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NHS nurse pay: dire warning deals blow to hopes of pay rise

Real-terms pay cut ‘highly likely’ in face of competing demands on NHS budgets and other public services, cautions Institute of Fiscal Studies
Chancellor Rishi Sunak must decide how high a priority nurses’ pay should be

Real-terms pay cut ‘highly likely’ in face of competing demands on NHS budgets and other public services, cautions Institute of Fiscal Studies

Giving nurses a pay rise could take billions away from other public services or increase government borrowing, a think tank has warned.

The Institute for Fiscal Studies (IFS) said chancellor Rishi Sunak will have to choose between imposing severe pay cuts on nurses and other public sector workers or spending much less than intended elsewhere on public services in his spring statement on 23 March. Alternatively, he will have to increase government borrowing to pay public sector workers more.

Either wider public services lose out… or nurses do

Real-terms pay cut ‘highly likely’ in face of competing demands on NHS budgets and other public services, cautions Institute of Fiscal Studies

Chancellor Rishi Sunak must decide how high a priority nurses’ pay should be
Chancellor Rishi Sunak Picture: Alamy

Giving nurses a pay rise could take billions away from other public services or increase government borrowing, a think tank has warned.

The Institute for Fiscal Studies (IFS) said chancellor Rishi Sunak will have to choose between imposing severe pay cuts on nurses and other public sector workers or spending much less than intended elsewhere on public services in his spring statement on 23 March. Alternatively, he will have to increase government borrowing to pay public sector workers more.

Either wider public services lose out… or nurses do

IFS director Paul Johnson said: ‘If pay rises for nurses, teachers and other public sector workers even just match inflation, there will be billions less than intended for other aspects of public spending.

‘If they do not match inflation then the real pay of millions of public sector workers will fall yet again, after a decade not just of falling behind the private sector but of significant, real cuts in pay.’

The cost of living will soar this year due to the steep rise in energy prices. Even before the war in Ukraine, consumer price inflation was tipped to reach 7.3% in April, but since the Russian invasion, energy prices have been pushed up even further. Many other areas will be affected too, including the cost of food.

Even a below-inflation pay rise for nurses would leave big hole in public purse

Without government intervention, public sector workers face an average real-terms pay cut of £1,750 because of the effects of inflation, the IFS warned.

The think tank said below-inflation pay awards for public sector workers seem ‘highly likely’ for 2022-23, but warned a nominal 5% pay award for NHS workers would cost about £4 billion, eat up more than a quarter of planned cash boost for the NHS, and would still amount to a real-terms pay cut.

Price inflation and nurses’ salary deflation

Analysis by Nursing Standard shows nurses on Agenda for Change contracts are up to £3,600 a year worse off as inflation soars and wages fail to keep pace.

A nurse at the top of Band 6 earns £39,037. But if salaries from 2010 had increased along with the consumer price index, this pay point would be £42,668, according to the Office for National Statistics.

Band 5 starters earning £25,655 are around £772 a year worse off than their counterparts in 2010, while nurses at the top of Band 5 earning £31,534 in 2021 are now £2,828 worse off than they would have been in 2010, when they would have earned £27,534.

Source: Nurses up to £3,600 worse off as their wages fail to keep pace with inflation

Calls for inflation-busing pay rise

Mr Johnson’s analysis does not bode well for the RCN’s campaign for a 12.5% pay rise for nurses in 2022-23. The college warns time is running out to address the government’s ‘unacceptable pay plan’ for NHS staff.

It has told the NHS Pay Review Body (RB) that without a significant pay reward for 2022-23 ‘more nursing staff will be lost, patient safety will be further compromised and the NHS will simply be unable to recover’.

Last month, England’s Department of Health and Social Care advised the RB that nurses should get no more than 3% pay rise in 2022-23, claiming anything more would compromise the NHS’s ability to tackle its treatment backlog.

The Treasury has been contacted for comment.


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