Chancellor signals cap on pay rises and more attacks on AfC
Nurses face future basic pay rises capped at 1% and renewed attempts to drive down pay progression, suggest today’s Budget statement.
The Chancellor said public sector pay awards would be limited to an average of up to 1% until 2015-16.
This represents an extension to the 1% rise for NHS staff that was announced earlier this month by the government and which comes into effect on 1 April.
The previous announcement was criticised by unions for being well below inflation and by employers for adding to the financial pressures faced by trusts. The extension of the 1% rise in basic pay is therefore unlikely to please either side.
Of more concern to nurses and other staff is likely to be George Osborne’s rhetoric on incremental pay rises for public sector works, which NHS staff receive through the Agenda for Change framework.
In his Budget speech today, Mr Osborne said: “The government will extend the restraint on public sector pay for a further year by limiting increases to an average of up to 1% in 2015-16.
“We will also seek substantial savings from what is called progression pay. These are the annual increases in the pay of some parts of the public sector.
“I think they are difficult to justify when others in the public sector, and millions more in the private sector, have seen pay frozen or even cut,” he said. “I know that is tough but it is fair.”
Mr Osborne’s comments come barely a month after employers and unions agreed to changes to AfC, which will see some reductions in pay, terms and conditions.
However, the Chancellor did state that the NHS budget would remain ring-fenced over the next two financial years.
“We will reduce resource departmental expenditure limits by the equivalent to a 1 per cent reduction for most departments,” he said. “The schools and health budgets will remain protected – because our promise to our NHS is a promise we will keep.”
Frances O’Grady, general secretary of the Trades Union Congress, said: “The Chancellor is either oblivious to the tough time that millions of public sector workers and their families are having or he is deliberately setting out to punish them.
“Family budgets are at breaking point and millions of nurses, teachers, fire-fighters, council workers and civil servants will have been hoping the Chancellor might ease their pain today, not add significantly to it,” he said.
“The government also seems set on ditching long-established, easy-to-understand pay progression in the public sector based on increased experience and skills over time,” he added.
“Reports of a further move towards a messy system of individual performance-related pay will damage morale – already at a low ebb – undermine team working, and do nothing to improve services.”
Peter Carter, chief executive and general secretary of the Royal College of Nursing, said: “Yet again hard working nurses will not find much cause for celebration in this year’s budget.
“The news that public sector pay will continue to be capped at 1% until 2016 means yet more financial difficulty for the UK’s nurses. This also continues to undermine the principle of an independent pay review body.”
Jon Skewes, director for employment relations, policy and communications at the Royal College of Midwives, added: “This condemns hard-working midwives to another three years of pay misery after two years when pay was frozen. We are also deeply concerned about the plans to stop pay progression.”
But Dean Royles, chief executive of the NHS Employers organisation, said: “Even limited to 1%, the public sector pay increase announced by George Osborne this afternoon will add in the region of £500m to NHS annual expenditure when applied across all NHS staff.
“This is the equivalent of around 15,000 new nurses,” he claimed.