DHSC ordered to fund pay rise with ‘reprioritisation and greater efficiency’

The Department of Health and Social Care will be asked to make another round of savings and reprioritise existing budgets to fund a pay rise for doctors, the government has confirmed.

The government confirmed on Thursday that the government would impose a six per cent cash terms pay rise for doctors for 2023-24, which had been recommended by the doctors and dentists pay review body, despite still being in dispute with junior doctors and consultants over their 2022-23 award.

Junior doctors will also receive a consolidated £1,250 uplift, which the government says will mean a pay rise ranging from 8.1 per cent to 10.3 per cent for first year medics. Managers will also receive a five per cent pay rise.

Speaking on Thursday, Treasury minister John Glen said meeting pay demands “well into double digits” were “neither fair nor affordable” and would fuel more inflation.

The minister said there would be “no new borrowing or spending to fund the awards” and that the awards – which also cover other public sector workers such as teachers and police – would be funded by “reprioritising within existing budgets and driving further efficiencies to focus spending where it delivers the greatest value”. 

However Mr Glen told MPs that the immigration health surcharge, a fee levied on foreign workers coming to the UK to cover their use of the NHS, would be nearly doubled, with the proceeds contributing to the costs. HSJ understands this is likely to raise around £400m.

This would be unlikely to cover the full cost of the pay rise, however. The annual cost to the health service of meeting the doctors’ pay rise is estimated at more than £1bn by the independent pay review body, though some of this will be covered by existing funding which is thought to cover a pay rise of up to 3.5 per cent.

It is unclear how much additional cost pressure will be passed on to NHS commissioners and providers, which already face some of the largest budget gaps in decades, and efficiency targets of around 6 per cent.

One CEO, speaking anonymously, said: “To suggest that there is more that could be found to fund a pay award is risible.” Another said “it is simply not feasible to deliver over and above that.”

It also remains to be confirmed by government whether the DHSC and/or NHS will be funded for the Agenda for Change pay rises which have been agreed for this year.

The latest junior doctors strike began today, and consultants strike next week. BMA council chair Phil Banfield said with the 6 per cent figure the government had “missed a huge opportunity to put a credible proposal on the table”. Doctors would continue to take industrial action, he said.

Prime minister Rishi Sunak said: ”Today’s offer is final. There will be no more talks on pay… No amount of strikes will change our decision.”

Inflation is currently 8.7 per cent. Senior managers have been given a 5 per cent uplift, as have Agenda for Change staff, as part of a two-year pay deal struck in the spring.

Steve Barclay said: “We’ve made it clear this pay award is not up for negotiation and urge those unions still in dispute with the government to end their strikes immediately.”

NHS Confederation CEO Matthew Taylor said: “The government cannot say that it is committed to cutting waiting lists and supporting the NHS’s workforce and then not give the NHS the investment it needs to support the new pay award.

“…We understand that the economy continues to be in a very challenged situation but with waiting lists growing and ill-health rising, the government must reconsider its decision on funding this pay deal for the NHS. If not, it must be honest about the serious repercussions that this will have on what the NHS will be able to deliver, including the fact that the PM’s pledge to reduce waiting lists now rests on a knife edge.”

Saffron Cordery, deputy chief executive of NHS Providers, said: “Although the government has made its position on negotiations clear, on this first day of an historic five-day strike by junior doctors across England, it’s vital that the government and unions find a full resolution to prevent more patients paying the price of ongoing disputes. This will require union agreement.

“Trust leaders will also need reassurances about how these pay increases will be funded.”

Updated 17.07 and 21.15 Thursday to include updated statements from Confed, Providers and Steve Barclay.