March 2014

NHS Pay settlement briefing

What is the settlement?

England: PRB said 1% for all; England Dept Healthsay unaffordable and will give only 1% non-consolidated sum this year to pay points at the top of the pay band. Will repeat the process next year (awaiting detail on how this would be calculated). Would make this consolidated if staff agreed to freeze increments in 15/16

Scotland: 1% to all pay points (consolidated) with additional sums at bottom to take above Living Wage levels

Wales: No news today but remit was for 1% to all apart from at the very top

N Ireland: No news today but remit was for 1% to all

What we will be doing: will be talking to members – expecting them to be very angry, not least because this looks set to cement pay misery until 2017 and set colleagues from different countries apart. Not ruling out strike but acknowledge that health staff do not take this lightly as has impact on patient care – time between now and our health conference to take temperature of membership and decide on best course of action.

General points

  • By denying 1% to 60% of staff not at top of paybill, the Govt is saving £296m
  • Govt has already taken cash from cuts - 2.1 billion clawed back by the Treasury for the 2012/13 financial year
  • Cost of the unnecessary reorganisation of the NHS in England – 1.5bn (DH Ministerial statement – July 2013)
  • £102bn – amount predicted to be paid out in shareholder dividends over 2014 (Capita Monitor report 2013)
  • last year, Manufacturing and Private sector services had salary growth above that of the public sector for all those but the very low paid (around 17k)(IDS)
  • Drives a further wedge between nhs staff doing the same job in different areas of the UK – is this the end of a UK-wide workforce? What will the impact be on recruitment and retention in border areas?
  • Over a third of NHS staff (non medical) are paid below £21,000
  • With over half of our members saying they have had an increase in the number of patients they see, there is ever more need to make sure that the NHS can recruit and retain high quality staff.

Cost of living arguments

  • Particular cost of living increases LAST YEAR (ONS):
  • travel – 9.1%
  • seasonal food 9.1%
  • University Tuition fees – 19.7%
  • Let’s be clear – 1% is not enough to meet the massive increases that health staff have had to cope with. But, 1% is what they expected when they heard the chancellor’s statement last year. We imagine that staff will feel that yet again they have fallen victim to slippery political game-playing, with them the losers.
  • Increases in costs of living plus Osbourne’s freeze mean most NHS staff have had their pay cut by 8-12% between 2010 and 2013

Case studies

Degree level entry job -Nurse, paramedic or health centre business manager with at least seven years’ experience, on the top of Band 5:

  • If pay had risen in line with inflation, would now be earning just over £34,000
  • actually earning just over £28,000 (includes the 1% uplift announced today)

Higher level health care assistant; student paramedic; medical secretary - with at least 7 years’ experience - at the top of Band 3:

  • If pay had risen in line with inflation, would now be earning over £23,000
  • actually earning just over £19,000 (includes the 1% uplift announced today)

There are particular pressures in London:

  • From January 2014, commuter rail fares will increase by an average of 4.1% and by as much as 9.1% on some services.
  • Rents rose by 4.9% between June 2012 and June 2013 – twice the rate of inflation
  • House prices rose by 10% in the year to December 2013

Unfairness of delivering at top of band only:

  • The annual pay rise is meant to assist staff to meet the massive increase in living costs. This tactic means that 58% of staff will get nothing.
  • Govt say they want progression even more closely linked with competency yet here they are using it as a substitute for the cost of living uplift.
  • Rewarding those who have been in post the longest does not fit with Osbourne’s own arguments about ‘time-served’ progression
  • Exposes that Govts agenda is just about cutting costs and corners
  • Progression is competency-based and recognises the increased knowledge and skills that staff acquire – the PRB recognised this in it’s23rd report, saying that it was not appropriate to conflate incremental progression with the annual cost of living uplift
  • This is divisive – means that staff who are starting work now not only have to cope with increased workloads, more unpaid extra hours and fewer opportunities for promotion but don’t get the same package, not because they don’t work as hard or have fewer skills, but because they have been there for a shorter period of time.
  • Osbourne described progression as ‘antiquated’ when in fact competency pay is widely used in the private sector as well.

Unfairness of not uplifting lowest two points to Living Wage

  • Line – we are deeply disappointed that the Government has failed to lift those staff on the bottom 2 pay points out of in-work poverty
  • This is a sleight of hand – taxpayers will end up picking up the bill through in-work tax credits
  • The bottom 2 pay points (bands 1 and 2) are below the Living Wage
  • Cost of paying living wage is relatively small –see figs below
  • Over a third of NHS staff (non medical) are paid below £21,000
  • Scotland has made a commitment to deliver the Living Wage in the NHS - means the lowest pay points will be changed
  • Cutting pay affects whole families - over half of our members working in the NHS have school-age children (source – our survey); a third are carers for elderly relatives and 20% have infants.
  • 24.8% inflationary costs incurred by lowest paid since 2008 (Joseph Rowntree Foundation). The cost of implementing would be relatively small (19 million)

New Living Wage Rates (4 November 2013)

  • £7.65 an hour UK (2.7% increase)
  • £8.80 an hour in London (4.1% increase).
  • £664 uplift to pay point 1 and £305 uplift to pay point 2.

Cost of Implementation:

  • England - £17.6m
  • Scotland - approx £605,000
  • N.Ireland – approx £240,000
  • Wales – approx £870,000
  • Total – £19-20 million across all 4 countries

This isn’t about saving jobs as the Govt claims

  • They dangle this like a threat but are actually making cuts to both. Last year over 10,000 jobs were lost as a result of the unnecessary re-structuring of the NHS in England. We are currently trying to count the cost of ‘downbanding’ where whole grades of staff are re-graded for budget reasons. Govt have confirmed that they still expect over all staff numbers to drop over the next two years. Pretending is a trade off won’t wash with staff who are constantly having to deliver more for less.
  • Francis report identified the importance of good staff engagement and morale in delivering high quality patient care. Over half of our members reported an increase in the number of patients/clients and more than 60% reported that they have been given additional duties. Telling over half the workforce that they are not worth even a tiny pay rise won’t help to engage them in meeting the massive challenges facing the NHS.
  • Effectively telling health staff that they should be grateful they have a job is insulting, particularly at a time when the chancellor is trumpeting the so-called recovery of the economy.

ends