Pay rise above 3% could lead to service cuts, NHS England warns

The NHS may have to cut services, investment to improve services or capital to maintain essential services if staff are awarded a pay rise above 3%, NHS England has warned.

A report, presented at the NHS England board meeting yesterday, said the NHS has only been funded for a 3% pay settlement this year for Agenda for Change staff and doctors not covered by current multi-year agreements, and any extra would have to come out of existing budgets. 

The document – written by Mr Kelly, alongside NHSE chief operating officer David Sloman, chief delivery officer Mark Cubbon and chief financial officer Julian Kelly – said ‘it is right that the essential work of frontline NHS staff tackling the pandemic and recovering services is properly recognised and rewarded’. 

‘It is also an operational necessity if we are to retain the staff needed to make further inroads into long waits and unmet need and continue to respond to significant operational demands,’ it added. 

However, it warned that an increase above 3% ‘would have to be absorbed through service cuts – for example, planned elective care – or reduction in investment to improve services – for example, to ensure a basic level of technology in providers – or capital to maintain essential services’. 

‘For illustrative purposes, an increase of 1% in the final settlement creates a pressure of £800m-£1bn,’ it added. 

The UK government is expected to announce the pay rise for NHS staff in England for 2022/23 imminently. 

The RCN is calling for a 5% above inflation pay rise for nursing staff ‘to make people feel valued, prevent more from leaving and keep patients safe.’ 

But a 3% pay rise would represent a real-terms pay cut, as data released by the Office for National Statistics on 22 June shows the inflation rate for May 2022 rose to 9.1%. 

Responding to the board papers, RCN England’s director, Patricia Marquis, said NHS England was ‘right to recognise the “operational necessity” of a fair pay rise for nursing’. 

She said: ‘We fully agree that the forthcoming pay rise is integral to the recruitment and retention in nursing and the very viability of the services they work in. The number of people quitting is increasing and that must be addressed. 

‘After a decade of real terms pay cuts and in the midst of a cost-of-living disaster, this year’s pay award needs to be a big one – 5% above the level of inflation to make people feel valued, prevent more from leaving and keep patients safe. This must be fully funded with additional investment from Government.’ 

Ms Marquis warned that a pay rise of only 3% will ‘do nothing to stem the tide,’ and urged new health secretary Steve Barclay to ‘rise above the political mayhem engulfing government and indicate his support for nursing with an immediate and substantial pay rise, already three months overdue.’ 

In June, the Scottish government made a 5% pay increase offer to NHS Scotland staff on Agenda for Change contracts. 

In May, RCN members met with London’s mayor Sadiq Khan for talks about the ‘current nursing workforce crisis’, with the rising cost of living and staff shortages at the forefront of discussions. 

The RCN’s most recent survey showed more than 80% of shifts faced staff shortages.