Health secretary Jeremy Hunt has told MPs that the 1% cap on pay rises for NHS staff has been scrapped, but that any future change in remuneration would be tied to a deal on productivity.
He said that the pay restraint policy, in the NHS since 2010, was necessary to allow it to recruit thousands of extra nurses and doctors, but he accepted the 1% cap could not continue indefinitely.
“Without pay restraint, we wouldn’t have 11,300 more doctors in the NHS, 11,300 more nurses in our wards,” Mr Hunt told the House of Commons during health questions today.
“I can give you good news – the pay cap has been scrapped”
He said: “But you will be aware that 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.”
After a follow up question pressing him on the cap from Labour MPs, Mr Hunt reiterated: “I can give you good news – the pay cap has been scrapped.”
The question had come from Marsha de Cordova, Labour MP for Battersea, who told Mr Hunt that lifting the cap on health workers’ pay would be in the best interests of patients.
She said: “Hospital wards and GP surgeries are chronically understaffed and the knock-on effect are the waiting lists, which are spiralling out of control.
“Isn’t it in the best interests of patients that the pay cap is scrapped so the NHS can run with the relevant number of staff in place,” she asked.
Meanwhile, Helen Jones, Labour MP for Warrington North, asked Mr Hunt whether a rise would be funded by cuts in services.
In response, Mr Hunt said: “That is something I can’t answer right now, because the latitude the chancellor has given me in negotiating future pay rises is partly linked to productivity improvements that we will negotiate at the same time.
“The fact is we do have that flexibility and I hope we can get a win-win as a result,” he added.
Mr Hunt revealed earlier this year he was lobbying the prime minister and chancellor for an end to the pay cap amid concern that it was pushing staff to leave the NHS and exacerbating difficulties in recruitment.
The decision to scrap the pay cap is a significant U-turn from its position in 2015, when the then chancellor George Osborne outlined a policy to limit public sector pay rises to 1% until 2020.
According to the 2016 staff survey, just 37% of staff in NHS trusts were satisfied with their level of pay. However, a recent survey of staff leaving the Nursing and Midwifery Council register showed 44% highlighted workload and other pressures as reasons for leaving. Pay accounted for just 16%.
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There has been growing pressure on the government over public sector pay, with unions particularly vocal over the summer months, which culminated in a Westminster protest led by the Royal College of Nursing.
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Meanwhile, the pay cap was lifted for police and prison staff last month, but the level fell well short of inflation and service providers were ordered to find the cash from their own resources.
In a statement responding to Mr Hunt’s comments, Labour health spokesman Jonathan Ashworth said: “It looks like hospitals will be forced to cut other services to find the funds.
“Jeremy Hunt is trying to face both ways on NHS pay and it just means even more uncertainty,” he said. “While the government dithers, staff continue to leave the NHS and patients continue to be at risk from short staffed services.”
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He added: “There has still been no confirmation of any of this from the Treasury. The government need to immediately confirm that extra funding will be provided to lift the NHS pay cap so that all staff can benefit from a long overdue pay rise.”
Janet Davies, chief executive and general secretary of the RCN, said: “Jeremy Hunt has listened to the tens of thousands of nurses who made their feelings clear and we thank him for today’s categorical statement.
“The cap held pay below inflation and gave nurses year-on-year pay cuts,” she said. “With a staffing crisis building, the government is right to lift it.”
Ms Davies added: “The next pay offer must not come in below inflation and ministers cannot ask the NHS to make other cuts to pay for it – services must be given extra funding to cover the cost.”
Jon Skewes, from the Royal College of Midwives, said his union “very much” welcomed today’s announcement from the health secretary.
“The government must commit to fully funding a real terms pay increase for midwives and NHS staff,” he said. “Anything less will fundamentally damage employment relations in the NHS and will add to the already rock-bottom NHS morale.
“We need our NHS staff more than ever because ultimately, investment in NHS staff is an investment in high quality, safe NHS care,” added the RCM’s director for policy, communications and employment relations.
Lynda Thomas, chief executive of Macmillan Cancer Support, said: “Doctors and nurses working in cancer care have faced unprecedented pressure in recent years; it is vital that we improve recruitment and retention of staff. World class cancer care depends on the health service attracting and keeping enough staff with the right skills so we welcome this apparent move to lift the pay cap for NHS staff.”
Unison general secretary Dave Prentis said: “Scrapping the pay cap is the right thing to do, but it’s only meaningful if workers receive proper pay rises.
“The government’s announcement looks worryingly like a smoke and mirrors move, with talk of ‘productivity improvements’. NHS staff, patients and services shouldn’t be made to suffer to fund a pay rise,” he said.
“The government can’t cherry pick lifting the cap for health workers. This cap has to be scrapped, and replaced with decent pay rises, for all public service workers,” he added.
Danny Mortimer, chief executive of NHS Employers, said: “It is helpful to receive this confirmation from the secretary of state, which echoes the messages to the pay review bodies.
”Employers will await further details in the budget and through the deliberations of the pay review bodies,” said Mr Mortimer.
“The NHS is clear however that additional investment is needed to support pay awards above the present pay cap,” he said. “We are also clear that alongside action that we are taking locally, national support is needed in other areas to improve both supply and retention.”
He added: “The recent announcement on access to affordable housing for NHS employees is extremely welcome in that regard, as are the proposed improvements to language testing for nurses. We also repeat our call for reversal of the recent disinvestment in CPD [continuing professional development] funding.”
Chancellor Philip Hammond is due to give his autumn budget speech on 22 November.