Will Scotland stop the squeeze on pay again?

Four more years. The Chancellor's budget announcement that NHS staff will face another round of pay constraint will likely take us through to the next Westminster election. The timing gives the UK government further fiscal breathing space to contain cost in the NHS. 

Timing is all in politics, and what might suit Westminster looks more problematic for the SNP government at Holyrood. With an election due next year, the Scottish government will have to decide how to deal with this latest announcement on NHS pay. The Chancellor’s budget still has important repercussions for Scotland through the Barnett formula, and the NHS Pay Review Body makes its recommendations across all four UK countries. But the government in Edinburgh has a recent record of responding to UK-wide decisions on NHS pay by announcing that Scotland will diverge from them: in part to gain positive profile, in part perhaps just to emphasise that it is different from Westminster. 

Last year the Holyrood government announced it would implement fully the Review Body recommendation for an across-the-board one per cent pay increase, whilst Westminster postponed full implementation.  At that time, the Health Minister in Scotland also argued the case for relatively higher pay increases for lower paid NHS staff to help them meet the Scottish 'living wage', and indicated that Scotland would not follow NHS England if the latter ended automatic pay increments. 

That was more than a year ago, before the Scottish referendum. This year the Scottish government will have to work through its NHS pay options against a backdrop of tough public finances. With a stronger commitment to 'partnership working' with the trade unions than exists in Whitehall’s Department of Health, and an eye on the looming Holyrood general election, this will make for difficult decisions. Whilst various Westminster health ministers and chancellors have advocated for a shift to regionally varying pay in the English NHS (without much success) NHS Scotland has remained resolutely centralist in its pay approach. In keeping with the partnership working approach, it has also operated with a Holyrood government commitment to no compulsory redundancies.

Some of those key 'partners' are now raising the stakes. The Academy of Medical Royal Colleges and Faculties in Scotland and the Royal College of Nursing (RCN) Scotland recently issued a joint statement warning that “difficult decisions need to be made now with the public about how and where money is invested in health services, if the NHS is to be sustainable for current and future generations of people in Scotland”. They highlighted heavy staff workloads, and collectively urged action on new ways of delivering care, and improved inter-professional working.

So the Scottish government now finds itself facing a challenge familiar to Westminster: trying to meet its population health priorities with a hard pressed workforce and tight funding constraints. NHS pay determination is at the nexus of politics and health service funding – and beyond political advantage, there are real reasons why a different approach should be considered. Pay should be being used as a lever to improve service delivery and reward the contribution of staff on both sides of the border, but these positive possibilities have been sidelined as a result of the top down national NHS pay freezes.

In the past, Westminster could have been 'blamed' when Scottish staff felt the pinch of a UK wide policy of pay restraint. But the Scottish Government has now begun to put its own stamp on an approach to pay determination, and is pushing for more fiscal autonomy. Devolution has shifted accountability to devolved political masters in each UK country.

Of the areas of policies effecting Scotland’s NHS workforce, only professional regulation, and, to a diminishing extent, pay structures remain at the UK level. The question is how long this can continue when differing electoral cycles, different health priorities and changing and sometimes conflicting political imperatives exist in Scotland and England. We should get some sense of the answer from watching whether despite the financial pressure, the Scottish Government can yet again announce a different policy on pay in the coming weeks and months.

Please note that the views expressed in guest blogs on the Nuffield Trust website are the authors' own. 

This blog is part of an ongoing series exploring the devolution of healthcare systems across the countries and regions of the UK.