25 May 2021

The ethnicity pay gap in the NHS and Agenda for Change

Pamela Enderby can almost certainly lay claim to being a key catalyst to one of the most radical overhauls in the NHS pay system since the inception of the service. In 1986, as then head of the Frenchay District speech therapy service, Prof Enderby argued that her and colleagues’ work as speech therapists (who were mainly women) was of equal value to that of clinical psychologists (who were mainly men). Frenchay Health Authority argued that the separate bargaining of pay between speech therapists and clinical psychologists justified the pay gap.

Enderby and her co-applicants eventually won their case and, with the government facing the prospect of a huge compensation bill and further cases, in 1999 a white paper was published outlining a new approach to pay and grading in the NHS, called Agenda for Change.

Agenda for Change – adopted by the NHS in 2004 and covering nearly 90% of staff – embodies a broad set of equalities at its heart, including fairness regardless of ethnic or national origin.

So, with equal pay at its heart, how has Agenda for Change performed? In particular, how has it helped with differences in pay across the NHS’s ethnically diverse workforce?

What we found

Our work on pay equity suggests that across nine in 10 NHS staff, there is no significant pay gap between the median basic pay of White NHS staff versus all Black and minority ethnic staff taken together.

But for those such as the NHS Race and Health Observatory who analyse in more detail the challenges facing people from Black and minority ethnic backgrounds in the health service, this overall pay gap comparison needs to be taken with a pinch of salt. The first thing to note is that ethnicity pay gap is not a measure or proxy for career progression. WRES data, specifically indicators 1, 2 and 7 show that staff from Black and minority ethnic background are disproportionally less likely to be in senior positions, less likely to be appointed from shortlisting and less likely to believe that their organisations provide equal opportunities for career progression.

The ethnicity pay gap also lumps all the different ethnic groups together, despite the variation in pay that may exist between each of them, and secondly because it includes diverse occupational groups, from healthcare assistants to senior scientists.

The pay gap looks different for staff on Agenda for Change terms and conditions from the point of view of separate ethnic groups. For example, while there is a small pay gap (equivalent to £13 per month) in favour of Asian/Asian British staff compared to White staff, for mixed heritage staff the pay gap is £117 per month in favour of White staff.

And if we focus on different staff and separate ethnic groups, we have found that White staff earn around 9% more than Black/Black British nursing staff and nearly 11% more than Asian/British Asian managers.

A key structural aspect of Agenda for Change is the banding of pay into 12 groups along a spine ranging from annual salaries of around £18,000 to £105,000, and into which around one million NHS staff fit. For 10 of the Agenda for Change pay bands, the median pay gap favours White staff – with the gap varying from around 0.2% to nearly 4%. For the lowest pay band, there was no significant gap.

Interestingly, for the highest pay band – which is also the band with the lowest proportion of Black and minority ethnic staff – there was also a pay gap, but in favour of Black and minority ethnic staff of just over 1%.

Although Agenda for Change covers around nine in 10 NHS staff, it doesn’t include doctors and some of the very highest paid in the NHS such as consultants. The ethnicity pay gaps for consultants, for example, shows that every minority ethnic group earned less than their White peers.

Success story?

While we lack comparative ethnic pay data for the period before Agenda for Change, a broad verdict might be that Prof Enderby’s and her co-applicants’ victory a quarter of a century ago has had a positive impact on pay equality in the NHS. But this should not distract from the fact that for some Black and minority ethnic staff within some occupational groups there exist pay gaps favouring White staff. Despite the progress made, this reiterates that there is still room for improvement when it comes to the pay of certain Black and minority ethnic NHS staff.

Going beyond the numbers and statistics to understanding the extent to which these gaps are driven by discrimination in individual grading or general career opportunities will be important in building on Agenda for Change.

Prof John Appleby is the Director of Research and Chief Economist at the Nuffield Trust, board member of the NHS Race and Health Observatory, and co-author of new research looking at the ethnicity pay gap in the English NHS.