All change: workforce implications of the Health White Paper

Julian Hoskins reports on how the NHS White Paper, published this month, impacts on workforce matters and highlights the legal requirements that are likely to be engaged as the proposals are implemented.

It is unlikely to have escaped your notice that on 12 July 2010 the Health Secretary, Andrew Lansley, introduced the Health White Paper.  It sets out the Government’s plans for the future of the NHS, with the lofty ambition of making the NHS “the envy of the world”, whilst reflecting the coalition’s “core beliefs of freedom, fairness and responsibility.”  And all this is to be achieved in the context of public sector savings of £20billion and a 45% reduction in NHS management costs by the end of 2014.

The White Paper contains some radical proposals, but is short on detail; the Government is to consult on the details, so it remains to be seen how, in practice, the changes in the White Paper will be put into effect.  But the headline changes are likely to be implemented and preparations for these are being put in place now.  So what are the workforce aspects and what legal obligations might they trigger?

• All SHA or PCT staff whose jobs are directly affected by these changes must be afforded the opportunity to discuss the proposals with their line manager, as set out in Sir David Nicholson’s ‘dear colleagues’ letter dated 13 July 2010.  These arrangements should be put in place now as all staff should have an interview by the end of September. 
• Layers of management are to be removed, with a ‘rebalancing’ away from back office staff and towards clinical staffing and frontline support. It is acknowledged within the White Paper that staff will lose their jobs.  Therefore, formal information and consultation processes under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) will need to take place in respect of any collective redundancies caused by workforce reduction.  It would also be advisable to enter into consultation in respect of any reorganisation, even where dismissals are not anticipated. 
• Partnership working is a central theme in the White Paper. Local authorities will have objectives for improving public health, and will be required to promote the joining up of local NHS services, social care and public health improvement.  Barriers between local authority and health funding are to be removed.  These measures are likely to result in staff transfers regulated by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), and are likely to raise particularly complex issues – for example, in relation to transfers to non-NHS organisations, and non profit making organisations.
• Responsibility for commissioning healthcare is to pass to GP consortia at a local level and to a new Independent Commissioning Board for national and specialist initiatives. Again, this is likely to trigger the application of TUPE as these functions pass from large organisations to significantly smaller ones. GPs may delegate some or all of their functions to external bodies which may see private sector-led 'super consortia’ emerging.
• Within three years all NHS trusts should become, or become part of, foundation trusts.  There is to be consultation on a proposal that foundation trusts should be able to merge more easily and this will cause complex restructure issues. It is also envisaged that there will be an increase in the number of employee led organisations, particularly in the area of community services.
• In future, pay decisions should be led by healthcare employers rather than imposed by Government.  The White Paper sets out that there will be an expectation that employers will take the lead on staffing and cost pressures, and also lead negotiations on new employment contracts. This suggests that there will be a move away from the current arrangements for nationally agreed terms and conditions (such as Agenda for Change) although it is anticipated that many employers will continue to use national contracts as a basis for local terms and conditions.
• There is to be an independent review of public pensions, including the effect to which pensions may act as a barrier to increased diversity of provision of public services.  This may play a key role in determining the terms on which NHS staff will move (in line with TUPE) to new commissioners and it appears to be central to the government’s thinking that there should be a much greater private sector presence in the provision of healthcare. If the government seek to significantly affect pension entitlements then this is likely to provoke strong union opposition with the possibility of industrial action.
• The coalition’s policy on pay restraint is reiterated in the White Paper: the NHS will be included in a two-year public sector pay freeze from 2011/12.
• There is also a proposal that the Department of Health should have a reduced role in overseeing staff education and training. 

In summary:

• partnership working;
• major workforce reduction and reorganisation; and
• staff transfers

are the three key workforce themes that emerge from the White Paper.

Accordingly, the relevant employment law framework will include (in outline),

• TUPE transfers;
• redundancies (including collective consultation for large scale redundancies);
• reorganisation; and
• information, consultation and employee engagement on the above.
• Industrial action if pension entitlements change.  

What next?

The Government is issuing further consultation papers on specific aspects of the proposals set out in the White Paper.  Many of the proposals require primary legislation, most of which will be implemented through the Health Bill, which will be introduced into Parliament this Autumn and is expected to receive Royal Assent next Summer.

Support from Bevan Brittan

Bevan Brittan LLP is the only law firm in the UK which is a market leader in both the health and local government sectors, as well as contracting between the public and private sectors; as such, we are uniquely placed to advise on the collaborative working and reorganisation which will be required under the proposals set out in the White Paper.

In order to assist with achieving the £20billion savings required by the drive for efficiency – of which the White Paper is a key aspect – we provide a range of products and support:

• training for clients and contacts on key workforce costs saving / White Paper topics: partnership working (the TUPE and HR aspects), redundancy and reorganisation. 
• Workforce planning, bespoke advice, toolkits, documentation and support are also available in relation to all aspects of the legal obligations and issues that will arise as the drive for efficiency is implemented.

Please contact Sam Russe-Jones for further details.

As the consultation papers are published, Bevan Brittan will be producing a series of Alerts which will each examine in detail a different strand of the White Paper. If you do not already receive our Alerts, you can sign up by clicking here.

Further information

For Bevan Brittan publications on related topics, please see:

Service Restructuring & Efficiency Savings - Legal Challenges & Opportunities

Summer of discontent, dealing with industrial unrest, by David Widdowson

Starting redundancy consultations by Julian Hoskins

Redundancy: the difficult issues by Sarah Lamont