NHS will need more cash for salary rises after pay cap scrapped, ministers warn

Ministers have been warned they will need to find additional funding for the NHS if staff are to receive pay rises above 1%.
NHS pay rise

Ministers have been warned they will need to find additional funding for the NHS if staff are to receive pay rises above 1%.

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Health secretary Jeremy Hunt confirmed the pay cap was finally being scrapped for the health service following earlier announcements of above 1% rises for police and prison officers.

However, NHS England chief executive Simon Stevens said that after seven years of austerity, the service would need extra money if pay rates were to start catching up with other sectors of the economy.

Additional ‘leeway’

In the Commons, Mr Hunt said he had been given additional ‘leeway’ by chancellor Philip Hammond when it came to negotiating next year’s pay round, but indicated any increase would have to be linked to improvements in productivity.

Unions warned that without additional funding the move was meaningless and was simply a code for cuts to jobs and services.

Mr Hunt told MPs that he hoped there could be a ‘win-win’ as a result of the additional flexibility he had been given.

‘We recognise it wasn’t sustainable to carry on with the 1% going forward and that’s why next year we’ve been given the leeway to have more flexible negotiations,’ he said.

‘Productivity improvements’ 

But pressed on whether it would be fully funded, Mr Hunt said: ‘That is something I can't answer right now because the latitude that the chancellor has given me in terms of negotiating future pay rises is partly linked to productivity improvements that we will negotiate at the same time.’

Giving evidence to the Commons Health Committee, Mr Stevens acknowledged that after years of pay restraint, NHS staff were entitled to more money, but questioned how such an increase would be paid for.

‘Over time it will be necessary for NHS staff to get rates of pay that are consistent with the rest of the economy,’ he said. ‘But that does need to be funded.’

Struggle to meet commitments

Mr Stevens said that without additional cash from Mr Hammond in the budget on 22 November, the NHS would struggle to meet its existing commitments.

'The budget position for funding currently pencilled in for the NHS for next year and the year after looks extremely challenging and, if not mended, I think it is going to be very hard for the NHS to do all that has been asked of it over the course of the next year and the year beyond.," he said.

‘Decisions that are taken on 22 November will determine the shape of the NHS next year and the year after.'

He added: 'We are having to operate in very constrained circumstances which is the consequence of seven years worth of the NHS budget growing at 1% compared with a historic rate of 4%.

‘Code for job cuts’

‘We are spending £23 billion a year less than if we were spending at French or German levels as a consequence.’

Unison general secretary Dave Prentis said scrapping the pay cap would only be meaningful if it led to a ‘proper’ pay rise.

GMB national officer Kevin Brandstatter said: ‘If there is no new money then it's a con trick to claim that the pay cap has  ended.

‘Without new funding “productivity improvements” just looks like code for cuts to jobs and services.’

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