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Thousands excluded from NHS pay rise in ‘two tier system’

Published on: 26 May 2023

Tens of thousands of outsourced staff are at risk of missing out on part of the NHS pay deal agreed with government, HSJ has learned.

Last month, a majority of NHS staff council unions agreed to a new pay deal, which health and social care secretary Steve Barclay said would be implemented for “all staff on the Agenda for Change contract”.

However, it has emerged that staff working in social enterprises, charities, outsourced services and wholly owned subsidiaries – many of whom work under AfC terms and conditions or have their pay index-linked to the contract – are at risk of not getting part of the uplift. Some primary care staff may also be affected.

The Department of Health and Social Care told HSJ that funding for extra non-consolidated payments for 2022-23, which were part of the deal, would only be covered for staff directly employed by NHS organisations. The one-off payments are worth an average of £2,000.

Some employers may be in a position to fund the uplift themselves, but there are fears many will not be able to.

There are tens of thousands of staff working in outsourced services across community and acute care, sexual health services, prison health, mental health and other sectors.

Matthew Taylor, chief executive of the NHS Confederation, warned: “If unaddressed, this oversight risks the creation of an unequitable, two-tier system for different staff delivering health services in England.”

Mr Taylor added the lack of additional funding would create “significant and unnecessary uncertainty for non-statutory providers and will undoubtedly impact patient care” and said many might struggle to cover increased costs and retain part of their workforce.

“We urge the government to review its position and agree to fund the pay award for all staff on AfC terms and conditions, including those on local authority contracts,” he said.

Peter Holbrook, chief executive of Social Enterprise UK, said: “Some of these employers will seek to pay the 22-23 ‘bonus’ their staff deserve, even if the government doesn’t fund it – but some simply don’t have the money to do so, meaning this will put services and patients at risk.”

“We still expect the department to take urgent steps to solve this – as they did previously in 2018 – before staff, services and patients are adversely affected.”

The DHSC would not provide a written statement but confirmed the one-off payments for 2022-23 would only cover staff directly employed by the NHS. The payment involves a one-off award of 2 per cent of their 2022-23 salary; and an “NHS backlog bonus”, which varies by pay band.

The DHSC said the 5 per cent consolidated pay uplift for 2023-24 would be funded for all Agenda for Change staff.