News / Pay rise will cost £150m

The 1% pay rise in 2014/15 for agenda for change staff at the top of their pay band will cost the health service £150m, NHS Employers has said.

Health secretary Jeremy Hunt rejected the 1% uplift proposed by the NHS pay review body. Instead, staff eligible for increments will receive those alone, while those at the top of their scales will get a 1% increase.

The approach will be repeated in 2015/16, with a payment equivalent to 2% of pay. The rises will be non-consolidated, so will be neither pensionable nor taken into account when calculating allowances.

About 600,000 staff members were eligible for incremental increases, worth typically more than 3%, Mr Hunt said. However, very senior managers who do not receive increments will not get the 1% uplift. Overall, the NHS will save £200m in 2014/15 and £400m in 2015/16.

Unions were angered, but the government said it would consolidate the payments if the unions agreed to an increment freeze in 2015/16.

NHS Employers chief executive Dean Royles said: ‘Even with limiting the increase to staff at the top of their pay scales, employers still face a £150m pay bill pressure. This is bound to have an impact.’ The figure does not include the cost of increments.

NHS employer pension contributions will rise 0.3% to 14.3% from 2015/16. This is not as high as NHS Employers had feared.