Treasury uplifts baseline as pay deal gets green light

NHS Providers said the government must honour its pledge to fully fund the pay deal, estimated to cost £4.2bn over three years.

According to the 2018 NHS pay review body report, the Department of Health and Social Care, employers and staff side accept that the tariff is not an appropriate mechanism for moving the additional pay funding to employing bodies. The review body said a separate mechanism would ensure the funds reach employers and not be diverted to other programmes. There were no details on this mechanism as Healthcare Finance went to press.

Phillippa Hentsch, head of analysis at NHS Providers, said: ‘We welcomed the pay deal for staff on Agenda for Change, which has since been agreed by unions’ members. But we were clear that the deal must be fully funded and cover the full term of the three-year agreement.

‘The proposed funding mechanism could leave provider trusts millions out of pocket if it does not take account of all relevant staff.

‘Trusts also face the prospect of a further cost hit, if the government decides on a pay award for doctors of more than 1%.’

The new deal, agreed by 13 of the 14 unions following members’ ballots, will broadly see a pay rise of at least 6.5% over three years. The increased pay will be backdated to the beginning of April and will be reflected in pay packets in July or August.

Prime minister Theresa May said higher pay must be accompanied by a new workforce strategy – workforce will be one element of the new 10-year NHS plan.

‘It is right that we lifted the pay cap and made a significant pay increase a core part of the new offer to over a million NHS staff,’ she said.

The NHS must offer staff greater flexibility and listen to their views about the support they need to deliver world-class care. ‘These things are often just as important as pay,’ she added.

The deal aims to improve recruitment and retention, offering some staff rises of up to 29% over three years. It will also introduce a minimum salary of £17,460 this year – an increase of more than £2,000 that will benefit 100,000 staff.

The deal marks the scrapping of the 1% cap on NHS pay rises. Starting salaries in all pay bands will increase following a simplification of the bands.

Only GMB members rejected the deal, which the union said meant a real-terms cut. Other critics said the increases amounted to little more than the pay rates they will replace once annual increments are taken into account (see Paying it forward, Healthcare Finance May 2018).

Around eight in 10 Unison and Unite members supported the deal. Unison head of health Sara Gorton said it would not solve all the problems in the health service but would ease the financial strain on staff.