Ministers have been warned by the NHS Pay Review Body that action will need to be taken on staff pay restraint in future, and that workforce planning has been “neglected”.
The body’s annual reports have just recommended a 1% pay rise for Agenda for Change staff, which is in line with the government’s current restraint policy and deeply unpopular with unions.
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However, in an unusual move, the independent body has effectively warned the government the road is running out for its policy, which has been in place since 2010. It also criticised the lack of an NHS people strategy, which it said was leading to workforce issues being forgotten.
The reports, published on Tuesday, said: “It is clear that current public sector pay policy is coming under stress. There are significant supply shortages in a number of staff groups and geographical areas.
“Potential future staff will be more sensitive to pay than existing staff are”
Pay review body
There are widespread concerns about recruitment, retention and motivation that are shared by employers and staff alike. Inflation is set to increase during 2017 compared to what was forecast, leading to bigger cuts in real pay for staff than were anticipated in 2015, when current public sector pay policy was announced by the new UK government.
The report states: “Local pay flexibilities to address recruitment and retention issues are not being used to alleviate the very shortages they were designed to address. Our judgement is that we are approaching the point when the current pay policy will require some modification, and greater flexibility, within the NHS.”
The pay review body, made up of independent experts who advise the government each year on pay awards for the NHS’s 1.4m staff, said pay mattered in terms of whether the NHS was seen as attractive by staff.
It said: “Potential future staff will be more sensitive to pay than existing staff are. The impact on supply of the changes in student funding in England is still uncertain, but there is a risk of an adverse impact and early signs of falls in application numbers.
“Take-home pay is important for existing NHS staff and many saw a cut in their take-home pay in cash terms in 2016-17, whilst at the same time their workloads were increasing,” it added.
“Continuation of pay restraint over the longer term is of growing concern to our workforce”
Although NHS England’s Five-Year Forward View plan said pay restraint could not continue indefinitely, the pay review body warned that it did not adequately adress future workforce issues.
“There is no people strategy for the NHS linked to the delivery of the Five-Year Forward View in England, which is leading to workforce issues being neglected, with a piecemeal and short-term approach to the role of pay and inertia at local level,” it said.
Danny Mortimer, chief executive of NHS Employers, which represents trusts, said: “NHS organisations have developed their financial plans on the basis of a continuation of the government’s ongoing public sector pay policy of 1% pay awards, together with payment of annual increments.
“Employers understand that a continuation of pay restraint over the longer term is of growing concern to our workforce; we will continue to work with trade unions to explore how the overall value of the NHS employment package offer can be maximised within the current constrained position,” he added.