MPs should back regional pay proposals to achieve a “higher quality and more efficient NHS”.
A report by independent think tank Reform warns the government that its wish to achieve a more productive NHS is “undermined” by its support for national pay agreements.
However, it noted caution in introducing lower rates of pay in lower cost areas – something the government has already expressed interest in.
Instead, Reform claims government support for local pay arrangements for academy schools would be a “better” way of saving money while also giving employers the necessary encouragement to improve the quality of their staff.
The think tank’s report Doctors and nurses also urged ministers to reject the NHS Employers proposals to impose further national pay freezes, claiming it would prevent employers from incentivising good performance.
“The current negotiations on NHS pay are a test for the new Secretary of State,” said Nick Seddon, deputy director of Reform.
“There is a glaring contradiction between his goal of a higher quality NHS and his Department's support for national pay arrangements."
Dr Peter Carter, chief executive and general secretary of the Royal College of Nursing (RCN), warned that far from leading to a more efficient NHS, “local pay would be a recipe for disaster”.
“Local pay bargaining would actually increase inefficiency in the NHS,” he said.
“This is because Trusts have to implement their own pay systems, forcing them into bureaucratic and expensive machinery with no economies of scale, which only takes money away from patient care.
“There is compelling evidence that the key to improving the quality of care in the NHS is not pay, but good quality management and the right number of properly trained staff, who have the time and skills to provide the best possible care for patients.”
A DH Spokesperson said: "NHS trusts have had the freedom to determine their own pay and conditions for many years, but most of them have chosen to keep national terms and conditions.
"However, some NHS organisations are frustrated that no national agreements have been reached on proposals that NHS Employers has put forward to ensure that pay arrangements remain affordable and fit for purpose. Reaching a swift and successful conclusion in these national negotiations will significantly reduce the need for separate, local deals."