The government has said it wants the next pay award for nurses and other Agenda for Change staff to “recognise their hard work” but that the overall package must be “fair and also affordable”.
The newly rebranded Department of Health and Social Care has published its evidence to the NHS pay review body for the 2018 to 2019 pay round, reiterating the end of the 1% cap on salary rises previously signaled by ministers and confirmed by the chancellor in his autumn budget speech.
The department also repeated ministerial ambitions to reform the Agenda for Change contract and for a future multi-year pay deal, with early talks already underway with unions and employers.
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However, in contrast to recent years, the department has not suggested a specific percentage that it would like to see for NHS staff pay rises, instead highlighting the need for a “flexible approach”.
“The government has confirmed that the across-the-board 1% public sector pay policy will no longer apply to pay awards for 2018-19,” it stated in its written evidence to the pay review body, which was published on 25 January.
It added: “This is due to recognition that in some parts of the public sector, particularly in areas of skills shortage, flexibility to go above the 1% may be required to ensure continued delivery of world class public services, including in return for improvements to public sector productivity.”
“NHS staff do a fantastic job in delivering world-class care, we want to recognise their hard work and make sure that the overall pay package is fair and also affordable to hard working taxpayers,” it said.
It highlighted that the health secretary’s recent letter to the body, asking it to begin its work, had confirmed a “more flexible approach” to pay to “address areas of skills shortages and in return for improvements in public sector productivity”.
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Regarding the second point, the letter from Jeremy Hunt confirmed that additional funding has been made available for staff “provided that the awards are part of an agreement with Agenda for Change trades unions about reforms to boost productivity”, noted the department.
“Flexibility to go above the 1% may be required to ensure continued delivery of world class public services”
Department of Health and Social Care
It said unions had agreed to contract reform as part of the 2015-16 pay settlement and that exploratory talks were continuing “with a view to obtaining mandates to negotiate a multi-year agreement from 2018-19”.
In its evidence submission, it stated: “We continue to focus on public sector pay reform to ensure that terms and conditions are fit for purpose, affordable and sustainable.”
“The intention is that discussions on contract reform will take place in parallel with the NHS pay review body’s own consideration about the appropriate level of pay award,” it said.
On skills shortages, the department highlighted that the “fact that fewer members of staff are choosing to remain in the NHS is a significant concern”. But the department stated: “Pay is not the only motivator and understanding the staff experience is key to key to addressing motivation and retention.
“The staff experience has remained broadly stable but there remain significant challenges in staff engagement and motivation,” it said. “A better work/life balance is the largest growing reason for voluntary resignations however there are no particularly strong, clear regional patterns in leaver rates.”
“Understanding the staff experience is key to key to addressing motivation and retention”
Department of Health and Social Care
The document said the pay bill per whole-time equivalent (WTE) for hospital and community health services non-medical staff rose from £35,389 in 2010-11 to £37,443 in 2016-17. On average, the pay bill per WTE increased by 0.94% every year, it noted.
Meanwhile, it said the overall NHS workforce had increased between March 2012 and March 2017 by 54,350 WTEs (6.2%). All areas apart from infrastructure support staff have seen increases.
Increases featured in the report include a 3.9% growth in WTE nurses and health visitors, from 275,114 to 285,893 and a 6.2% increase in midwives, from 20,342 to 21,597.
In contrast, a look at leaver rates for different staff groups across different parts of England showed “increases in most regions” for nurses and health visitors, midwives and ambulance staff.
For England as a whole, the 12-month leaver rate for nurses and health visitors in 2010-11 was 8.6%, rising to 10.7% in 2016-17.
The regions with the highest leaver rates in 2016-17 – all at around 12% or just over – were Thames Valley, North West London, South London, North Central London and the South West.
The independent pay review body, which has already received evidence from unions, will now assess the different views before making its recommendations on remuneration for health service staff.
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The revival of the pay review body follows a run of seven years where it has been either side-lined by the government or simply rubber-stamping a series of pay freezes and then the 1% cap in increases.
Public sector pay was frozen by the Conservative-Liberal Democrat coalition government for two years in 2010, except for those earning less than £21,000 a year. Since 2013, pay rises have been capped by the Conservative led government at 1%, which is below the rate of inflation.