Pay for NHS nurses will be limited to just 1% in 2015-16, Chancellor George Osborne has announced, as part of £11.5bn spending cuts.
The Chancellor also told MPs in the House of Commons today that automatic pay progression for “most health staff” will be linked to performance, bringing to an end the dominance of automatic incremental pay rises.
He said limiting pay rises in the 2015-16 year to an average of up to 1% in 2015-16 would save taxpayers £1.6bn.
The government’s comprehensive spending review pledged “substantial reforms” to automatic pay rises in the NHS “ensuring public sector workers do not receive pay increases purely as a result of time in post.”
George Osborne told the House of Commons today it was “unfair” on both public and private sector employees who have had their pay frozen or restricted to 1% to see others enjoy increases of “up to 7%.”
The spending document sets out: “Most health staff will be subject to local performance standards, which will link progression pay more closely to performance, not time served, and the government will seek further reforms.”
It is not clear what is meant by further reforms.
The NHS Employers organisation secured an agreement with trade unions in February around linking pay progression to performance under the Agenda for Change Framework, which affects almost one million NHS staff.
As part of its evidence to the NHS Pay Review Body in October, NHS Employers argued incremental “drift”, where staff progress automatically through pay bands on the Agenda for Change framework, adds around 2% to each NHS trust’s pay bill annually.
Automatic rises for doctors, who are covered by a separate contract, can range from 3% to 8% of pay a year, according to NHS Employers. For wider NHS staff, increments can result in increases of 1.8-3.7% a year.
The Royal College of Nursing said it would seek clarification from the government around its pay progression proposals.
Chief executive Peter Carter said: “Changes which the RCN and other unions negotiated with the government mean that NHS pay progression is already conditional on employees demonstrating they have the right skills, knowledge and performance.
“These increments reward hard working nurses and encourage the development of the workforce, and it is unfair to suggest that they are based simply on time served.”
Dave Prentis, general secretary of Unison, said the attack on pay would lead to a shortage of nursing. He said: “If the Chancellor really wants to end pay progression then employers need to pay the rate for the job from day one. That will not save money but will cost the Treasury a lot more.”