Labour’s agreement on junior doctor pay is a good first step for renewed staff relations

Rachel Reeves’ audit of the public finances identified public sector pay rises as some of the largest unforeseen fiscal pressures facing the new government. There is some truth to that – with the strikes and strained relations which chequered the last administration underlining the need to find acceptable solutions.  

Labour’s decision to accept the recommendations in full is, however, unsurprising given the scale of public service recruitment and retention problems. It is also largely a continuation of the approach taken by recent governments. The Sunak and Johnson governments accepted the recommendations of pay review bodies in 2022  ²⁹ https://www.gov.uk/government/news/nhs-staff-to-receive-pay-rise  and 2023  ³⁰ https://www.gov.uk/government/speeches/pm-statement-on-public-sector-pay-review-13-july-2023  respectively following intensifying dissatisfaction with pay and – in 2023 – ongoing industrial action. We argued last year that accepting pay recommendations, while expensive, was necessary to stem the flow of staff out of the service into private sector jobs with more competitive salaries. Ensuring that public sector pay remains competitive with the private sector was one factor that drove relatively high recommendations this year.  ³¹ https://assets.publishing.service.gov.uk/media/66a7bb2ffc8e12ac3edb0667/NHSPRB_37th_Report_2024_Accessible.pdf , p.82

Labour has wisely adjusted the government’s tone on pay

But accepting pay recommendations can be approached in different ways, and the new government’s tone in is in stark contrast to its predecessor. While the Sunak government did eventually accept pay recommendations in 2023, it did so following speculation and briefings that recommendations were too high and the government would not accept them.  ³² https://news.sky.com/story/rishi-sunak-hints-at-blocking-public-sector-pay-rises-as-he-attacks-completely-unreasonable-doctors-strikes-12909782  That reticence might be understandable in a constrained fiscal environment, but it also eroded some of the goodwill the government might have garnered had it accepted recommendations straight away. The last government also introduced the Minimum Service Levels Act,  ³³ https://www.gov.uk/government/news/strikes-bill-becomes-law  a piece of legislation that further soured workforce relations.  

In contrast Labour's early approach to workforce management is more positive. The King’s speech saw the government commit to scrapping the unpopular minimum service levels legislation.  ³⁴ https://assets.publishing.service.gov.uk/media/6697f5c10808eaf43b50d18e/The_King_s_Speech_2024_background_briefing_notes.pdf , p.21  Labour then rapidly accepted PRB recommendations where Sunak’s government dragged its feet. 

While tone can help raise staff morale, money talks. More substantively than those steps, health secretary Wes Streeting has hammered out a deal with junior doctors that the British Medical Association (BMA, the union that represents the majority of doctors) is now putting to its membership. That deal built on discussions that the previous government started, but Labour have rapidly done what the Conservatives failed to do: made an offer that the BMA supports – albeit in a lukewarm tone. That offer might have been the result of some hard negotiating done by the last government, but the credit – with the country and (if accepted) the BMA – will go to Starmer and his ministers. Our recent report identified resolving junior doctor industrial action as a key early challenge for the new government. So regardless of the genesis of the deal, if the BMA’s members vote in favour then it will be a strong first step.

The government still faces many difficult decisions about workforce relations  

However, the government must still confront tricky issues around pay and conditions. Industrial action in general practice is now the most pressing problem facing Streeting in the NHS after the BMA announced that GP partners have voted in favour of undertaking industrial action – which could include such steps as limiting the number of appointments delivered per day  ³⁵ https://www.bma.org.uk/our-campaigns/gp-campaigns/contracts/gp-contract-202425-changes  – for the first time in 60 years.  ³⁶ https://www.independent.co.uk/news/health/gp-strike-nhs-england-bma-standstill-work-to-rule-b2589390.html  That could cause profound and widespread disruption across all NHS services. Resolving those strikes is also likely more complicated because GP partnerships are small businesses contracted by the NHS, rather than salaried staff.

More broadly, public sector pay is still lagging behind private sector pay compared to 2009/10 (though this was also likely a low point of private sector pay following the financial crisis). That effect is more severe in some of the key staff groups in public services: nursing professionals, primary and secondary school teachers and police officers have all seen real terms declines of more than 10% in their pay since the start of last decade. And some of these groups may look at the substantial settlement for junior doctors and consider further industrial action.   

The agreed pay rises also do not address deep seated pay issues in some key staff groups such as carers in the adult social care sector. The government’s manifesto committed to establishing a fair pay agreement in the sector – an approach that is fraught with challenges, as we have previously argued. Putting aside the question of how a new pay arrangement would work, the new government has given no indication that it is willing to commit any funding to reforming the sector, seemingly cancelling the long-awaited charging reforms ³⁹ https://www.gov.uk/government/speeches/chancellor-statement-on-public-spending-inheritance  and scrapping funding for training and development. ⁴⁰ https://www.communitycare.co.uk/2024/07/30/labour-scraps-planned-increase-to-adult-social-care-training-funding/  In the absence of reform or additional substantial funding, adult social care will likely continue its pattern of decline.

A new party in power does not automatically resolve the fraught relationship between public sector staff and the government. But the early signs are that this government is serious about resetting relations, a necessary first step towards improving performance in public services.