Fresh squeeze on NHS pay sparks union strike warning

"It is right to take difficult decisions.... it means we can keep more people employed"

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Unions have reacted with anger to news of a fresh round of below-inflation pay rises for NHS staff in England.

Ministers have announced a basic 1% pay rise, but the 600,000 nurses and other staff receiving automatic "progression-in-job" increases, "typically worth over 3%", will not get the 1% as well.

The main health service unions in England said they would consult members on taking industrial action.

Members of the armed forces, prison officers and judges are due 1% rises.

The Consumer Prices Index (CPI) measure of inflation is currently at 2%, and the NHS pay review body had recommended that all NHS staff should get a 1% pay rise - whether they were also entitled to progression pay increases or not.

Public sector earnings versus inflation

The Scottish government has said it will adopt the NHS pay review body's recommendations in full, meaning that all NHS staff in Scotland will receive the 1% pay rise. In addition, NHS staff in Scotland earning under £21,000 a year will get a £300 rise.

The devolved governments in Northern Ireland and Wales have not yet announced whether they will follow suit.

Start Quote

It was the classic Catch-22. Ministers felt on the one hand they couldn't afford to give staff a pay rise, while on the other realising they couldn't afford not to. The result? A pay rise for some, and (arguably) none for others. But the risk is that this turns out to be a fudge that makes no-one happy.”

End Quote

But Health Secretary Jeremy Hunt said implementing the pay body's recommendations in England would be "unaffordable and would risk the quality of patient care".

He told BBC Radio 4's The World at One around 6,000 nursing job would have had to be cut if everyone in the NHS had got the 1% rise.

He said: "The whole progression pay system is mad. I mean someone on a £50,000 salary will get a 4.7% progression pay rise, whereas someone on £14,000 would only get a 2.5% progression pay rise. It shouldn't just be about time served it should be about how well you look after patients."

Unison's Christina McAnea accused the government of mixing up annual pay rises with the increments "designed to reflect the growing skills and experience of nurses and other healthcare workers".

Jeremy Hunt: "I would dearly like to be more generous, but not if it means laying off 6,000 nurses"

'Very modest'

"They are not a substitute for the annual pay rise that is needed to meet the increasing cost of living," she said.

"If the government is set on imposing this change, it clearly doesn't understand how increments work. As it stands, they save the NHS money but if this divisive plan goes ahead Unison will be arguing strongly that staff should be paid the full rate for the job from day one.

"I am appalled that this coalition government can openly boast about the economic recovery and claim that we are all feeling the benefits and then treat health workers so shoddily."

A nurse

But Chief Secretary to the Treasury Danny Alexander claimed that the progression pay increases were often worth 3%-4% and were awarded simply "because of time served in the job" to more than half of NHS workers.

He told the BBC: "The extra 1% should be confined to those who otherwise wouldn't see any pay rise at all.

"That's what the country can afford."

Public sector pay compared with private sector pay

He conceded this was a "very modest increase", but said: "We had two years of a pay freeze, where people who worked for the government didn't get any pay rise at all - except those who receive these increments, who continued to get those even during the years of the pay freeze."

Pay restraint had to be a "big part" of resolving the "huge financial problems we have as a country", he added.

NHS pay facts

  • Senior managers' average pay is £78,513
  • Doctors' average earnings: £74,167
  • Managers' average earnings £49,475
  • Nurses' and midwives' average earnings is £30,854
  • 55% of staff get incremental pay increases
  • 45% don't get incremental pay increases because they are at top of their pay band

Rachel Maskell, of Unite the union which represents 100,000 NHS workers, told the BBC that the pay offer was "the straw that breaks the camel's back - a step too far".

"People have got a right to stand up for their terms and conditions, and the government over the years have taken advantage of the fact that people are professional at their work, they are predominantly women workers, and have made a calculation that they can abuse their staff over their pay," she said.

"Enough is enough, and our members are saying they want consultation over industrial action."

The government said the 1% pay offer for 2014-15, which is to non-pensionable earnings, would be followed up with a 2% pay offer for 2015-16, also to non-pensionable earnings and also excluding those getting incremental increases.

It urged unions to forgo progression pay increases for a year in 2015-16, in exchange for applying the 1% rise across the board to the pensionable salary of NHS staff.

Workers in Northern Ireland said a 1% pay rise would make little difference

Separately, Mr Alexander has also announced that government departments were not contributing enough to their employees' pension funds.

A detailed review of NHS, teachers' and civil service pension schemes was not due to be published until later in the spring, he said.

"But it is already clear that these will show the level of contributions paid by employers have not been sufficient to meet the full long-term costs of these schemes.

"If current rates were allowed to continue, the shortfall would be nearly £1bn a year across the teachers', civil service and NHS schemes.

"The government is therefore taking corrective action, and will introduce new higher employer contribution rates for these schemes from 2015. This will ensure that the contributions paid by public service employers reflect the full costs of the schemes, including the costs of the deficits that have arisen since previous valuations.

Unite's Rachel Maskell says the pay offer is "a step too far"

"This will not have any impact on existing pensioners, on member benefits, or on the contributions paid by employees in those schemes. Instead it will ensure that pension costs are properly met by employers and do not fall as an additional cost to the taxpayer."

GPs' expenses

But Brian Strutton, of the GMB union, said the pensions announcement was a "con trick" to justify the "harsh NHS pay announcement" by suggesting that the cost of pensions had increased.

"But that is not the case. There are no extra costs. Let's not be fooled, there is no justification for the NHS pay review body being overruled."

The government also said that GPs in England would see an increase of 1% to their income, adding that there would also be "movement in their expenses".

The British Medical Association's Mark Porter predicted that GPs would be "unfairly hit" by the changes.

"Despite delivering substantial efficiency savings while at the same time facing ever increasing workload pressures and patient demand, today's announcement will continue to see practice income eroded as practice expenses increase disproportionately to income," he said.

Mr Alexander said it would be left to individual departments in Whitehall to decide whether to offer senior civil servants the 1% pay rise.

Police and crime commissioners, who oversee the 41 police forces in England and Wales, are not due to receive the 1% pay increase.

The pay offer for prison officers is also relevant to England and Wales only.

Salaries for police officers, council workers and teachers are determined in a separate process.

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