The real value of pay packets for health workers like nurses and midwives is falling and could drop by a further 6% by 2019-20, according to a new report on earnings.
A combination of rising inflation and “pay restraint” means average real pay in the public sector is dropping, a trend that looks set to continue over the next three years, according to analysis by the Resolution Foundation.
“The outlook for public sector pay looks particularly weak”
With a 1% cap on public sector pay still in place, the value of average earnings will fall back to below 2004-05 levels by the end of this parliament, warned the foundation’s latest Earning Outlook report, which was funded by the Nuffield Foundation.
It suggested pay growth in health and social care has been especially weak and average real pay could fall a further 6% by 2019-20.
The drop will have a direct impact on the living standards of those working in the sector, said the report, which also warned that pay cuts may make it even harder to recruit new staff and meet the demands of an ageing population.
“Where this pressure comes alongside rising demand and uncertainty over migrant worker policy – such as in healthcare – the impact may be compounded,” said the report.
“We call again on the government to lift the 1% cap on public sector pay”
Adam Corlett, economic analyst at the Resolution Foundation, added: “While rising inflation is applying the brakes to real pay growth across the board, the outlook for public sector pay looks particularly weak.
“Pay is now actually falling, and worst is expected to continue for the rest of the parliament, with levels at the end of the parliament dropping back to levels last seen in 2004,” he said.
In response, the Royal College of Midwives said the analysis was “further proof we are short-changing our hard working midwives and other NHS staff”.
Jon Skewes, the RCM’s director of policy, employment relations and communications, said NHS staff had already seen a substantial fall drop in the value of their pay, despite the rising cost of living.
‘Real value’ of nurse and midwife pay falling, warn analysts
“In October last year, the RCM calculated that if an average midwife had seen their salary rise with inflation since 2010, their salary would be over £6,000 higher now,” he said.
“This will increase to over £9,000 if public sector pay restraint continues to 2020 as the government intends,” said Mr Skewes.
“We call again on the government to lift the 1% cap on public sector pay, so that the dedication, commitment and skill of our midwives and other NHS staff is recognised and fairly rewarded,” he said.
However, in a speech to nursing leaders in Birmingham yesterday, health secretary Jeremy Hunt said the government was prioritising staff recruitment over remuneration.
“We did take the difficult decision to focus our resources on increasing the number of nurse training places,” he told delegates at the chief nursing officer for England’s annual summit.