NHS pay could be negotiated on a regional basis, putting an end to the AfC framework, under proposals announced last week by chancellor George Osborne.
In his budget address, Mr Osborne said he wanted public sector pay to be ‘more responsive local pay rates' in order to ‘help our private sector to grow and create jobs in all parts of the country'.
He explained that London weighting was an example of where pay rates already varied and confirmed that the independent NHS Pay Review Body would report to the government in July, to suggest ways in which pay could be brought more into line with private sector rates.
The change would mean UK nurses being paid different salaries for the same job, depending on their location in the country. For example, research published by NHS Managers.net suggests that, under local pay arrangements, a band 5 nurse in London might expect to earn just over £29,000, while a nurse at the same level in Cornwall - where wages are lower - would be paid a salary of around £22,700.
However, under the policy, other regional factors could be overlooked. The research states: ‘If you look at Cornwall and Devon, house prices are high (because) a lot of second homes for those from the high wage areas (are bought there).
‘For a public sector worker in those areas, competing as first-time buyers with second home buyers, the possibility of home ownership will move even further away. They may choose to move to areas with lower house prices and higher wages,' it says.
RCN chief executive Dr Peter Carter said introducing regional wage levels would ‘drive down pay in certain areas and lead to damaging competition between NHS employers'.
‘The rising cost of petrol, a two-year pay freeze, and an attack on their pensions are all making nurses feel the pinch every day,' he added.
Unison general secretary Dave Prentis said the introduction of local pay would mean £1.7 billion was lost from the economy. ‘Taking money out of the pockets of hard working people will starve local shops, cafes and businesses out of much needed revenue sending the economy further downwards.'