Time for local NHS leaders to take a first step in tackling poverty: pay staff the real Living Wage

The NHS England framework for tackling health inequalities turns the spotlight on the 20 per cent most deprived communities within each integrated care system. They are the core group in the Core20plus5 approach. Recognising that 12 million people – a fifth of the population – live in relative poverty, the majority of them in working households, it is impossible to tackle health inequalities without alleviating poverty and its consequences.

That is why poverty is ‘Core’. It cannot be avoided when addressing need, or addressed just through disease symptoms.  This blog is about one simple step organisations can take – a trust, a practice, and indeed an ICS, needs to ask itself, why not?

12 million people – a fifth of the population – live in relative poverty, the majority of them in working households...

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Poverty, like other symptoms of exclusion, is othered. It happens to other people. Not to leaders, and not to ‘us’. In the case of poverty, we often think in terms of part of the community, an estate or ‘benefits street’. Darren McGarvey writes about how when thinking about how to address poverty one ‘takes a safari’ in this other world; visiting safely, knowing that one can leave. But within the NHS you cannot leave, as poverty is inside the service, not simply in communities as a determinant of demand.

NHS organisations ask what they can do to alleviate poverty. A year ago, my colleagues published their work on the role of the NHS in addressing poverty. This set out three roles for local partners – awareness, action and advocacy. Sometimes the array of options stands in the way of action. There is plenty that can done, and much to be learnt from those anchoring at scale and pace. But there is a first step much closer to home because there is poverty in pay scales too leading to debt, insecure housing, barriers to educational access for young children. Universities, local government, and small parts of the NHS have begun to change this, applying the flexibilities in national pay agreements to their local circumstance.

To pay more to those at the bottom of wage scale – disproportionately female staff (almost 60 per cent of low-paid employees are female and the proportion in the NHS is higher) – will cost more each month. But the pay problem faced by many organisations lies in staffing vacancies, turnover, and sickness, then compensated for in overtime or agency staffing. These staffing gaps correlate to poor pay and the choices of work that that dictates. This means that cost of raising the wages of the lowest paid has a return on investment. In most trusts the gross annual change will be in low six figures. In primary care, low pay among front-of-house staff is widespread. Systems will need to think about how to fairly change that. The NHS needs to act locally regardless of sector. Employees face a cost-of-living crisis in the months ahead if organisations don’t take action.

Employees face a cost-of-living crisis in the months ahead if organisations don’t take action.

The real Living Wage is a figure that changes annually. It differs from the National Minimum Wage and National Living Wage because it is based on the cost of living, not average earnings. NHS pay scales at and below Band 2 spine point 3 do not reach it. In simple terms the NHS is paying a wage that does not support an employee’s needs – a difference of more than £1,000 a year between the real Living Wage and what a low-paid employee earns each year. Changing this now comes with a simple how-to step-by-step guide.

Eighty-three NHS bodies, including 24 trusts, have signed up to being real Living Wage employers.  131 local authorities have fully adopted the standard, and Birmingham has just been recognised as a Living Wage City. Even in the austerity of the care sector, home care and care home vacancies, there are places accepting that you cannot build retention or workplace attendance, infection control behaviours or personal development on insecure low pay.

60 per cent of real Living Wage employers state that it improves recruitment, quality of applicant, and retention in lower-paid roles. Many see falls in sickness absence and improvements in organisational alignment. 93 per cent see a benefit to their organisation from changing to the Living Wage. And the wider economic benefit is clear too: the dividend from a higher-wage economy would see upwards of £1.5 billion injected into the economy if just a quarter of lower-paid workers were paid the real Living Wage. In Greater Manchester the benefit is estimated at £56 million, in the West Country it would be £20 million, and in West Yorkshire £55 million. In many parts of England, after the hospitality sector, the public sector is the waged employer that could make that wider economic difference. A real down-payment on a forthcoming ‘levelling up’ ambition for the NHS.

To look justly at poverty in health, all NHS systems need to look clearly at their own practices and address the blind spot in their vision. A few have. Many still can. If you are unsure what to do about poverty, look no further than the real Living Wage as a first step. This needs leadership on what is core business.