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House price hikes led to 9,000 nurses leaving NHS acute care sector – report

Institute for Fiscal Studies says rising living costs and inflexible pay system to blame

Institute for Fiscal Studies suggests rapidly rising living costs and inflexible pay system are to blame

Rapidly rising living costs are leading nurses to switch jobs to more affordable areas, or even leave the NHS altogether, a report suggests.

The study by the Institute for Fiscal Studies (IFS) found rising local house prices affected the retention of nurses working in acute trusts in England.

Agenda for Change does not give employers enough flexibility to retain

Institute for Fiscal Studies suggests rapidly rising living costs and inflexible pay system are to blame

The Institute for Fiscal Studies found rising local house prices affected the retention of nurses working in acute trusts in England.
The Institute for Fiscal Studies found rising local house prices affected the retention of nurses at acute trusts in England Picture: Alamy

Rapidly rising living costs are leading nurses to switch jobs to more affordable areas, or even leave the NHS altogether, a report suggests.

The study by the Institute for Fiscal Studies (IFS) found rising local house prices affected the retention of nurses working in acute trusts in England.

Agenda for Change ‘does not give employers enough flexibility to retain staff’

The report warns Agenda for Change, the national system for NHS pay, terms and conditions, does not give employers enough flexibility to retain staff in areas where living costs are increasing.

Researchers examined payroll data for band 5 and 6 nurses working at NHS acute trusts in England between 2012 and 2018, using local house prices as a cost of living measure.

They found house price hikes over this period resulted in an estimated 9,000 nurses leaving the NHS acute care sector.

Changes in the local property market were also responsible for 1,700 nurses per year moving to a different trust.

‘This is costly to trusts, which must replace these staff with new permanent or temporary employees, and is likely to cause disruption in the provision of care to patients,’ the report said.

Existing system of pay supplements ‘not fit for purpose’

While nurses’ wages are fixed by Agenda for Change, trusts do have some flexibility to use pay supplements – known as recruitment and retention premia – if they find it difficult to recruit and retain staff at the normal salary rate in certain specialties or locations.

But IFS research economist Isabel Stockton, an author of the report, said the existing system of supplements and retention premia was ‘not fit for purpose’.

‘National pay-setting affords NHS hospitals little flexibility to respond to economic conditions in their local area,’ she said.

‘When, as a result, nurse earnings do not keep pace with local increases in cost of living, this prompts more nurses to exit NHS hospitals, particularly in expensive areas.’

Workforce under strain, with more than 35,000 vacant nursing posts

Responding to the report, Health Foundation senior visiting fellow and Nursing Standard editorial advisory board member James Buchan said the nursing workforce in England was under ‘incredible strain’.

‘Over 35,000 nursing posts are vacant and sickness absence rates are high as a result of COVID-19, with one in ten hospital nurses reported to be off work in January,’ Professor Buchan added.

‘This report provides further evidence that the government needs to urgently develop a comprehensive national workforce plan that enables the NHS to recruit and retain nurses where they are needed most.’


Find out more

Institute for Fiscal Studies (2021) Cost of Living and the Impact on Nursing Labour Outcomes in NHS Acute Trusts


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