The government has rejected proposals to increase NHS staff pay by 1% and instead impose a two-year deal in which staff who receive incremental pay awards get no further rise at all − sparking threats of industrial action from some unions.
Health service staff will get a below inflation 1% pay rise in April, but not if they are due to get an annual “progression pay” increase via increments in the Agenda for Change contract.
The independent review body recommended a 1% increase for all NHS staff, but ministers rejected this citing the “unaffordable” cost of a 1% increase. The NHS Employers organisation estimated the cost of an across-the-board 1% increase would be £500m.
Under the plans revealed today, staff eligible for incremental pay increases on the Agenda for Change framework, which the government claimed were usually around 3.4%, will receive only these increments. Staff due to receive incremental rises of less than 1% will have these uplifted to 1%.
This will affect around 55% of staff on Agenda for Change, which covers almost one million workers.
Employees at the top of their pay bands, and therefore not eligible for an incremental rise, will get a 1% rise. However, these rises will be non-consolidated – meaning they are not added to employees’ substantive pay or pension.
This is to avoid permanently widening the pay gap between staff at the top of their band and those on lower pay points. This will affect 45% of staff.
This deal will also apply in 2015-16 when staff at the top of their band will receive a 2% pay rise, but this will again be non-consolidated.
The consolidated pay scales remain unchanged and will continue to be the basis for additional earnings, such as overtime and unsocial hours enhancements.
Doctors and dentists will receive a 1% pay uplift. Meanwhile, 400 very senior managers in the NHS who will have their pay frozen in cash terms for the next two years.
The government claims the deal will save over £200m in 2014-15 and over £400m in 2015-16.
Chief secretary to the Treasury Danny Alexander said: “Public sector workers make a vital contribution to the effective delivery of public services. We need to continue with public sector pay restraint in order to put the nation’s finances back on a sustainable footing.”
The Treasury argued that incremental pay increases “for time served in a role” were “typically worth over 3%”.
But health unions reacted angrily in response. Both Unite and the GMB issued statements saying will be consulting its health service members on possible industrial action.
“We will be consulting with our members about the possibility of industrial action”
Unite said the government’s decision on increments was a “divide and rule” tactic and will see about 45% of the NHS workforce getting no cost of living pay increase at all from 1 April.
The union stressed that the incremental increases were in recognition of increased skills as staff progressed in their careers – and was not part of the annual pay rise process.
Unite head of health Rachael Maskell said: “Our members are being hit by the escalating cost of living crisis – their pay packets are shrinking year by year. Their hard work and dedication appears to count for nothing in an NHS which is being parcelled up for privatisation at an accelerating pace.
“We will be consulting with our members about the possibility of industrial action.”
“What sort of message does this give to the value this government places on dedicated NHS staff”
Unison Head of Health, Christina McAnea said: “It’s a disgrace that 70% of nurses and midwives will not even get a pay rise this year – what sort of message does this give to the value this government places on dedicated NHS staff.”
She went on to accuse the government of “riding roughshod” over the pay review body, saying: “The government has shown complete contempt for the NHS, contempt for staff and contempt for patients and will pay the price at the ballot box.”
Even a straight 1% increase would be nowhere near enough to meet the massive cost of living increases that NHS staff have had to cope with since 2010.
Criticising the government’s decision to deny any pay increase for 2 years to staff entitled to an increment, Ms McAnea said: “Increments are designed to reflect the growing skills and experience of nurses and other healthcare workers and are closely linked to competency.
“They are not a substitute for the annual pay rise that is needed to meet the increasing cost of living,” she added.
“The government clearly doesn’t understand how increments work,” she said. “As it stands, they save the NHS money but if this divisive plan goes ahead Unison will be arguing strongly that staff should be paid the full rate for the job from day one.”
Meanwhile, Peter Carter, chief executive and general secretary of the Royal College of Nursing, accused the government of expecting NHS staff to be “grateful while their contractually agreed terms of employment are torn up”.
“Less than half of nursing staff at the top of their pay increment will get a paltry 1% rise, following three years of pay restraint. The rest will simply get what they are contractually entitled to, if they can demonstrate they have developed their skills in the previous year,” he said.
Dr Carter claimed the government was “holding a gun to the heads” of NHS staff by “forcing them to choose between continuing to receive their contractually agreed pay increments, or a very small pay uplift to help deal with rising costs of living”.
He added: “Nurses accepted in 2010 that the NHS needed to make efficiency savings. Four years on, having kept the NHS afloat through one reorganisation after another and despite the economic situation improving, they are still being asked to bear the burden of financial mismanagement, which was not of their making.
“The NHS in England has spent £3bn on a chaotic reorganisation, returned another £3bn of underspend to the Treasury, and has spent massive amounts of money on redundancy payments for senior managers who simply moved from one post to another within the NHS.”
“This amounts to a pay cut, pure and simple, and it is not good enough”
Jon Skewes, director for policy, employment relations and communication at the Royal College of Midwives, said: “This amounts to a pay cut, pure and simple, and it is not good enough.
“Midwives are angry about this. It is yet another body-blow to NHS staff facing rising pressures and working ever harder without any reward. Midwives have been struggling to cope with years of rising prices and stagnant wages.”
He added: “Morale in the profession is at rock bottom and this announcement will do nothing to help, indeed it will make it much worse. It is impossible to get the best from staff when they are treated this badly. You do not help the NHS by hurting NHS staff.”
Commenting on the public sector pay announcements, Trades Union Congress general secretary Frances O’Grady said: “It is ‘national destroy public sector morale day’.
“NHS staff have been singled out for particularly harsh treatment, at a time when they are already facing a funding crisis, staff cuts, privatisation and top-down restructuring.”
All NHS employees covered by the Agenda for Change framework received a 1% rise last April, regardless of increments, bringing to an end a two-year pay freeze.