With nurses set to vote on the Government’s latest pay offer, a political economist and professor of accounting has branded the NHS pay deal ‘economic madness’.
A new pay deal for NHS nurses was announced yesterday (17 March) that would give NHS nursing staff a one-off payment for the current financial year 2022/23 of around 6%, worth between £1,655 and £3,789, and a 5% consolidated (permanent) pay increase for 2023/24.
However, Professor Richard Murphy, professor of accounting at the University of Sheffield and co-founder of the Tax Justice Network, told Nursing in Practice that he was ‘completely baffled’ by the unions’ decision. He said: ‘It is a terrible pay offer, it is economic madness to try and do the deal in this way.’
An issue with the new pay offer, Mr Murphy suggests, may be that much of the pay rise is not consolidated into increases for the future; meaning nurses wages will not grow with inflation into the future.
‘In 2021 the pay offer was 3%, but inflation was 5% so nurses ended up getting a less than inflation matching pay rise. Now we’ve got the offer for 2022, which was 4% from the pay review body, plus an average 6% extra to make a 10% pay offer for 2022.
‘But this comes in two quite critically separate parts. The 6% is a one-off lump sum, so although it looks as though there is an inflation matching pay offer, when they get to 2023 the problem kicks in.
‘The pay rise of 5% sounds okay for 2023 when inflation is forecast to be 2.9%, but this isn’t based on the 2022 pay. It is only based on the pay that was increased by 4% [in 2021-22]. Therefore, the base figure on which 5% will apply is too low, and this means the pay deal is worth a lot less than it appears at face value.’
Going forward, this means that nurses will continue to be awarded below inflation pay rises every year from 2023 onwards and ‘in real terms, nurses will be roughly 6% worse off every year.’
Mr Murphy also pointed out that even if inflation fell to 2%, prices would remain at their inflated levels, this means that nurses ‘will be worse off’.
‘When nurses get to 2024,’ says Mr Murphy, ‘and realise they didn’t get an inflation matching pay rise by any means, they will be saying: ‘hang on, we’ve been conned’. But, by that point the public sympathy for them going out on strike will be very low. This is what the Government is relying on.
‘The nurses the ability to go on strike again, but they’ll have got an absolutely dire pay offer. NHS staff would have voted to make their lives miserable. NHS staff will be in financial difficulties because of this.
‘Because the private sector is not doing this kind of one-off pay rise, they will not have the same kind of cumulative problems. Therefore, we are going to see a significant loss of NHS staff and the NHS itself will end up undermined. This is a bad deal for the NHS, and it’s a bad deal for the public.’