NHS could be destabilised by local pay, Department of Health warns Bristol Royal Infirmary. George Osborne wants public sector pay linked to private sector pay in different parts of the country. Rapid introduction of local pay rates for about 1 million NHS workers in England could destabilise a health service undergoing huge organisational changes and having to make £20bn worth of efficiency savings by 2015, the Department of Health has warned. In a stark warning that appears to undermine a wider government desire to speedily link public sector pay to the jobs market and private sector pay in different parts of the country, the department advocates only an incremental approach to changing arrangements for NHS staff other than its most senior managers, doctors and dentists. Although it backs the principle outlined by the chancellor, George Osborne, in his 2011 autumn statement, its submission to the NHS Pay Review Body considering the issue states: "We would need to consider carefully the wider system reform in the NHS and the resulting organisational changes for the workforce which are still taking place ... Pace-of-change decisions would need careful consideration to balance a faster realisation of the benefits of market-facing pay against the potential risks around affordability and recruitment and retention and so on." The department also hints that it would demand more money from the chancellor if he insisted on more rapid changes. If a faster transition is sought then the DH [Department of Health] would need to consider whether any transitional measures to ease implementation issues were justified. The merits and affordability of any adjustment would need to be considered carefully. The caution over the consequences of more wide-ranging changes in the department's submission contrasts with NHS employers' enthusiasm (pdf) for more local pay and conditions deals. They say staff costs are still rising despite the public sector pay freeze and average 1% limits on increases from 2013. This is because the lowest-paid staff escaped the freeze and had £250 rises while other staff are still going up the pay scales as they gain experience and responsibility. Staff unions have insisted that the present national pay structure is sufficient. They say that the only substantial variation in gaps between public and private sector pay, housing costs and cost of living across English regions lies between London and the south-east and the rest of the country. Current national agreements are sufficient to take account of that through existing high-cost area zones, they add.