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Osborne reveals NHS pay restraint bombshell


Nurses working in the NHS will continue to see their pay restrained, with annual salary rises restricted to 1% over the next four years, Chancellor George Osborne has said today as he laid out the new government’s financial plans.

However, he also announced the national minimum wage for people over the age of 25 will increase – creating a “national living wage” – to £7.20 an hour in 2016, and then £9 by 2020.

In his first budget announcement since the Conservative government won the election, Mr Osborne said there was a “simple trade-off” between pay and jobs in many public services.

“I know there has already been a period of pay restraint. But we said last autumn there we would need to find commensurate savings in this parliament,” he said.

“So, to ensure we have public services we can afford and to protect more jobs, we will continue recent public sector pay awards with a rise of 1% per year for the next four years,” said Mr Osborne.

The chancellor said the NHS was the government’s “priority” and went on to reiterate the Conservative commitment to provide it with an additional £8bn a year by 2020, in line with the Five-Year Forward View, the five-year plan set out last autumn by NHS England boss Simon Stevens.

Mr Osborne said this was on top of the extra £2bn already promised for the NHS budget this year, which would amount to an additional £10bn a year by 2020.

However, he noted that the NHS itself would have to make “very challenging” efficiency savings over the coming years.

“Public spending should reflect public priorities and we have to make choices. Our priority is the national health service,” he said.

In its full budget document published today, the government states average levels of public and private sector pay are the same, but that public sector workers “continue to benefit from a significant premium once employer pension contributions are taken into account”.

“George Osborne’s announcement might look attractive at first glance, but he’s simply giving to the low-paid with one hand and taking away with the other”

Dave Prentis

It says restricting pay to 1% a year from 2016-17 onwards will save the government around £5bn by 2019-20.

The document also reveals there will be a “renewed focus” on reforming progression pay and other terms and conditions for public sector workers.

Meanwhile, it explains that workers over the age of 25 will be paid a premium on top of the national minimum wage to ensure they earn what Mr Osborne is calling a “national living wage” of at least £7.20 an hour from April 2016.

However, the Living Wage Foundation – an independent charity which calculates annual minimum rates of pay – sets the current UK living wage at £7.85 an hour, and £9.15 an hour for those living in London.

Unison described the 1% pay award as “miserly” and said the announcement would “hasten the reluctant exit of many dedicated staff from our hospitals, schools and local councils”.

The union’s general secretary Dave Prentis said: “The economy is growing yet public servants remain shut out of the recovery.

“Britain won’t have public services fit for 21st century needs, unless wages for public servants are high enough to attract the best recruits. Pay austerity might be over for MPs but it’s set to continue for many more years for everyone else in the public sector.”

He added “An hourly rate of £7.20 is not a living wage. George Osborne’s announcement might look attractive at first glance but as tax credits are cruelly snatched away – leaving many workers £1,200 worse off – he’s simply giving to the low-paid with one hand and taking away with the other.”

The Royal College of Nursing echoed concerns about the “shock” announcement to limit pay rises to 1% for nurses and other public sector workers.

It warned of “serious consequences” for nurses and patients, pointing to the ongoing struggle being experienced by the NHS in recruiting nurses.

“Nurses are already feeling the effect of what will now be a decade of severe pay restraint”

Peter Carter

Peter Carter, chief executive and general secretary of the RCN, said: “Nurses are working harder than ever under greater pressure as demand for their care is growing.

“That demand is only going to increase over the years to come,” he said. “Nurses are already feeling the effect of what will now be a decade of severe pay restraint and subsequent reduced living standards.”

He added: “This decision will make the situation worse as nurses realise they are not valued – the shock of this announcement will be felt by many.

“There is an independent NHS Pay Review Body that makes recommendations about NHS pay awards – until the chancellor spoke today, nursing staff were totally unaware that this was disappearing.”




Readers' comments (56)

  • You could pay nurses a million pounds a minute, but with the conditions of work, high money would make it easier to leave earlier, but not solve the conditions. It is different having to slide a 30-stone man up the bed, needing 6 staff, most of whom were overseas nurses and thinner and shorter than the average UK nurse, and having to poach them from the next ward because there were not 6 staff on the ward of any description at the time. Added to that people with dementia who were wondering about and pulling out IV lines, which entails having to do the same job twice to rectify that. Add pay would help, where, in all of that? The worst wards have a high-proportion of overseas nurses from less wealthy countries - that should imply that UK nurses do not want to work there, should it not?

    The pay is one part of a problem. But there are so many to choose from.

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  • I wouldn't object to 1% pay rise if everybody else only got that much including Politicians.

    What I object to is being told that the national average pay increase is now well above inflation. Partly this will be influenced by politicians are paying themselves an 11% increase, thus fudging the figures for reporting purposes.

    I'd like to see the politicians live on this 'Living Wage' of £7.20 per week.

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  • It is appalling the MP's will gladly accept a 10/11% increase in 2015 but won't stand up for anything more than 1% for arguably THE most important public workers in the UK. Why don't the MP's take a 1% pay rise as well to show their alliance if the NHS is such an important pillar for England. It's all for show, frankly. The nurses are being taken for granted. I'm sure the MP's aren't in it for the money either, but they make sure they are well taken care of!

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  • To those thinking that this is a reason to leave the NHS, even after another 4 years of restraint, I bet your total remuneration package will remain better than most nurses will find they are worth outside.

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  • I think that this underlines something very pertinent

    That is...

    Does your union strike?

    If the RCM and Unison are prepared to strike then why not the RCN?

    Does the RCN deserve our subscriptions when continuing with its meekness and refusal to tackle the current government with the only weapon we have which is our very skilled and caring practice?

    The problem is that in the RCN not striking - the body politic of professional nursing is split and into such a split can crawl this government and maintain services even during a strike

    We need to be unified

    We need to fight back

    If we do not this will continue and we will lose more and more and more

    The NHS will lose more skilled staff an our role in preserving this fine institution will be for nought if we are no longer able to live within its ripped fabric


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  • 1% for all then okay but 1% for some but not others is totally unacceptable. Well to all of those nurses out there I say this. You do a fantastic job and the majority of us are grateful for the time, effort and compassion you show all of us who need you. Don't let them grind you down. Its not fair I know but what would we do without you all. Stay with it for all out sakes.

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  • This is me -Anonymous | 8-Jul-2015 1:42 pm

    Well done to Jill Garnett and others with NHS stamped through their very core.....

    And as for this comment.......

    Added to that people with dementia who were wondering about and pulling out IV lines, which entails having to do the same job twice to rectify that

    I would suggest do the job properly in the first place in the correct environment with the correct skills and remember the "people with dementia" are mums, dads, aunties, uncles, husbands, wives and partners - humility and compassion would resolve this not loads of extra staff.

    So "Anonymous | 8-Jul-2015 3:40 pm" I would suggest if you practice in the way that you refer to your colleagues and patients then perhaps it is time for you to move on, I think the NHS could manage without you

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  • Don't be fooled by this, the 1% per year will actually transpire to be 1% over 4 years, held until the fourth year and then we will be informed that the NHS cannot afford 1% pay rise therefore this will equate to 0% rise over the next four years.

    To be quite honest, this government is going to shaft us as much as possible and as quickly as possible.

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  • What a kick in the face. Disgraceful.
    No nurses don't go into nursing for the money, but it would make life a little more comfortable to have a little more.
    For all those who voted for the Tories, hang your head in shame

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  • Wrong people being targetted again.

    Should be rewarding the caring and compassionate people who work in the NHS for the good of the country.

    That way wouldnt need agency nurses and agencies who are rolling in it.

    False economy.

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