining.

Bitter past experience of competitive tendering for many NHS services suggested that this would indeed be the case. Eric Caines, former NHS personnel director, argues that the ‘discipline of contracting out and market testing’ that ancillary workers have experienced should be extended to doctors and nurses,⁴ with the resultant savings used to pay more to health workers ‘employed at a level which is below what constitutes low pay’.

But the contracting process has meant a steady decline in living standards, job security and working conditions for ancillary workers. One study found that not only are ancillary workers’ wages low when compared with public and private sector groups, but that they actually suffered a fall in real earnings between 1981 and 1990.⁵

The claim that pay rises are in prospect once the ‘shackles’ of unions and national bargaining have been cast off and competitive tendering introduced is nothing more than cynical rhetoric. The evidence all points the other way.

• Wirral Trust has cut the pay of nursing auxiliary work by 12.5 per cent (from £3.97 to £3.49 per hour). It argued that pay was ‘significantly above market rates’. The trust also increased the pay of its chief executive by 19 per cent from £63,000 to £75,000 following a ‘market review’.
• The Northumbria Ambulance Trust has sharply cut the hourly rate for patient transport staff. The Whitley rate is £4.87 per hour. The trust’s ‘ambulance care attendants’ (Grade IV) are paid only £3.46 per hour (a cut of 29 per cent). Staff have also had their working week extended from 39 hours to 45.
• The Lincolnshire Ambulance Trust has cut the pay of patient transport staff by over 30 per cent (from £4.87 to £3.39). It uses the euphemism ‘value for money’ to justify its poverty pay measures. In 1992/93 the trust chief executive saw his pay rise by 9.4 per cent.
• The most dramatic pay cuts have been made by the Cleveland Ambulance Trust. The trust pays 50 patient transport workers £2.98 an hour - a pay cut of 39 per cent. These are possibly the lowest paid workers in the health service and among the lowest paid in Britain.

Other trusts that have cut pay include West Midlands Ambulance Trust (32 per cent cut), Mersey Ambulance Trust (28 per cent cut) and Norfolk (9.6 per cent). And in these trusts the working week has been extended and staff are frequently on very short term contracts. Low paid staff have seen their pay fall still further. Caines’ assertion that local bargaining would ‘give trusts the opportunity to start tackling the low pay problem’ looks like hot air. Trusts are creating a low pay problem.¹⁰

A further consequence of the internal market is a sharp increase in job insecurity. As trusts are no longer assured of keeping contracts with their purchasers, so staff can no longer be assured of keeping their jobs. As health minister Brian Mawhinney recently conceded: ‘As money follows patients and contracts, so the old concept of a [staff] establishment, a fixed number of nurses employed in a hospital, has got to be under review.’⁶ Nursing staff have been known to be on as little as eight-week contracts. Some Cleveland Ambulance Trust staff are on 13 week contracts.

Throughout the health service jobs are being lost. Caines believes the NHS should lose a fifth of its workforce of one million.

But at the same time, senior staff are financially compensated for their lack of job security. The finance director of Lewisham Trust is paid £70,000 a year for a three year contract. His salary takes account of the lack of long-term security.⁷Such consideration is not available to lower paid workers in the NHS. In 1992/93, the pay of chief executives rose by an average of 8.7 per cent — a rate well above that secured by other health service workers.

Unison is committed to an equitable, high quality, patient-centred NHS. Quality services demand a quality workforce, and this requires investment in people and services, training and career development. Instead, a crude, narrow approach is being pursued, which sees efficiency in no other terms but cost-cutting. The result is a dilution of skills and the steady erosion of the quality of care.

The conditions of service for staff are the conditions of caring for patients. Quality health care cannot be provided by deskilling, casualising and demoralising health workers.

So the overall pressure of the internal market is to create a cheap workforce characterised by low pay, low skill and job insecurity. The market pits employers against employees as providers compete against each other in the struggle for contracts. Little consideration is given to the wider social implications of such a system.

The OECD found that increases in income inequality in the 1980s ‘were generally small except in Britain and the United States’. It warned of the risks of ‘creating a class of the working poor’.²

Sure enough, in modern Britain the gap between the highest and the lowest paid is wider than at any time since 1886. In 1991, the average annual income of households in the bottom fifth of the population was £3,410.⁸

This inequality extends beyond earnings. A recent government-funded study found that the British workplace was moving towards a ‘situation in which non-managerial employees are treated as a factor of production’ and the widening of income inequality is ‘being matched by a widening in the inequalities of influence and access to key decisions about work and employment’.⁹

The government’s Health of the nation strategy states that ‘the NHS must set an example to other employers and show what can be achieved’ (clause 4. 13). A DoH Health at work in the NHS pack has since been produced which states that ‘over the next ten years the NHS should become an exemplary employer, demonstrating to others that a healthy workforce benefits both individual staff members and the organisation as a whole’. The government then completely ignores the part low pay and job insecurity play in the creation of ill-health. Eliminating low pay would be a giant stride in promoting better health, but the government is pursuing policies that will do exactly the opposite.

Policies which casualise labour and lead to lower quality services must be reversed. But the consequences of the internal market go beyond the health service. As a society we pay for low pay, casualisation and job insecurity, through the costs of income support, ill-health and rising crime. Our common interest demands that we fight for measures which foster social cohesion, not social polarisation.