Letter from Richard Pengelly to all HSC Staff - 29 November 2019

Dear Colleague

As you will know, formal discussions between the Department and trade unions unfortunately ended last week without agreement. Industrial action is now underway and is scheduled to escalate in the weeks ahead.  I am sure you will share my deep disappointment that the intensive efforts to find a way forward were not successful and, in that context, I believe it is important to write to you directly to explain our position.

Before I set out the background context and provide more details on the various elements underpinning the pay offer, I would like you to consider the following key points about it, and the next steps that we have in mind:

  • We have put £51 million on the table to fund this year’s pay rise backdated to 1 April 2019. The offer represents a 2.1% addition to the Agenda for Change paybill and is available to be paid now. In addition there will be your normal pay progression for staff who are eligible to receive this.
  • I wanted to offer a higher pay rise, but that just wasn’t possible. It is a simple matter of fact that the Department doesn’t have the money to fund a higher increase in pay.
  • The Department is taking action to address concerns about safe staffing.
  • To move all of us out of this dispute I am prepared to immediately authorise payment of the above offer to AfC staff and build on this by putting in place independent facilitation of a process with the employers and trade unions to develop sustainable solutions on pay and workforce issues including AfC refresh, agency use, safe staffing and education commissioning to put to incoming Ministers for consideration.

The important context to this dispute is that, given the unprecedented budgetary and other uncertainties facing all government departments, we are very constrained in the actions we can take at present.  That said, I must emphasise – as I have done in the past – that this doesn’t mean we don’t value staff and the great work they do. On the contrary, I fully recognise just how much the system depends on your commitment, skill and good will.

I sincerely wanted to offer a higher pay rise than we were able to, but that just wasn’t possible. A key point of this letter is to explain why that is the case.  Similarly, I want to set out the important actions we are taking on safe staffing issues – an area where we share the concerns expressed by colleagues across the service.


Last week, the Department made a formal pay offer for 2019/20 to Agenda for Change trade unions.  The main points of the offer – and how we got to it - are summarised at the end of this letter, but overall, it is estimated to cost around £51 million.  This is the maximum offer we can make within our available funding, and represents a 2.1% addition to the Agenda for Change paybill. 

I know that Agenda for Change refresh is about more than a single year pay offer, and we are indeed committed to the refresh of Agenda for Change across the UK.  In the latest offer, the Department attempted as far as possible to respect the AfC Refresh structures in individual pay bands – leaving Northern Ireland still in position to achieve the same pay point restructuring.

Is this a perfect offer?  Far from it – and I would again emphasise that if I could go further I would.  The Department has been open and consistent with trade union leaders in over 20 meetings during 2019 that the Department faces significant financial constraints and, in the absence of Ministers, can only do one year offers at a time, as NI departments have to work within single year budgets.  At this stage, I do not have a budget allocation for next year.


These are complex issues, with some of the more significant ones being outside my authority. For those reasons, I firmly believe now is not the right time for Industrial Action.

Last week we proposed to trade union leadership a series of steps that we believe offer the best way forward in the current context.  While trade union colleagues did not feel able to accept this offer, I want to explain it here, and emphasise that it remains on the table:

  • Postpone industrial action, pending engagement with returning Ministers on these issues – the Department would fully recognise the good faith behind such action, and would commit to recognising that the Ballots already undertaken would remain valid until the return of Ministers (i.e. trade unions would not need to refresh the mandate from members for action).
  • We move to immediately process and pay the offer we have made – this could be either on the basis put forward by us, or on some other apportionment of the 2.1% envelope, to be agreed with trade unions.  This could allow payments to be made in February 2020.  Importantly, we would recognise that this does not necessarily represent a full and final settlement of the 2019-20 pay claim, as returning Ministers may wish to revisit it, or top it up in some way;
  • We immediately initiate an independently facilitated process with trade unions to develop sustainable solutions on pay and workforce issues – so they are ready for incoming Ministers to consider. Despite nearly 18 months of direct engagement between the Department, HSC employers and Trade Unions, there has never been full discussion or consensus on how AfC Refresh should be implemented in Northern Ireland.  Despite our many explanations of the position, trade union colleagues do not accept the constraints upon us in the absence of Ministers, or of the difficulty in affording pay deals.  I would emphasise that these constraints do not represent negotiating points, but simple facts. To address this impasse, we propose to move the engagement with employers and trade unions to an independently-facilitated process - perhaps by the Labour Relations Agency or some other mutually acceptable option - in which all of the issues – pay, AfC refresh, agency use, safe staffing, education commissioning – could be analysed but, more importantly, shaped into an action and implementation plan which could be put to incoming Ministers for consideration.

A number of points have been put to us in respect of the detail of this, and I feel it would be helpful to deal with them specifically.

The Department should have the money to pay for AfC Refresh in full, as this has been received from the Treasury in London through the application of the Barnett formula

This is not the case. 

The Agenda for Change paybill in England is proportionately smaller than in Northern Ireland (some £40 billion compared to some £2.2 billion).  This is because the Agenda for Change workforce in England comprises only health service staff, while social work and social care employees mainly work for councils. We in NI have an integrated health and social care system - and workforce.  Our Agenda for Change pay bill includes social work and social care employees and is thus proportionately much larger. 

This means that a Barnett-determined funding allocation, which is based on relative country populations and not staff, will always fall well short of the money needed to replicate any English pay deal.

The Department of Finance could give the money to the Department of Health to fund a better deal

We sought a further £50 million for pay in the latest autumn monitoring round (to cover both AfC and other staff groups), however this bid was unsuccessful.  This outcome reflects the similarly difficult financial position facing all parts of the public sector in Northern Ireland.  As much as we say we cannot spend money we don’t have, the Department of Finance cannot give us money they don’t have. 

We could stop paying for agency nurses and pay HSC staff more. 

In the long term this is true.  However, we are dealing with an immediate issue - agency nurses are currently being used to help fill workforce gaps, and whatever we do as regards pay in the short term, those gaps will remain. 

Agency spend is not a preferred choice but a consequence of wider problems and challenges in the health service - the Bengoa Report stressed the link between rising locum and agency costs and the current configuration of services.  It made clear that changing the model of care is the only long term solution. 

As much as we are committed to doing so, reducing agency spend is not something that can be achieved overnight and, in the present situation, agency nurses help keep wards and other health facilities open.

This is not unique to Northern Ireland, however it does have to be acknowledged that NHS England is further along the road in terms of dealing with the issue. NHS Improvement England reported a peak in agency expenditure of 8.2% of total pay costs in July 2015, but since agency rules were introduced in April 2016 to support trusts in reducing their agency expenditure, this has decreased to 4.4% (2018/19).  NI HSC expenditure on agency workers was 7.45% of total pay costs in 2018/19. 

We absolutely accept that the ever-rising levels of expenditure are not sustainable. We want to work with unions to reduce this spending and to encourage agency workers to take the many health service jobs being advertised. 

There are deep frustrations among colleagues that Northern Ireland AFC staff do not have pay parity with colleagues in the rest of the UK. 

We recognise this.  However, the reality is that there is no UK-wide pay parity in Agenda for Change, and each administration has determined its own pay rates – with different rates in Scotland compared to England and Wales.  Northern Ireland is different again.  The decision to diverge from the English rate and set localised NI rates was taken by Ministers when the Assembly was in operation. While there are a number of issues civil servants can address in the absence of Ministers, we simply do not have the authority to overturn previous Ministerial decisions. That means that the issue of pay parity cannot be resolved until we have Ministers in place.

There has been some confusion about the extent of the gap.  Taking the top of Band 5 as an example, an experienced Band 5 in Northern Ireland, after the pay award we offered last week, would earn £298 per year less than his/her English counterpart.

However, we fully recognise that staff deserve to be properly rewarded and to feel properly valued. That’s about much more than pay.


There is a global nursing shortage, with the role of nurses expanding and demand for health care increasing as people live longer.

The problem is not unique to Northern Ireland, and colleagues in other parts of the UK and the Republic of Ireland are also contending with serious workforce challenges.

For example, NI and England currently have the same nursing & midwifery vacancy rate of 12.1%, demonstrating that AfC refresh, whilst essential, is not the only response needed to address workforce problems.  Similarly, the NMC register country reports show that, alone of the UK regions, NI had more nurses and midwives joining the profession than leaving as at 31st March 2019.

If anything, these points confirm that English pay rates do not offer a silver bullet to this problem, and highlight that the real problem is more complex than pay alone.

Important investment is being made in growing the NI nursing workforce - the number of student nurses and midwives going through NI universities is this year at a record level of over 2,680, with 1,025 university places commissioned in 2019 – an all-time high. The total places commissioned in 2015-16 was 710, which means it has been increased by 44%, at a time of very serious budgetary pressures.  This investment will obviously take time to make a difference on the ground and, in the meantime, we are also recruiting nurses from overseas to help fill the gaps.

Other actions being taken include:

  • Over £50 million has been invested in the last two years in nursing services. This includes investment in the stabilisation of the midwifery and nursing workforce and funding for the enhancement of the roles of midwives and nurses as part of the transformation agenda.
  • Registered nursing and midwifery staff numbers in NI have risen by 4.7% from 5 years ago and by 10.1% from 10 years ago.
  • Unlike in England, Northern Ireland has continued to fund the payment of bursaries and tuition fees for student nurses.  This is important in supporting our future nurses and expansion of the workforce.


I fully recognise the depth of frustration in the workforce – indeed, I and my senior colleagues across HSC share it.

That said, we are dealing with concerns and demands which, however valid, cannot be fully addressed in the absence of Ministers.  The reality is that, with the resources currently available to me, I am unable to increase the pay offer made last week.  I believe my proposed way forward represents a genuine and meaningful approach, without further escalating industrial action which risks significant disruption to the service and the public we serve.  I know none of us wants that.

 Yours sincerely

Richard Pengelly Signature



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