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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)

  • @Anonymous | 8-Jul-2015 4:07 pm
    ''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.''

    You have quite misunderstood the situation. I came from a dementia care background. The ward itself later 'disappeared'. You presume I was not observing but rather caring - or not - as you imply. There was, at that stage, no way of preventing someone who was wondering from going into other rooms and removing I.V.s. when more staff than were on the ward were needed for one patient. This was, at that time, more than routine stress. Much of this was observable, by me and other visitors - trained or not -over a period of time. I hope that you, too, would have both reported this and understood where poor work differed from an inability for staff to cope with multiple emergencies outside of A&E. Most are used to coping with a number of emergencies in addition to routine, but if you were to double or treble various stress-points, there would be a point when patient safety could not be guaranteed. And, within that context, having to fetch staff from another ward that is, in theory, higher dependency, is not something to preserve but to challenge. You cannot imply that the same staffing level applies to all cases. You manage because one or two additional stresses are worked into the normal; when the ward changes to the extent that it needs renaming (partly true in this case), then this has to be escalated (and so it was). You visit long enough, you observe enough to make a vaild complaint.

    If you viewed my comment about dementia unfavourably. Perhaps the weariness of nearly losing my own relative through neglect that a whizz around the BNF would have highlighted - and we did - made me seem lazy. But alas, my sigh was because on the occasion alluded to, these staff were not at fault, which is almost worse because management are far slower to shift, and so the problem remains.

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  • The coalition government dipped its toe in the water to test reaction to the changes in the NHS pension, which for many years Ben in surplus. We stood by, the government made unnecessary changes and they now have permission to treat us unfairly.

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  • Many pertinent points having been made above, I'd like to add my thoughts.

    Regarding restraint: yes, it speaks for itself, 11% for MPs v. 1% for nurses. Restraint used here by politicians is a Humpty-Dumpty word sc. used to mean what they want it to mean. Ergo it has no meaningful significance for nurses.

    Strike action: as we all know, politicians have for decades taken advantage of nurses in the full knowledge that they draw the line at striking. The rationale for not striking is manifestly to avoid compromising patient care. What is always overlooked is care of the nurse in terms of stress, exhaustion, financial worries sc. making ends meet, etc.

    It can be argued that in all the circumstances there is a cogent case for taking industrial action. The RCN declines to support taking this course and thus, in my view, exposes its fundamental weakness. I was briefly a committee member of the RCN (before illness caused me to have to vacate my seat) and I argued strongly that an associated but separate nursing union needed to be established. It ill behoves a Royal College to be directly involved in industrial action, therefore a nursing union arm is needed to take (IF that is what it takes) strike action. The was some support for my argument but the majority view was that the RCN was stronger if it combined Royal Collegeship with union function. I continue to disagree profoundly with this approach.

    In my view, advantage will continue to be taken of nurses for the foreseeable until a realistic union is formed that is prepared to take whatever action - albeit with the support of its membership - is deemed necessary in order to protect the well-being of nurses.

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  • I really do wish people would stop banging on about MPs and 11% rises. There are 650 of them not the tens of thousands of nurses that would love a decent pay rise - so the impact is less.

    Also the 11% rise is a rationalisation of their T&Cs meaning the end to the expenses debacle that they have profited from.

    Why oh why are we not picking on footballers who earn a staff nurse's annual salary in a week? This is propped up by subscription tv money - far easier to derail by not subscribing.

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  • 12:36pm

    You're missing the point by a mile. Go back to sleep.

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  • No surprises, a Tory government say they care for nurses + NHS, but their actions is definitely not caring and devalues nurses. Those who voted Tory will wonder if they're going to get what they wanted, pay restrictions, reduced nursing staff, poorer care of patients. This will not help patients outcomes, will not help recruitment + retention of nurses + will increase agency spending.
    Some nurses have retired early, others quit, + those remaining are looking to work agency shifts on their own time as most organizations don't pay overtime - so retains security of a substantive post.
    The majority of nurses did not vote against pension changes, to go on strike, for pay increases or campaigned/lobby previous government for better changes, we are seeing the results of their apathy.

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  • I wonder if people who think they're rich and voted Torys hoping that they're in it together with the really wealthy people will realize they're right.

    We'll be in the sh1t together, people will pay much more for care, to carers, nurses, homes + services as they will be means tested due to social care cutbacks + already happening with healthcare rationing. It's worrying how much money is needed when someone needs 24/7 care. Not much change from a £million mansion.

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  • michael stone | 9-Jul-2015 10:09 am$

    what do you expect. I am sure nurses could do without your silly remarks

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  • I work very hard physical + mental. My pay is not reflecting the amount of work I do, as it is much too low. I have compared other jobs' workloads I cannot find one that is the same, all are better paid even with less stress levels.
    If the wards were well staffed then I can accept what I get, but not when I am doing three people's jobs and working on adrenaline throughout my shift. This job is not good for my health so I will retire early.
    Nursing causes high risk of heart disease and cancer.

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  • Nursing pay and conditions will never improve whilst there are so many nurses bleating on about how 'privileged' they feel to be doing the job.
    I got to the point where I didn't feel I was getting just reward for a physically and mentally demanding job with no management support and colleagues who were, in the main, apathetic and would moan continuously about pay and the ever increasing workload but never put their heads above the line to change things.
    I literally walked out one day when my manager decided to have another hissy fit.
    I was lucky to be financially able to do it and after 3 years I don't regret it at all.
    I just wish that everyone who is as desperately unhappy as I was could do the same.
    42 years of nursing - the majority of which were great. The last 8 were absolute hell.

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