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Updated: NHSE confirms £2bn extra pay bill will dent investment

Published on: 19 Jul 2022

Investment in diagnostics and new technology will be hit by the government’s decision to increase NHS pay above the 3 per cent budgeted for 2022-23, NHS England has said.

The government announced on Tuesday that it was accepting the recommendations of all the NHS pay review bodies.

The review covering staff on Agenda for Change recommended: “A £1,400 consolidated uplift for all AfC staff to their full time equivalent salary. The £1,400 uplift should be enhanced for the top of Band 6 and at Band 7 so it is equal to a 4 per cent uplift for those staff.”

Overall, this is equivalent to a 4.8 per cent annual increase. However, because – with the exceptions of the uplifts at band 6 and 7 and increases for living wage for band 1 and some people at band 2 – this is a flat £1,400 across all bands, those in higher bands will receive a lower percentage payrise. For those at the top of band 9, this is as little as 1.3 per cent. 

Very senior managers will get 3 per cent. 

Eligible doctors and dentists will receive an increase of 4.5 per cent, as recommended by the Doctors’ and Dentists’ Pay Review Body. The award does not cover those “already in multi-year deals”, such as junior doctors. 

The consolidated pay uplift will be backdated to April after ministers accepted the recommendations of the independent NHS pay review bodies in full.

Reflecting with government

NHS England on Thursday wrote to local NHS chief executives about the deal, confirming the total cost not covered in current allocations — which were based on a 3 per cent uplift — would be about £2bn.

It said: ”We will allocate an additional c£2bn to systems and NHS England commissioners… [Commissioners] are expected to reflect this increase in their contracts with trusts in line with a 1.7% uplift to tariff. The allocation will also take account of cost increases on services provided by non-NHS providers, and the additional costs of providing education and training. Funding must be flowed appropriately to all providers.”

It added: ”The additional cost will require NHSE and the Department to reprioritise centrally held-budget lines including national technology programmes. Details will be set out shortly. These savings will allow the NHS to focus on frontline patient care this year but will impact on the ability to deliver on specific plans and goals. We will reflect on these additional factors with government as we continue work to update the long term plan over the summer.”

The letter calls on local leaders to “continue to focus” on the covid backlog, including in mental health, and said it is “critical that we continue to increase capacity in and out of hospitals to support performance and patient flow, particularly for emergency services”. Plans and national funding to help deal with ambulance delays and long ED waits, including more virtual wards, are to be confirmed “over the coming weeks”, it says.

On Thursday, in a public statement an NHSE spokesperson said it was “right that the government has honoured the pay review bodies’ recommendation” as “without this increase vacancies would only worsen, impacting on the care staff can give”.

But they added: “Given the requirement to fund this within existing Department of Health budgets, we will need to release money from existing programmes, regrettably impacting on the planned rollout of tech and diagnostic capacity across the health service.”

Both tech and diagnostic investment is a key part of the NHS’s plan to reduce the elective and cancer care backlog.

King’s Fund chief executive Richard Murray said the unbudgeted award would ”inevitably impact the health service’s ability to meet patients’ needs and makes it even harder to see how the NHS will be able to meet government targets to bring down waiting lists.

“If the government wants the NHS to fund this pay rise out of existing budgets, then government should also be clear with the public that NHS services will be cut as a result.”

The doctors’ pay review body estimated that its recommendations “would add approximately £425 million to the HCHS pay bill in England, against a total DHSC Resource Departmental Expenditure Limit in 2022-23 of £167.9 billion.”

According to the government announcement: ”The average basic pay for nurses will increase from around £35,600 as of March 2022 to around £37,000 and the basic pay for newly qualified nurses will increase by 5.5 per cent, from £25,655 last year to £27,055.”

However, the pay award will amount to a real-terms pay cut for many staff as inflation rose to 9.1 per cent in the 12 months to May 2022. The Bank of England predicts it will increase to 11 per cent by October.

The latest uplift comes after the government announced a 3 per cent pay award for NHS staff last year, having increased it following severe criticism over a recommended 1 per cent increase.

Industrial action

British Medical Assocation chair Professor Philip Banfield said: ”Today’s announcement represents a brutal pay cut that will come as a bitter blow for doctors across England.”

He added: ”that the UK Government has excluded junior doctors in England, even from this year’s paltry offer due to a multi-year agreement made way before we could have anticipated the damage wrought by the pandemic and sky-high inflation, is a disgrace. It exposes their contempt for my already low-paid colleagues who will be rightly furious.”

He conluded that the profession was ”on a collision course with the Government, the consequences of which will be the responsibility of ministers alone.”

Unison head of health and chair of the NHS group of unions Sara Gorton said today’s pay award was ”nowhere near what’s needed to save the NHS”.

She said: ”Demoralised and depleted health workers needed to know that ministers are serious about solving the staffing crisis and investing in the future. The way to do that was through a significant pay award.

“With the pandemic barely behind us and the growing cost-of-living catastrophe, NHS staff, their bank accounts and health services are all running on empty.

“The government’s shown it’s prepared to sit by and watch waiting lists grow, ambulance call times lengthen and patient suffering increase.

“Many will be seriously considering industrial action after this pitiful increase and a majority of the public will be behind them.

”Ministers can’t continue to allow wages to fall and expect staff still to be there. The simple formula for recruiting and retaining enough staff to tackle the treatment backlog and avoiding a damaging dispute is to ensure NHS workers have a decent pay rise. This isn’t it.”

Update: This story was updated at 10:00 at 20 July to note the percentage increase for those in higher bands. It was updated again at 3.30pm to include details of NHSE’s letter to local chief executives.