Feature

Working for patients – on unhealthy pay

Low pay is harming the health of contracted-out staff in the NHS. But a broad-based community campaign has succeeded in winning improvements for east London workers, says Catherine Howarth

Like many parts of the public sector, the NHS was enthusiastic in outsourcing its lowest paid staff during the 1990s. As a result, poverty pay in the NHS is now widespread, with multinational contractors winning hundreds of valuable contracts while paying the national minimum wage, or marginally above, to cleaners, catering staff, security guards and porters.

One year ago, I wrote in healthmatters about the low pay of outsourced staff in the NHS (How the NHS harms health, issue 49). A vigorous campaign in the east end of London led by the East London Communities Organisation (see box), in conjunction with UNISON, was challenging the north east London strategic health authority and local trusts to guarantee staff a ‘living wage’ or to bring contractors’ terms and conditions in line with NHS levels.

In the year since that article, the East London campaign has achieved significant success, and across the country a wave of new pay deals is securing contracted-out workers in the NHS a better deal.

Rose Kisakye is a domestic assistant at Homerton university hospital NHS trust. Formerly a teacher in Uganda, she has been an NHS cleaner for several years but, until June, her net pay was just over £170 a week – less than £10,000 a year. Her contract with ISS Mediclean provided her with no London weighting, no sick pay, eight days less paid holiday than equivalent workers on NHS contracts, and no employer contribution towards a pension.

But under the pay deal agreed in June, Rose got an immediate pay rise of 12.5 per cent, bringing her hourly wage up to £5 an hour. Victory tasted sweet to all those who had fought to bring this about, but the ‘victory’ is partial as £5 is still a very low hourly rate and well short of a ‘London living wage’, which research suggests is around £6.50 an hour.

Rose and her colleagues at the Homerton will see their pay levelled up to NHS rates by April 2006. The other east London hospitals where a similar deal has been negotiated include Barts and the Royal London, Whipps Cross, Mile End and St Clements. In line with east London, contracted-out staff in hospitals in Glasgow, Grimsby, Cardiff, Paddington, Bromley and Bolton have also organised for improvements to pay and conditions, with some staff coming back in-house.

The aim now should be to use these local successes to build a new national consensus, supported by the Department of Health and the Treasury, that everyone providing health and social care should be paid a wage that guarantees an escape from poverty, and a healthy lifestyle. This, however, would require us to know the minimum income required for healthy living, a subject explored by Paul Nicolson.

Contracting out in the public sector over the past two decades, along with outsourcing of similar services in private sector organisations, has been one of the key factors contributing to the substantial growth in earnings inequality in the UK. In turn, earnings inequality has helped to widen persistent health inequalities and exacerbate social exclusion. For a government that has committed itself to tackling health inequalities and social exclusion, the outsourcing of public services without regard to staff pay and conditions makes no sense at all.

For years now, Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) have helped to protect staff transferred from the public sector into private firms from cuts in pay and conditions. But this legal protection has never covered new employees, and in high-turnover workplaces new staff quickly became a majority. This has led, inevitably, to the infamous two-tier workforce, and to a new generation of NHS and other public service staff being paid less than employees stacking shelves in supermarkets.

Following concerted pressure by trade unions, new local government regulations introduced this year will ensure that contracted-out local authority services must offer all staff terms and conditions that are ‘no less favourable’ than the nationally negotiated public sector rate for the job. This is a huge breakthrough.

So far the Department of Health has resisted going down the same route, although pressure to give the same protection to staff providing NHS services will become irresistible, as their case is clearly as strong.

While poor pay was probably the key motivator for workers in east London’s hospitals, the lack of paid sick leave was also a source of anger. In the case of hospital staff working in close proximity to patients, the lack of sick pay is a public health hazard. Workers on very low wages will struggle into work if at all possible to avoid a day’s lost pay. A domestic assistant serving tea to fragile elderly patients on a geriatric ward while coughing and spluttering because she cannot afford to stay away from work should make senior hospital staff think twice about so-called savings arising from a cleaning contract that denies its workforce sick pay.

As part of the east London living wage campaign, a small study was undertaken for the King’s Fund into the barriers low-paid workers face in accessing health services and in maintaining good health (available at www.telcocitizens.org.uk. More than a quarter of the workers interviewed had no paid sick leave and one consequence was a high rate of missed medical appointments. Workers would make an appointment when feeling unwell, but if on the day of the appointment they felt better and were liable to lose money by attending, many chose to work instead.

The study found, perhaps unsurprisingly, that low-paid workers were not keen users of dental services, which they regarded as prohibitively expensive. And some were unable to afford prescriptions when two or three were required.

Despite the many benefits to health of being employed, it nevertheless also creates a range of often hidden costs. The real minimum cost of maintaining good health while in full or part-time work has not been adequately researched. However, none of the evidence available suggests that good health is viable on £4.20 an hour, the current national minimum wage. Even with tax credits, which have significantly added to incomes in some working families, it is unclear how much it really costs to maintain one’s health.

Tax credits will never be a substitute for adequate wages that meet people’s basic needs, not least because of the high marginal tax rates which apply as people’s wages increase and they are moved off tax credits. It makes little economic sense for public sector workers to rely on tax credits paid from one part of the public purse to supplement low wages paid from another. It can only be bureaucratic, inefficient, wasteful and, ultimately, far less dignified for the workforce.

The NHS is the single largest organisation in the UK, and a huge employer of staff in low-paid positions, both directly and indirectly via contractors. Its pay policies have a major impact on health and well-being, particularly in the ethnic minority communities from which so many of the lowest paid staff are drawn.

The proposed pay spine for the NHS in England, Agenda for Change, should be of real benefit to its lowest paid in-house staff, but so far the Department of Health has not said that the new rates should automatically cover the tens of thousands of contracted-out staff doing exactly the same jobs. Intense pressure from a galvanised workforce in a number of hospitals across the UK is generating real gains, and hope, for this muchoverlooked group of workers. Much more is still needed, so that NHS trusts will no longer have the option of condemning staff to poverty wages by contracting out jobs without the protections that are so essential.