Equal Opportunities Committee, 22 Sep 2009

Meeting date: Tuesday, September 22, 2009

Official Report 259KB pdf

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Budget Process 2010-11

Our second item is a round-table discussion on the Scottish Government's draft budget for 2010-11, focusing on the issue of equal pay in the national health service. In a minute, I will go round the room asking everyone to introduce themselves. First, however, it is worth pointing out that although this is a public meeting and a transcript will be produced, the idea is to have a more informal evidence session. The committee feels that that is a better approach, as it results in more relevant information coming forward. It is worth stressing the point at the beginning: we are in public, and there will be a transcript, but the session is more informal in nature. The committee will take further evidence on equal pay in the NHS from Nicola Sturgeon, the Cabinet Secretary for Health and Wellbeing, at our next meeting, on 6 October.

We will start with introductions. I am the convener of the Equal Opportunities Committee.

I am clerk to the committee.

I am budget adviser to the committee.

I am assistant clerk to the committee.

I am director of audit services for health and central Government at Audit Scotland.

I am a member of the committee.

I am project manager with Close the Gap.

I am a member of the committee.

I am parliamentary manager for the Equality and Human Rights Commission.

I am a member of the committee.

I am director of finance at NHS Dumfries and Galloway.

I am a member of the committee and I represent Kilmarnock and Loudoun.

I am director of human resources with NHS Greater Glasgow and Clyde.

I am professional officer for the Royal College of Nursing.

I am a member of the committee.

I am head of bargaining and equality for Unison Scotland.

I am a member of the committee.

I am a member of the committee.

Thank you.

To set the scene, I will ask a general question. Are there still different types of equal pay claims? If so, how many of each type are there—by gender and, if possible, according to geography?

We still have 12,600 equal pay claims in the system, which are split with roughly two thirds coming from trade unions and the other third from one contingency fee solicitor. The trade union claims vary. They come from various trade unions, represented by Thompsons Solicitors. I do not have the exact number, but the vast majority of the claims are from women; a very small number of claims come from males. The split between post-implementation and pre-implementation of agenda for change has not been clarified, because the cases have not yet gone to tribunal.

That is helpful. Is anyone in a position to indicate how cases are distributed geographically?

I can provide the committee with some information. The geography is varied. In NHS Greater Glasgow and Clyde, Ian Reid has the privilege of having by far the largest number of cases—certainly of Unison cases. Unison has the best part of 9,000 cases, and therefore has the majority of cases that have been lodged, of which about a third are in NHS Greater Glasgow and Clyde. There are also significant numbers in NHS Lothian and NHS Lanarkshire. There are small numbers in most other health board areas, but in a couple there is none. There is a considerable spread.

Ian Reid is right to say that most of the claims are for women; a small number are for men. I do not have the exact figures with me, but we could get that information if the committee thinks that it is important. The trade union claims are exclusively for back pay. They are not forward-looking equal pay claims of the sort that have arisen in local government or that were linked to the challenge to agenda for change and whether it was an equality-proofed job evaluation scheme. I understand that some such cases may still be lodged by the no-win, no-fee solicitor but that some are also in the process of being withdrawn. The committee will have to get clarification of the situation elsewhere.

Your comments are helpful. I have a big question: is there a timetable for resolution of the cases?

That is a big question.

So the answer is no.

The next management discussion in the tribunals is on 2 October. It follows the Hartley decision in England, so it may become clearer afterwards how the tribunals wish to dispose of the claims.

I would like to tease out further why we do not appear to be making much progress. What are the key stumbling blocks to a fixed timetable? Emma Ritch has an overview of the situation. Can you explain the lack of progress?

Close the Gap cannot comment on the issue.

Is anyone else in a position to indicate what the stumbling blocks may be? If not, we will progress with our questioning and try to tease out the answer at the end of the discussion.

Unison has raised the issue regularly with health service employers in Scotland and at UK level. As part of my role as head of bargaining in Unison, I am the staff-side chair of the NHS bargaining mechanism in Scotland. Equal pay is a standing item on that committee's agenda, and it has been ever since I became a member, and we note it at every meeting.

Part of the difficulty is that there has been a view that, because agenda for change is a UK-wide agreement, resolution needs at least to refer to what is happening south of the border. I am aware that the Cabinet Secretary for Health and Wellbeing also wanted some indication of the direction in which litigation was going.

I am fairly confident that I speak for all the trade unions when I say that Unison is keen to move to a settlement of the cases, which have been outstanding for a long time and are the elephant in the corner of the room. There is a great deal of information, which I am sure members of the committee will have considered, about the difficulty of quantifying the costs, which are the big concern. I fully understand that. I do not doubt our ability to quantify those costs, but I am conscious of the fact that, until we do so, the issue will remain a big stumbling block. We must move beyond that. Like all of us, I am keen to see a resolution, not least because I think that it will turn out to be like waiting to see the dentist—I am mixing metaphors all over the place—in that, once we get down to dealing with the issue, it will not be quite as bad as speculation has suggested.

Glyn Hawker has summed up how employers view the position. We have always been part of the UK pay system, so we are reluctant to move outwith the UK position. We have also been waiting to see what the litigation process brings, because of the challenge to the equal pay provisions of agenda for change.

It is important to say that through the tribunal process, both parties have co-operated and exchanged information. There has been no need for formal requests for information. The relationship between the two sides in the tribunal process has been amicable so far.

I want to ask about the disproportionate number of claims in Scotland compared with England. With hindsight, could steps have been taken to reduce the large number of claims in Scotland by conciliation and other means? What steps are now being taken, if any, to mitigate new claims?

Would anyone like to lead off with that?

I would.

Glyn, it is your show today.

The biggest factor in mitigating further claims is the fact that agenda for change has been implemented, and we are now coming up against time bars. There is the potential for very few further back-pay claims like those that were submitted prior to agenda for change.

I could be flippant and say that the reason for the higher number of claims in Scotland is that perhaps more trade unionists in Scotland read their trade union journals than do their counterparts south of the border. Unison fairly publicly advertised to our members that they might be able to make an equal pay claim, and we made it fairly simple for them to register an interest. As I said, they responded patchily: in some areas there is a high number of claims, largely because people were encouraged to identify whether they might have a claim. Some of the other trade unions, and indeed some people in our areas, have said that agenda for change has fixed issues for them and they do not want to proceed with any claims.

I am not sure whether we could have mitigated the number of cases. We publicised the fact that there was the potential to make a claim, but that was all, and it remains. I am sure that we will come on to a more detailed discussion about the nature of those cases and how to quantify them. However, there is a big difference between saying, "I think I might have an equal pay claim," and receiving a cheque, however many months or years down the line, for tuppence, £2,000 or whatever. At this stage, we have lots of cases and a fairly good indication within Unison about what they are worth, but we need a solution.

The Hartley test case was referred to. Does Unison know how many of its cases relate to pre agenda for change? How many are post agenda for change? Do we know more generally what proportion of the claims are pre agenda for change?

All of them.

Does that mean that post agenda for change there were claims related to agenda for change? Have all the claims post agenda for change been withdrawn or just the Unison ones?

Unison has never had any such claims. We have always been entirely confident that agenda for change stands up as an equality-proofed job evaluation scheme.

So all your 9,000 cases are pre agenda for change. Do we know about the other 3,000 or so?

My understanding of the position in England is that the contingency fee solicitor wrote to all the people whom he was representing to indicate that he was not prepared to represent them on a contingency fee basis any longer, which might impact on the number of claims in England. We understand that he has not done the same in Scotland, so we do not know whether the 3,000 contingency fee claims will continue or will be withdrawn. As I say, as far as we can tell, the contingency fee solicitor has not adopted the same position in Scotland as he has in England.

I am not speaking on behalf of the contingency fee lawyer, but I have seen a letter to the Scottish clients that says exactly that.

We will try to pursue that.

The contingency fee lawyer is withdrawing as the representative of those cases and is not offering the same as he did to his English clients, which was, "If you pay me some money I will continue to represent you." The representation is being withdrawn in Scotland but individuals will still be free to pursue their own claims. We do not know how many will do so, but, as far as the numbers are concerned, I anticipate that claims will be withdrawn on the back of the Hartley decision.

It is good to have that clarification. It seemed logical that the same action would follow here. Let us move on.

Since agenda for change was introduced, has the NHS in Scotland evaluated the jobs that are most commonly subject to change? Have other comparators been brought in?

We have not undertaken a further evaluation, but we have been moving through the implementation of agenda for change over the past four years. NHS posts were only recently evaluated, and the outcomes were finalised at the end of last year. We are now going through a review process with individuals who are unhappy with their evaluation. We have not undertaken further evaluations, other than perhaps through reviewing the posts that were evaluated upon the implementation of the scheme.

Are there many unhappy individuals?

In our board, out of about 39,000 posts that are covered by agenda for change, 7,000 staff are affected by the review process, covering around 300 or 400 jobs. Multiple people are doing jobs for which a review has been requested, therefore a number of people remain unhappy.

You imply that the reviews cover a range of jobs. Are they similar jobs or are they in very different parts of the NHS?

They are very different jobs and range across all the NHS functions. Agenda for change has a common pay spine. For example, band 6 covers numerous professions, such as allied health professions and nurses. Each review covers a range of professions, and I do not think that any particular group has a higher proportion of reviews.

Are the reviews about, for example, people who have been put in band 4 wanting to be in band 5 or even band 6?

That is correct.

Given that some of the pay claims involve a large proportion of the nursing profession, does Lynn McDowall have anything to add about the progress of the reviews?

The Royal College of Nursing does not face the same number of claims because, until a few years ago, our members predominantly were trained nurses, therefore we do not have the same issues. We have the same issues with agenda for change, though. Ian Reid's figure for the number of people who are unhappy with their agenda for change banding in NHS Greater Glasgow and Clyde is probably reflected throughout Scotland. In relation to equal pay claims, we are in the same position as the other trade unions, although we have a lot fewer members involved in such claims.

Here is where I show my ignorance. I am not sure what is meant by the phrase "contingency fee lawyer". Does that mean no win, no fee?

That is correct.

Thank you. I just wanted to clarify that.

Glyn Hawker does not think that there will be any great difficulty in quantifying costs, but you think that there might be some dispute about them. Regarding all the cases that relate to agenda for change, if we have a good idea of who they involve, what they involve and how many of them there are, will health boards be able to estimate an upper limit for the contingent liability in their 2009-10 financial statements? If not, will there be a deadline by which firm figures must be published? That will obviously be important for future budgets.

Perhaps Fiona Kordiak can comment from Audit Scotland's perspective.

Certainly. For a number of years, we have been pressing boards to quantify any potential liability and assess the probability of settlement down the line. We have been on the case for about three years, and have had extensive discussions with health board management and the Scottish Government's health directorate. This year, health board representatives and the Scottish Government were able to convince us that it was still too early to assess any likely financial liability down the line, largely because of the lack of firm comparators in a number of claims so far. I reviewed a sample of claims with the central legal office of NHS National Services Scotland and representatives from Greater Glasgow and Clyde NHS Board, and I was satisfied that it was too early to be able to quantify the claims.

In general, with any contingent liability or provision, it is fairly unusual not to be able to specify a range of potential outcomes and make a general prediction. Because of the unusual situation and high degree of uncertainty in this context, auditors this year included an explanatory paragraph in their audit opinions, in which they said that although the accounts as presented were true and fair, it was acknowledged that the issue would potentially be significant down the line. We wanted to point out to readers of the accounts that an area of uncertainty remained unresolved, which could have financial implications.

As auditors, we are concerned about accounting treatment. We were satisfied that that was appropriate this year and we accepted that it was too early to quantify claims. However, we are concerned about the financial impact down the line, which Glyn Hawker mentioned, and we are concerned about how unquantified claims that materialise in future might impact on the financial situation, particularly given the number of agenda for change appeals in the system—Ian Reid raised that issue. Provision has been made in financial statements in that regard, but as with any provision, estimates are by their nature uncertain. Given the tightening financial position and future funding and cost pressures, we are concerned about an uncosted potential liability that has not been fed into financial plans.

With respect to the people around the table who understand auditing and accounting terminology, for someone like me a couple of your comments were in less than plain English. Will you give me edited highlights in plain English, so that I can understand what you meant?

The current position is that boards have highlighted the existence of equal pay claims as a disclosure in their accounts but have not included estimates of the costs as a charge against their accounts. We normally expect that when there is a liability, a financial transfer will probably be required to settle it, the amount of which can be estimated with reasonable certainty. We have accepted that boards are not yet in a position to do that and therefore cannot account for the costs in their current financial statements. We have accepted that boards can disclose only that there is a potential liability, but that means that it is not built into financial plans.

Okay. That sounds like a ticking bomb for all concerned.

I suspect that my understanding of accountancy is no better than Hugh O'Donnell's. I understood Fiona Kordiak to say that in relation to claims, boards cannot work out the likely financial liability because they are not sure what comparator to use to enable them to work out the wage differential. Is that correct?

Yes. Also, genuine material factors other than gender might account for differences—I am probably not best placed to explain the technicalities on that.

I am not an expert on audits, so this might be a foolish question. Agenda for change set out relevant comparators. It said, "These people should be in this group, because they do a similar job." Why, therefore, cannot comparators be identified, given that agenda for change appeared to do exactly that?

You have just asked the question that we as auditors have been asking management and board representatives for the past few years. One issue that has been raised is the fact that, until recently, agenda for change was still under question. Now that the Hartley case in England has been decided, there is more certainty that agenda for change is an equality-proofed system, so that system as a whole and the job evaluation system that underpins it are no longer under question in the same way as they were previously. We now expect boards to make much more progress over the coming year in quantifying the potential liability, given that the agenda for change issue appears to have been resolved. In the 2009-10 financial statements, we will expect more progress on quantification than has so far taken place.

Does that imply that, in point of fact, quantification could have been done earlier and that the boards merely delayed it deliberately because they thought that there was a risk that they might have to do it again?

No, they did not delay it deliberately. Board representatives are better placed to answer than I am. Their view—and that of the central legal office of NHS NSS—was that there were so many areas of uncertainty that quantification was not possible. One concerned agenda for change. Another one, which is called the single-source issue, concerns whether the employer is the NHS in Scotland as a whole or individual boards. Should it be proved to be the NHS in Scotland as a whole, individuals will have a wider range of comparators against which to compare themselves than if the employer is the individual board. That has yet to be resolved.

The board representatives are better placed than I am to comment on their ability to advance quantification in the coming year.

I will bring them in, but Elaine Smith has a question first.

I was going to ask for a firmer date for the upper limits, but my question has been answered: it is obviously expected in the 2009-10 financial statements.

Although the boards have accepted that equal pay claims are on the table and that that could lead to a liability, we have not accepted that we have that liability. In the Hartley case, it was found that agenda for change is equality proofed, so we believe that there is no liability post agenda for change. Equally, pre agenda for change, we were within the UK Whitley system, which has not been tested in the courts under the current claims to ascertain whether it was unequal in some way.

Although we accept that there is a potential liability, we have not yet accepted the liability that is part of the litigation process.

If I understood Fiona Kordiak correctly, she just said that there are no national comparators and that all 14 health boards use different comparators. Is that correct?

Each individual who makes a claim for equal pay must specify comparator jobs against which they want to be compared, so comparisons are made on a case-by-case basis.

Would that normally be done within the health board or against a national benchmark?

My second point might be a little bit more difficult to get an answer to. To what extent do any of the witnesses think that the health boards have chosen not to put a figure against the contingent liability for fear of making it look as though they have a sum of money on the table that can be negotiated for?

I will answer the former point and Craig Marriott could answer the latter one.

In agenda for change, there are national profiles. When we go through job evaluation, we match a post to a national profile in the main. However, the point that has been made is that, in an equal pay claim, individuals have to pick comparators. Because health boards are separate employers under the current legislation, the comparator is within each individual health board. Had it been found in Hartley that there was one employer, which would have been the Department of Health in England, people could have used comparators from other health boards, but we are separate employers and the legislation provides that an individual can use a comparator only from within their own employer, not a cross-employer comparator.

It is worth reminding ourselves of the facts. The equality issue has not been resolved through the legal process, so no liability has been agreed. The question was asked whether we will be in a better position in 2009-10. It is extremely unlikely that there will be any change in the financial position in the current financial year, but we will not know that until the legal process is concluded and we have the details.

Is this a cart-and-horse situation? The equality issue will not be resolved until it is tested, but we seem to be a long way from a case materialising.

In some ways, it is a circular argument. We could have been asked the same question previously in relation to agenda for change, but it was not until we went through the legal process of the Hartley case that we had a resolution that identified whether there was inequality and a liability. We have to do the same thing in looking at the Whitley scenario.

That is helpful.

Paragraph 20 of Unison's submission is helpful on the matter. I accept that the comparators have to be found within the same area, but how much variation is there in practice? Is anything that is happening in England around the Whitley council stuff relevant? Can we learn anything from that? Are any of those cases further advanced, or do we just have to focus on Scotland and indeed on individual health boards?

I refer back to Elaine Smith's question. Nobody can quantify the liability. All that we seem to be able to get from the evidence so far is the comment in Unison's submission that at least the claim values will be lower than in local government. Is that about it as far as any assessment of the liability is concerned?

To be honest, people ought to be extremely relieved if the cost, the complications and the amount of time that cases take are less than in local government.

The cases south of the border are no further forward in resolving whether there are equality issues. The key difference between the two nations, which is described in paragraph 20 of our submission, is that it will be much cheaper to settle the cases in Scotland than it will be south of the border. I have difficulties in explaining that to our members who have read the press reports of the equal pay decisions in the health service in Cumbria and are waiting for cheques for amounts with several noughts on the end. The issues are different for the reasons that are described in paragraph 20, which concern the history of pay and reward in the health service in Scotland. For those reasons, we cannot learn a great deal from England, which in any case is no further ahead.

On the point about the legal test and the suggestion that, as with the Hartley case, we need to wait until the legal position is resolved, I point out that the Hartley case was very different. It was a challenge to agenda for change on the ground of whether it was equality proofed. A large part of the reason why we have agenda for change in the first place is the acceptance that previously, Whitley and the variations on it had created a distortion over a number of years and there were different systems—there were nine at one point, I think. That led to a situation in which we had unequal pay in the health service and we needed to resolve that. The work that went into creating and agreeing agenda for change was done largely to ensure that there was equal pay in the health service.

We could wait until there is a legal test to prove whether any of the cases will succeed, but nobody here could put their hand on their heart and deny that many of the back-pay cases will succeed in some way, shape or form. We could run to the wire with a legal debate, but the outcome will be what we already know—that there was discrimination in health service pay systems before agenda for change. That is why we have the scheme. Unison's view is that, if we have to go to litigation, we will do so. It is taking a long time to resolve the matter. A number of people who worked in the health service, particularly women, are owed money, but a number of them will die or retire without seeing the benefits. That is not fair.

On moving forward to resolve the matter, I appreciate that our discussion is about the impact on health service budgets, but budgets and costings are about a lot more than money. For the wellbeing of the health service and its workforce, I would like us to resolve the issue. One way in which we are seeking to do that is by settlement but, as I said, if need be, we will go the route of litigation.

One argument that Unison is running with is the single source argument—that the health service in Scotland is a single employer. I will not run through the legal arguments supporting or denying that, but part of our argument is that, for the purposes of identifying comparators, there is one employer in the health service in Scotland. The defence against that is that there are different health boards. If we want to be complicated and really screw things up and keep cases in the courts for years, we can try to identify when various mergers and changes in the health service took place and tie everybody up in knots. All that means is that a number of women and a smaller number of men in the health service are not getting what they are owed, and that is not fair.

There appears to be a fairness issue, which is why the committee is interested in the subject in the first place. Fiona Kordiak said that Audit Scotland has been examining the issue for three years and has expressed concerns about it. Does Audit Scotland have no tools that it can use to force the hand of the boards? Agenda for change has been decided, but Craig Marriott told us that, even so, realistically the situation will not change during the 2009-10 financial year. At what point does Audit Scotland say that agenda for change is on-going and that we could use certain comparators in an experimental way, just to have something, and to force the hand of the boards? There is a huge liability that is, at present, unquantified.

The first point to stress is that auditors have no powers of enforcement—we simply have powers of reporting. In this year's audit opinions for the boards that have a significant number of claims, the auditors included an explanatory paragraph on the issue, which was us upping the ante and the reporting of the issue again—it is the third year in which that has happened. The matter has also been referred to in our NHS overview report for the past two years, and it will probably be referred to in this year's overview report. That is a very public document on which the Public Audit Committee generally takes evidence. Each external auditor makes an annual audit report on each board, and those reports are available on Audit Scotland's website, so there is a degree of publicity and public awareness of the issue.

Auditors will certainly press for further quantification this year, along the lines that you describe. The boards do not accept yet that there is a liability, but a contingent liability reflects the uncertainty over whether a financial transfer of benefits will be required, resulting in a cost in the end. The uncertainty does not mean that the likely or possible outcomes should not be estimated. Although there is a degree of uncertainty, which means that the sums cannot be accounted for in the accounts, they should be quantified and disclosed and plans should be made to deal with the financial cost in the worst-case scenario. Given that the Hartley case has been and gone, auditors will look for further progress on the identification of comparators and estimating the likely costs for 2009-10.

Who takes charge on the issue? The statements that Audit Scotland has made are disturbing. Who takes cognisance of the issue and says that we need to do something about it? I can understand where the boards are coming from, but surely there must be another authority that is considering the issue. There is a fairness issue and certainly a worrying financial issue. Who takes responsibility? Can anyone answer that? Perhaps even Euan Page might like to comment.

Hugely—thank you, convener. I can comment only on the regulatory role that the Equality and Human Rights Commission has in the issue. As a generic point, it has not been indicated to us, through contact to our helpline or through discussion with stakeholders or other discussions, that significant problems are coming forth from the implementation of agenda for change. The problems that other panel members have ably discussed relate to back pay and other issues.

I am not sure that I entirely grasp the thrust of your question. Why would the commission—

We have a problem. Not everyone admits that there is a problem, but a sizeable number of people do. I think that Audit Scotland has said that there is a contingent liability because we do not know how many cases will be successful or how much they will cost. Glyn Hawker said that there is a time-bar issue and that some people—women, disproportionately—might die and never have their case settled. Does the Equality and Human Rights Commission have a view on that?

There is undoubtedly a fairness issue, as the unequal pay issue disproportionately affects women. I will make broad points that might help to inform the discussion.

First, as members will be aware, the Equality and Human Rights Commission is undertaking enforcement work under section 31 of the Equality Act 2006 and considering the Scottish Government's equality impact assessments of various aspects of policy, including the patient experience programme in NHS Scotland. It is considering the Scottish Government's undertaking of equality impact assessments, but I would be surprised if that is not focusing minds in boards. I am sure that my colleagues around the table will have more to say about that.

My second point goes back to your query about leadership. Ultimately, leadership must come from the centre—from the Government. The gender equality duty and the disability equality duty were designed in Scotland and ratified by the Scottish Parliament, and specific Scottish codes of practice and guidance sit underneath them. Information exists, and public authorities' legal requirements are clear. As part of the process, there is a job for the Government in setting the tone in discussions and leading. That is partly why the commission undertook the section 31 assessment work. We wanted to consider issues relating to leadership and setting the national agenda. Patient experience is different from what we are discussing, but lessons can be carried across. The same principles to do with how financial decisions are equality impact assessed are involved.

That is helpful.

I would like a brief clarification on the single source argument. I would have thought—perhaps from a position of ignorance—that jobs are pretty much the same in all NHS boards, because boards all provide more or less the same service, although I understand that there will be exceptions. If that is the case, I presume that it does not matter whether there are national comparators, because comparable jobs would be found, unless, of course, jobs in different NHS boards are being paid at different rates. Will you clarify the position?

Most people recognise that porters, nurses or whoever in different health boards do the same jobs and have broadly the same salaries, but there are variations. Having a single source or a single employer certainly makes it easier to identify comparators and to look across a timeframe. The fact that health boards have merged, changed and developed over the years from primary and acute services to the unitary boards that we now have has been linked into that argument. However, you are right. It should be possible to identify comparators for the vast majority of jobs within health boards, but some jobs are fairly unique. Boards have autonomy to establish their own posts.

That is what I thought. Roughly what percentage of the 7,000 people—I do not know whether I scribbled the figure down correctly—would you have difficulty finding comparators for? That takes us back to the ability to estimate costs. If it is difficult to find comparators, because of the single source argument, in only a very small percentage of cases—say 10 per cent of the 7,000 cases—it cannot be too difficult to estimate the costs.

Unison has a figure of nearly 9,000 cases.

I am sorry; I was using the NHS figure.

Yes—the 7,000 appeals.

Unison has put a lot of work into identifying comparators, and I am fairly confident that the other trade unions have done so as well. We could probably come much closer, as I said earlier, to estimating how many claims would succeed and at which level. That information exists, but it is still not perfect. It has taken a long time to get to this point—we have been on the journey for some time—but we are now much closer to an outcome.

On a point of clarification, it is accepted post-Hartley that agenda for change is equality proofed, so the comparators relate to the pre-2004 period, before agenda for change was implemented.

Can you give me a rough estimate of how many of the 7,000 cases you cannot find clear comparators for?

The specific comparators for the individual claims have not been identified. That point is being debated at tribunal—there is an on-going exchange of information to identify the comparators for the pre-2004 claims, as it is necessary to identify a specific post and a specific individual.

Is it fair to say that you could use the principle without going into the specifics? There is a way round it.

That could be attempted, but the experience in England shows that it is immensely difficult to quantify the liability with regard to the outcomes of the cases.

I will move on in strict order, as Bill Wilson has shuffled the deckchairs. I call Bill Kidd.

Everything that I was going to ask has been answered.

I was just saving you the effort.

However, the answers are not to my satisfaction. There is not enough co-operation between the health boards and NHS Scotland in trying to sort the issue out. It has been going on for years and, as Glyn Hawker said, the people who are at the lowest end are those who suffer the most in terms of discrimination. The fact that people will be retired or even dead by the time the matter is resolved should light a fire under the people who are supposed to be making these decisions. If any case has been resolved, enough resources should be put in to ensure that all the cases will be resolved well before the time limit.

Given Unison's major involvement in the matter, I draw the committee's attention to the fact that the union appears in my entry in the register of interests.

I have reached the stage of, "Confused? You will be." Perhaps I am missing something, but the issue is surely about common sense, which, to follow on from Bill Kidd's point, seems to be missing.

As I understand it, agenda for change adjusted everyone's pay, and the Hartley court case clarified that it is a fair system. I assume—perhaps wrongly—that agenda for change adjusted certain occupations to put them on a similar scale. We know that many people think that the previous system was not fair: for example, that there were gender equality issues in relation to pay, with nurses, who are mostly women, at a certain grade being paid less than senior technicians, who are mostly men, at the same grade. The women were being paid less than the men for work that was of equal value.

From the round-table discussion, it seems that a lot of money will be spent by individual boards and by the health service as a whole in fighting court cases. Scotland would be better off and would save money if someone—perhaps the minister—could get all parties around a table and could take a common-sense approach in relation to the grades that have now been adjusted and the comparison of groups of people in order to sort the matter out.

Lynn McDowall had indicated that she wanted to comment, but it would be useful to get Emma Ritch's perspective.

My point is about the clarity of boards' responsibility to meet the requirements of the gender equality duty, because that is the issue on which Close the Gap has intervened most with regard to equal pay. During the roll-out of the gender equality duty, we were approached by a number of health boards because we had written guidance specifically on the equal pay duty in Scotland. They asked us what they required to do in producing an equal pay statement and developing an equal pay objective as part of the gender equality scheme. At the same time, the central legal office produced a draft equal pay statement, which we felt was not as strong as others that had been produced across the public sector. By and large, all health boards produced equal pay statements in response to the requirement.

We recently became aware that the central legal office had issued guidance to at least one health board—we assume that it did so to more—advising it not to carry out an equal pay review because of the continuing litigation around agenda for change. That is extremely disappointing because, in our opinion, equal pay reviews are the only way to ensure compliance with the requirement of the gender equality duty and the only way to pick up issues to do with occupational segregation which, as I am sure the committee is aware, is one of the gender equality priorities that Scottish ministers have identified to be addressed across the public sector.

We are disappointed that that view has been taken. Glyn Hawker made the point about the drift away from the Whitley arrangements. We are concerned that if there is not a robust equal pay review process in place across all health boards, following on from agenda for change, it is possible that some inequalities might start to creep in. We are keen for health boards to take up the challenge of carrying out pay reviews, as NHS 24 has done. It carried out a pay review on gender last year and this year will carry out one on gender, age and race. We would like to flag that up as an example of good practice.

Emma Ritch is absolutely right—there needs to be an on-going mechanism. I am confident that the relationships that exist between the staff side and the employers in the health service in Scotland will facilitate that process. Ian Reid made the point that we have not quite implemented agenda for change first time round, but the need for us to keep on top of the scheme and to maintain it has certainly been discussed. The staff council has custodial responsibility for the UK scheme and is already updating the agenda for change handbook. We need to ensure that we continue to review.

I am less concerned about the situation in the mainstream boards. You will see from our submission that we have flagged up issues to do with private contractors, whose standards have not been anything like as high as those in the public sector. We have had some difficulties with people not being as scrupulous. It is an issue that Unison wants to keep an eye on. We have far fewer private contractors in the health service in Scotland than there are south of the border; the same is true in relation to local government here.

However, I am concerned that, as finances become tighter, which they will, the same drift towards contracting out that there has been in local government will occur in the health service. The work that is contracted out tends to be women's work, which is lower-paid work. That could be used as a means of deflating women's salaries and bringing back unequal pay. The existence of different employers raises the issue of being able to identify comparators—those who work for a different employer cannot. I have concerns about that; it is certainly an issue that we want to keep a close eye on in the context of the health service in Scotland. As far as the maintenance of an equality-proofed agenda for change scheme by the mainstream employers is concerned, I do not have too many difficulties. I think that we will put that in place.

To return to the point that Elaine Smith made, as far as I am concerned, it is an issue of common sense. I said that there was an elephant in the corner. We need to know whether it is a mummy elephant, a daddy elephant or a baby elephant. We do not know at the moment. I am fairly confident that we are not talking about a whole herd of elephants, but I know that some of my colleagues are worried about that prospect. It seems to me that we are spending effort worrying when we could sit down with a calculator and a pen and paper, do some sums and get a better idea of the situation. If we are not in a position to get the full picture, we are in a position to obtain some fairly clear indications about what the outcomes are. I take Ian Reid's point about there being difficulty quantifying the sums south of the border but, as we said in our submission, the issues in Scotland are different from those south of the border. The situation is much simpler here, and it would be much less expensive, because we have done other stuff in the past to improve the lot of low-paid workers, who are, predominantly, women.

I am conscious that I am speaking a lot—having 9,000 cases, I have quite a lot to speak about.

The legislation says that we need to identify comparators for the back-pay claims for the situation pre-2004, but it is not good enough simply to say that the agenda for change grades are now the comparators, because they do not tie up automatically. Some of them might be the same, but the tribunal has made it clear that we need to compare on the same timeframe as well. It is possible to do that. We often point out that someone who cleans floors and is a woman is called a cleaner and gets paid at a certain level, and someone who cleans walls and is a bloke is called a technical operative and gets paid more. Agenda for change should have sorted out the fact that, if you wield a mop and a bucket, you are a cleaner, and the comparability that exists between cleaners should make things fairly straightforward.

The issue comes down to common sense and fairness. However, sometimes common sense and fairness cost money. I am not playing down the fact that the proposal will be expensive, but I do not think that it will be as expensive as it might be, and I think that other costs will mount up if we continue to let the situation go unresolved.

Glyn Hawker has covered the point that I was going to make. Health boards, which are about to complete the review process, are conscious of the requirement for equal pay audits. NHS Greater Glasgow and Clyde is looking at the outcomes of agenda for change in terms of gender balance.

I am never optimistic when people make appeals to common sense, as I have found it to be less common than we might expect.

Mr Page, do the financial processes that health boards engage in comply with public sector equality duties? In the—I hope—unlikely event that we go down the route of subcontracting to private contractors, would the primary contractor have responsibility for ensuring that the subcontractor complied with the equality duties?

On the first point, as we have said already, there is no reason why there should not be clarity. The gender equality duty has been in force since 2007, and documentation such as the public sector duty assessment toolkit clearly sets out who is covered by that specific duty in Scotland. There is also a Scottish code of practice and guidance. As Emma Ritch indicated, what statute says and what is happening in reality do not always match. The EHRC is aware that there might be concerns about, for example, ambiguity around or unhelpful comments about equal pay statements.

On contracting out services, I hope you will forgive me if I do not give you a definitive answer. My colleague, Muriel Robison, whom some of you know, is best placed to deal with that question but, ironically, she is at a meeting today on the equal pay provisions in the new Equality Bill.

The principle behind public sector equality duties is that someone who is carrying out services with a public function is still covered by the duties. That said, there are concerns around procurement, which are being addressed through the Equality Bill. Again, the EHRC is concerned about that area.

As Glyn Hawker and others have said, the issue around reaching a settlement on the outstanding claims is, to an extent, a sideshow to the more substantive concerns around boards' understanding of the requirements of the statutory equality duties.

I can ask Muriel Robison to get back to the committee in writing to explore those issues a wee bit further.

That would be helpful.

I am reassured by the fact that the health boards propose to ignore the advice of their central legal office not to carry out equal pay reviews. I think that that will be helpful going forward. Employers across the public sector frequently ask us about the Equality and Human Rights Commission's compliance role. In essence, they are looking to do a kind of risk management; for them, the bottom line is what the commission will do to them if they do not undertake an equal pay review, comply with the duty or take the advice of Close the Gap and others to produce equal pay statements and objectives for their gender equality schemes. I am not sure that the answer is as clear as Euan Page suggested. It would be helpful to have clarity on some of the commission's compliance functions for those of us who go out to employers and try to make clear the requirements of the duty and the possible consequences of not meeting those.

I will give Euan Page the right of reply before I bring in Bill Wilson.

I take Emma Ritch's point. It is important to separate the requirements of the gender equality duty and of the other statutory equality duties from the commission's enforcement role. I will make two points. First, without sounding too pompous, there is an important philosophical issue about the policy intention behind the statutory equality duties. If people approach them from a compliance perspective—crudely, what is the bare minimum that we need to do to avoid getting done?—their outcomes will fit that approach. The thrust and thinking behind all the statutory equality duties—and, I believe, the single duty that is currently before the Westminster Parliament as part of the Equality Bill—are that the duties are a bit more positive than that, because they try to get away from the compliance-led model in which the commission says what people must do to avoid coming to its attention. A more positive reading of the duties is that they are a tool to aid better decision making and policy making. It is important that we try to get beyond the idea that the duties are only a set of legal hurdles for public authorities and have no direct impact on their day-to-day business. Rather, the duties should be woven through all public authorities' processes and decision-making procedures.

Secondly, on greater clarity about the commission's enforcement role, the commission has a range of enforcement options open to it. In relation to Emma Ritch's point, it may be helpful for me to point out that we have been developing a public sector duty assessment toolkit that is a rigorous and, I hope, clear method of gauging the appropriate steps to take when possible breaches of the duties have been identified. That toolkit is not public yet, but we anticipate that it will be shortly. When it is, it might be useful for us to send it round the committee and ensure that Emma Ritch is aware of it as well. If she would like to talk to commission colleagues who have been working on the toolkit, I would be more than happy to arrange that.

On your earlier point that one volunteer is worth 10 conscripts, I think that you are saying that, rather than going in heavy handed, it is better to try to make people work with you. However, equal pay claims have been in the pipeline for five years, and Audit Scotland has highlighted the issue for three years. At what point does the commission come in and not just tell everybody that there is a breach, which we already know, but do something about it and use its powers to best effect?

I return to my earlier point about the learning that we can garner from the enforcement work that we are undertaking. The principle underlying how we best apply equality impact assessments is the same, whether we are looking at equal pay, patient experience or whatever. We are already undertaking enforcement work by looking at the Scottish Government's performance on EqIA in one area of the health service, and we fully expect the learning from that to be applied.

The wider point is that, over and above the opportunities that exist to take individual cases or to take enforcement action under the equality duties, common sense dictates that there is a consensus—or, at least, a potential consensus—that the best way forward is to move towards settlement. As the Local Government and Communities Committee said in its report on equal pay in local government, an approach that is predominantly litigious closes down opportunities to reach compromise and forge a consensus.

As an observer as well as a participant in today's discussion, I feel that we are most of the way towards achieving a consensus—if it can be grasped. The commission will be happy to play its role in that, although whether the most helpful role that it could play is one of enforcement remains to be seen. As I say, enforcement work is on-going, and the lessons from that can be applied when the findings of that work are published next spring.

I would like to clarify something. You said that private companies that have accepted contracted-out work would be covered by the public sector equality duties. Someone cited the example of cleaners. If cleaning has been contracted out and the cleaners are now working for a private company, who is their comparator? Is the comparator selected from within the NHS or is it selected from within the private company?

I am happy to get back to you in writing on that. There are valid concerns that contracting out will mean that a disproportionate hit will be taken by lower-paid women workers in the NHS in Scotland. However, I would prefer to get back you to in writing on that.

An agreement with the Scottish Government that was signed by employers and trade unions in 2007 provides that contractors should pay their staff agenda for change terms. There is, therefore, an agreement in place in Scotland, which boards are still using. There is also far less contracting out now, given the Scottish Government's policy position; nevertheless, there is an agreement in place to cover the issue.

Does that mean that the comparator for contracted workers would be within the NHS as a whole?

No. They would still be employed by separate employers.

So, the comparator would be with other workers within the private company.

Yes.

Yes. Once an entity has become a private company, if somebody is looking for a comparator they must find it within that employer. Equality duties come into play when the contract is established.

Ian Reid is absolutely right that there is an agreement that says that staff should be paid agenda for change terms and conditions if the work is contracted out. However, when we look at total reward packages, as we often do, we are concerned that reducing the costs attached to the contract is often seen as a way of saving money. That is when the gender equality duty should be used to assess the impact on the workforce of moving a piece of work from a mainstream employer to a private contractor or third sector organisation, such as a community or voluntary sector body, which sometimes happens. That is when the assessment should be made, and the responsibility for that sits with the health employer that is contracting out the work. However, once that contract is shifted, responsibility moves into the private company.

I would like to tease out the relationship that exists between the Scottish Government health directorates, NHS Scotland, the equal pay unit that was established in response to NHS Scotland's realisation that there were grievances about equal pay in the NHS, and the central legal office. My understanding is that NHS Scotland is at arm's length from the health directorates and that the central legal office takes advice from the equal pay unit and advises individual boards. What is the role of NHS Scotland? Is it an advocate for fairness and equal pay? How close is it to the Government? That is not clear from the papers that I have seen.

Employment regulations are provided to each NHS board under direction from the cabinet secretary. Equal pay is the responsibility of NHS boards because of the equality duty that applies to them. The equal pay unit was established to lead a co-ordinated response from each NHS board to the litigation that was going through the courts. The CLO is the legal adviser to NHS boards, not to the Scottish Government.

It is also the legal adviser to the equal pay unit.

Yes. The equal pay unit is part of NHS National Services Scotland, not the Scottish Government.

So it is arguable that if NHS Scotland felt that there was a problem, it should say to the directorates, "We think something needs to be fixed here."

Yes, but that brings us back to my original point: although we accept that there are claims, we do not currently accept the liability that is being put on the table.

It has been useful to tease out some of those issues.

Can I clarify that the central legal office people have advised boards not to engage in equal pay reviews?

The extant advice on equal pay audits was not to conclude them until the conclusion of the implementation of agenda for change. Now that boards are completing the review process and everyone will be fixed on the agenda for change agreement at some point, boards will be expected to do equal pay audits. It is not that we were advised not to do them at all; it is that we were advised not to do them during the implementation of agenda for change.

But if there is a debate about the implementation of agenda for change, it could kick equal pay audits into even longer grass than seems to have happened already.

Post-Hartley, the view is that agenda for change is equality proofed and that therefore there is no barrier to boards undertaking equal pay audits.

We move on to a more general perspective.

It certainly sounds as though a cottage industry has sprung up around this and established itself over several years.

Will colleagues round the table offer us a perspective on whether other sectors are dealing with equal pay claims faster, leaner or better than might be the case in the NHS and local government? Are there any lessons that we might learn?

The answer is no; there are not large numbers of equal pay claims anywhere other than in local government and health, although there are some claims among other public sector employers in Scotland. For example, there have been numerous claims in what used to be called the careers service—I cannot remember what it is called now; it seems to change its name every couple of months. Some of the other non-departmental public bodies have looked at job evaluation schemes during the process of implementation. The higher education sector has been through a similar job evaluation process called the framework agreement and a small number of cases have arisen there. Some cases have been resolved on the basis that they are about back pay and the employers have made a decision that they want to clear the decks and get things out of the way. However, the numbers are tiny compared with those in local government and the health service.

I note that the committee paper also asks whether local government can learn anything from agenda for change. The answer is, "Only if we can rewrite history." Agenda for change is a UK-wide scheme that has been applied to everybody. Implementation is local, there have been some local variations and there has been some local unhappiness, as Ian Reid described. Nonetheless, everybody understands what agenda for change is, it has been applied across the board and we have one common set of terms and conditions for millions of people who work in the health service throughout Britain. That is its absolute strength, as far as the equal pay scheme is concerned.

Looking to the future, we are well placed provided that we recognise that the scheme must be dynamic, in a state of constant change and that we work to take it forward as we have done in the past.

I have never understood why 32 councils wanted to take the single status agreement and come up with their own variations on it. We are paying the price for that in local government. The health service is much better placed. We have a full stop, which is agenda for change. Historical problems that date from prior to agenda for change remain, but once we have sorted out the back-pay issue, provided that we use the available tools—the gender equality duty and the partnership arrangements that are in place between the staff side and the health service—there is much that agenda for change and the way that the health service operates in Scotland can show to others who are engaged in the process, and will be for some time to come, or to those who are thinking about tackling the issue. They could do a lot worse than to come knocking on the door of the people who operate agenda for change and saying, "Tell us how you do it."

To be absolutely clear, can I take it that advice to individual health boards from the central legal office is that there is not a case to answer?

Yes.

It is for us to tease out with the Cabinet Secretary for Health and Wellbeing how all those pieces fit together.

Malcolm Chisholm has one last general question.

Agenda for change staff are obviously the majority of staff in the health service. However, as we know, senior managers, doctors and dentists have their own arrangements, which are not without controversy in some ways. Have any equal pay issues been raised around the agreements for the staff who are not part of agenda for change?

No. In NHS Greater Glasgow and Clyde—I am sure that the situation is the same for other boards—there have been no equal pay claims in relation to the pay arrangements for the other staff groups.

Ian Reid is right that nothing has been raised formally and no claims have been lodged.

Unison is involved in the process as far as the arrangements for senior managers are concerned and a review of senior management pay is being undertaken. We have said that we want equal pay to be considered as part of that process to ensure that no issues arise. No issues have been raised by doctors and dentists, but I have less confidence about that because I view the arrangements as less clear; they are certainly not transparent in the way that the agenda for change agreement is. We are directly involved in the arrangements for senior managers, so I can be more confident that if we have concerns they have been raised and will be addressed.

I do not know of anything specific regarding the arrangements for doctors and dentists, but I would always want to be in a position to monitor the situation and raise any concerns. As soon as there are differences, but also similarities, people who are working together start to consider what they get paid for what they do. Difficulties will arise from all that when there are three different sets of pay arrangements, but no equal pay claims are being dealt with at present.

You mentioned doctors and dentists. What about staff who are employed in primary care services by doctors and dentists, such as dental nurses or a team of receptionists? Are they the employees of the practice or of the health board?

Both.

In which case, against what comparators are they measured? Is that done within the single practice employment structure or by comparison with another practice somewhere that is of a similar size and has a similar caseload?

It varies, to be honest. Some staff in general practitioner practices are directly employed by the health service; as such, they are on agenda for change terms and conditions and are straightforwardly part of whichever health board they work for.

However, a number of GP practices employ their own staff. There is a code of practice, or guidance—I cannot remember exactly what it is called; Ian Reid will know better than I do—that tells those GPs what the health service would like them to do, but they do not have to follow it. Those GPs are private sector employers and the issues that we discussed in respect of private sector employers apply; staff are employed on less-than-good terms and conditions because the code of practice or guidance is advisory. In such circumstances, staff would have to identify the comparators from among the employees of that particular employer, who may employ only a small number of people. If there is only one receptionist, there is no comparator.

The situation varies, but I am sure that you can imagine that Unison much prefers people to be directly employed by the health service.

Thanks for that clarification.

We have campaigned for quite a long time to encourage GPs to employ their staff under agenda for change, which provides not just for pay but for other factors that are beneficial to staff. To date, we have not had much success with that. As Glyn Hawker said, what people are paid varies a lot across different practices. However, the agenda-for-change issue is not just about equality. Within some board areas, three different hospitals might employ nurses who are given the same title but are paid on different bands. That is a huge on-going campaign, so we share Glyn Hawker's concerns.

That is helpful.

I have a question for Fiona Kordiak. Given the suggestion from Unison that we can put a figure on the problem, can Audit Scotland go on indefinitely saying that it accepts that no agreement has been reached on how to quantify the matter, or does it have any teeth—for example, accounting or legal requirements—to pin down the issue?

For individual audits, the ultimate sanction is to provide a qualified audit opinion on each board's set of accounts. However, those are largely about the appropriateness of the accounting treatment rather than the financial impact. If this year we took the view that boards both had not done enough to quantify the potential contingent liability and could not convince us—as they were able to do last year—that matters were at too early a stage to put any figure on the potential contingent liability, we could issue a qualified audit opinion on individual boards' accounts. Because boards' accounts are consolidated up into the Scottish Government's accounts as a whole, as auditors of the Scottish Government we would need to consider how that fed through to our opinion on the accounts of the Scottish Government as a whole. Given the materiality aspects, we would need to take a judgment on that, but that is the next possible step that we could go to.

It is very useful and encouraging to have the issue put in perspective.

That concludes our lines of questioning. If the witnesses have nothing further to add, I thank them for their attendance. Equal pay in the health service is an issue on which there has not been much awareness to date. If nothing else, we have certainly raised the profile of a matter that is very much an equal opportunities issue of fairness. We hope that some significant progress will be made as a result. The evidence that we have gathered today will help to form the basis of our questioning of the cabinet secretary.

As previously agreed, we will consider agenda item 3 in private.

Meeting continued in private until 13:04.