This report was prompted by the current debate on how best to determine nurses pay in the NHS. Increased emphasis on cost, devolution of managerial responsibility, and the establishment of NHS Trusts are key elements of the NHS reforms, and will have a major impact on the way nurses pay is determined. This report examines the impact of these reforms in terms of likely labour market effects of local pay `flexibility', and in terms of the continued existence of the Nursing Review Body.