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‘Significant’ pay rise for nurses would have ‘little’ impact on inflation

‘Significant’ pay rise for nurses would have ‘little’ impact on inflation

A pay rise for nurses and other public sector workers of more than 10% would not significantly contribute to inflation, according to new research.

Research published by the Institute for Public Policy Research (IPPR) think-tank suggests that a 10.5% pay-rise for the average public sector worker would only add 0.14 percentage points to inflation at most.

IPPR researcher and author of the report Joseph Evans said these findings run counter to the government’s claim that a bigger pay rise for the public sector is impossible due to the risk of spurring inflation.

‘It’s wrong to claim that giving the public sector a more meaningful pay rise will further embed inflation,’ said Mr Evans.

‘Research shows that there is very little inflationary impact from a significant pay rise, but that the need to stop the fall in living standards for public sector workers is urgent.’

According to the Office of National Statistics, UK inflation had fallen to 7.9% in June, the lowest in 15 months and down from peaks of over 10%.

However, the IPPR said that stubbornly high rates on inflation mean that an average public sector worker would still be £1,400 worse off in real terms compared with just before the pandemic, even after receiving the latest pay rise.

Last week, millions of public sector workers including salaried GPs received a pay rise of at least 6% following the acceptance of recommendations from independent pay review bodies. Though this has raised question marks over what impact – if any – this would have on the pay of general practice nurses.

This is separate to the pay deal which formed the centre of the dispute, and eventual industrial action, between the government and Royal College of Nursing (RCN).

Members of the RCN voted to reject a 5% consolidated pay award for 2023/24 and a one-off award for 2022/23 and a Covid bonus for 2023/24. However, the pay deal was ultimately implemented following majority approval by other trade unions.

The IPR researchers claimed that pay rises in the public sector have not kept pace with inflation.

And healthcare staff, the report found, were 6.3% worse off in the beginning of 2023 than in 2022.

RCN director for England, Patricia Marquis, said the report demonstrated ‘that keeping nursing staff pay rises below inflation is a political choice’.

Ms Marquis said: ‘Over a decade of below-inflation pay rises for nurses has harmed patients and nursing staff alike.

‘It has contributed to pushing tens of thousands of nursing staff out of the profession, put unrelenting pressure on remaining staff and left patients receiving a lower standard of care.’

The IPPR called on the government to provide a 10.5% pay uplift for public sector workers for 2023-24 to restore public sector pay to 2019/20 levels at a cost of £7.2bn on top of the cost of last week’s raise.

The think tank said this should be followed by a commitment to raise public sector pay above inflation every year for the next five years, primarily funded by tax increases and the creation of a wealth tax.

A spokesperson for the Department of Health and Social Care did not respond directly to the report but referred to comments made by Steve Barclay on the announcement of the public sector pay rise.

In this statement the health secretary said he had ‘made it clear this pay award is not up for negotiation’ and he urged ‘unions still in dispute with the government to end their strikes immediately’.

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