Chancellor Philip Hammond has said he will give “additional funding” to provide nurses with a salary rise, following the completion of the current pay review process.
Mr Hammond praised “hardworking” NHS staff and specifically singled out nurses during his autumn budget speech today.
“I will protect patient services by providing additional funding for such a settlement”
He told the Commons that he would fund a pay rise for nurses outside of the normal health service budget if it was recommended next year by the independent NHS pay review body, which collects evidence each year from unions, employers and the government.
But Mr Hammond indicated that this would also be dependent on negotiations between the Department of Health, NHS Employers and unions on changes to the current Agenda for Change contract.
“Our nation’s nurses provide invaluable support to us all in our time of greatest need and deserve our deepest gratitude for their tireless efforts,” said the chancellor.
“The health secretary has already begun discussions with health unions on pay structure modernisation for Agenda for Change staff to improve recruitment and retention,” he said.
“He will submit evidence to the independent pay review body in due course,” the chancellor told MPs, including Mr Hunt who was sitting on the front bench behind him.
“But I want to assure NHS staff and patients, that if the health secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement,” he said.
Earlier this month, it was reported that both sides had agreed “broad principles” to deliver a “refresh” of Agenda for Change with an emphasis on reforming increment pay points and pay bands for staff, such as restructuring bands 1-3 and lifting the salaries of the lowest paid staff above the living wage.
Other ideas that have been discussed include removing overlapping bands and creating larger, more consistent spacing of increment pay points. Along with changes agreed in previous talks to link increment progression to performance, the move could reduce the number of staff who get “automatic” increments.
Talks between unions and employers have been ongoing since the industrial action in 2014 but stalled in the previous absence of an offer of any new money for pay increases above 1%. As a result, today’s announcement could clear the way for new progress.
However, while there is thought to be common ground on some proposals between NHS Employers and unions, negotiations may falter again if the government seek cuts to weekend pay and unsocial hours or reductions in sick pay or annual leave, which have been its previous ambitions.
Mr Hammond’s comments on nurse pay were widely trailed prior to today’s speech, with a headline in the Sunday Telegraph predicting that money would be set aside to cover the pay review process.
In March, ministers were warned by the NHS pay review body itself that action would need to be taken on staff pay restraint in future, and that workforce planning had been “neglected”.
At the time, the body’s annual reports had just recommended yet another 1% pay rise for Agenda for Change staff, in line with the government’s previous restraint policy on remuneration and leading to claims that the review process had been “undermined”.
“Our nation’s nurses provide invaluable support to us all in our time of greatest need”
But, in an unusual move, the independent body warned the government that time was running out for its pay policy, which has been in place since 2010 – either as a total freeze or as a 1% cap.
“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,” it said.
“Our judgement is that we are approaching the point when the current pay policy will require some modification, and greater flexibility, within the NHS,” it added.
In September, unions representing nurses and other NHS workers appealed directly to the government for staff to receive a 3.9% pay rise, in line with inflation, plus an £800 lump sum. The appeal followed the government’s removal of the cap for police and prison officers just days earlier.
Subsequently, in October, Mr Hunt suggested during a Commons debate on health that the NHS pay cap was indeed at an end. “The pay cap has been scrapped,” he told MPs.
- Cap on nurse pay rises has been ‘scrapped’, Hunt tells MPs
- Unions demand 3.9% pay rise for NHS plus £800 lump sum
- Jeremy Hunt hints at end to pay restraint for NHS nurses
The decision to scrap the pay cap represents a U-turn from the government’s position in 2015, when the former chancellor, George Osborne, set out a policy to limit public sector rises to 1% until 2020.
Pressure has been mounting on ministers to end their pay restraint policy, with warnings growing from senior officials and influential think-tanks that it was hindering recruitment and retention.
Unions, including the Royal College of Nursing and Unison, have also sought to keep up the pressure on ministers over public sector pay ahead of the autumn budget today, with previous warnings about nurses struggling financially and the possibility of strike action.
- Nurses stretched to ‘breaking point’ over pay, finds RCN survey
- RCN chief calls for above inflation pay rise at rally to end 1% cap
- Nurses deliver ‘scrap the cap’ pay petition to Downing Street
Meanwhile, Mr Hammond also announced additional government funding for the health service overall, saying that the government “will always back the NHS”.
The chancellor said he recognised that the NHS was “under pressure right now” and that he was making extra resource funding of £2.8bn to the health service in England.
He broke this down as £350m “immediately” for this winter, £1.6bn during 2018-19, and the remainder in 2020. This additional funding is, however, represents a one-off payment and will not be recurrent.
He also said there would be an additional £10bn of capital for frontline services during this parliament to support sustainability and transformation partnerships, though supporting documents released by the Treasury this afternoon revealed that much of this money would need to come from land sales.
Earlier in his speech, Mr Hammond said that he had chosen to use “some of the headroom” he had established in the economy to “support key public sectors”.
The chancellor also announced duties on “cheap” ciders and rolling tobacco, among measures designed to boost public health.
“The tobacco duty escalator will continue at inflation plus 2%,” he said. “With an additional 1% duty on hand rolling tobacco this year. And minimum excise duty on cigarettes will also rise.”
He added: “Excessive alcohol consumption by the most vulnerable people is all too often through cheap, high strength, low quality products – especially so-called white ciders. And so, following our recent consultation, we will legislate to increase duty on these products from 2019.”
Budget speech: Chancellor Philip Hammond on the NHS
Our NHS is one of our great institutions. An essential part of what we are as a nation. And a source of pride the length and breadth of the country.
Its values are the values of the British people, and we will always back it. Dedicated NHS staff are handling the challenges of an ageing population and rapidly advancing technology with skill and commitment.
And, Mr Deputy Speaker, the number of patients being treated is at record levels. Cancer survival rates are at their highest ever level.
17 million people are now able to access GP appointments in the evenings and at weekends. And public satisfaction amongst hospital inpatients is at its highest level in more than two decades.
It is central to this Government’s vision that everyone has access to our NHS, free at the point of need. That is why we endorsed and funded the NHS’s Five Year Forward View in 2014. And met its funding ask – providing an extra £10bn in real terms per year by 2020.
But even with this additional funding, we acknowledge that the service remains under pressure and today we respond.
First, we will deliver an additional £10bn package of capital investment over the course of this parliament. To support the sustainability and transformation plans which will make our NHS more resilient. Investing for an NHS which is fit for the future.
But we also recognise that the NHS is under pressure right now. I am therefore exceptionally, and outside the spending review process, making an additional commitment of resource funding of £2.8bn to the NHS in England.
£350m immediately to allow trusts to plan for this winter. And £1.6bn in 2018-19, with the balance in 19-20, taking the extra resource into the NHS next year to £3.75bn in total. Meaning that it will receive a £7.5bn increase to its resource budget over this year and next year.
Mr Deputy Speaker. Our nation’s nurses provide invaluable support to us all in our time of greatest need and deserve our deepest gratitude for their tireless efforts.
My Rt Hon Friend the health secretary has already begun discussions with health unions on pay structure modernisation for Agenda for Change staff to improve recruitment and retention.
He will submit evidence to the independent pay review body in due course. But I want to assure NHS staff and patients, that if the health secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement.