A 1% pay rise – but not for staff on progression pay

All NHS staff and salaried doctors,except the most senior managers, will get a below-inflation 1% pay rise next year, it has been announced – but not if they are on progression pay.

Unions have accused the government of ignoring the independent pay review body and “expecting NHS staff to be grateful while their contractually agreed terms of employment are torn up”.

The government’s public sector pay review stated that those getting a progression pay increase (incremental pay increases for time served in a role, typically worth over 3%) will only receive this. And anyone not getting progression pay will get a 1% payment instead.

About 400 ‘very senior managers’ in the NHS who do not receive progression pay will not get the 1% payment either.

The government says the pay restraint policy will save over £200m in 2014-15 and over £400m in 2015-16, which will be reinvested into the health service to protect jobs.

Dean Royles, chief executive of NHS Employers, noted that staff have worked incredibly hard in some very challenging circumstances when the NHS has been subject to exceptional scrutiny. He said: “For many staff a pay increase would of course help ease some financial pressures and for others a pay award would be a welcome recognition in a difficult year. We know how tough this decision will feel and how disappointed staff will be.

“The evidence we gave to the review body said any rise would add to already significant cost pressures. Employers are recruiting more front line staff with no additional money and this is not sustainable. The simple fact is that the decision to have no annual pay increase for those already eligible for increments will help ensure more that staff remain in employment than would otherwise be the case.

“The announcement will however give employers some certainty over pay for the next two years and we can now turn our attention to how we can come out of this period of pay restraint in a mature way. I know trade unions will be angry but hope they will recognise a shared desire to maximise job security for staff and work with us on creative solutions.”

To some though, the government’s decision toreject recommendations to increase pay across the entirety of the NHS by 1%, is unforgivable. Christina McAnea, head of health at Unison, said the Coalition had taken a scalpel to the Pay Body’s report and won’t escape the anger of NHS staff.

McAnea added: “It’s a disgrace that 70% of nurses and midwives will not even get a pay rise this year – what sort of message does this give to the value this government places on dedicated NHS staff?”

She said: “Increments are designed to reflect the growing skills and experience of nurses and other healthcare workers and are closely linked to competency. They are not a substitute for the annual pay rise that is needed to meet the increasing cost of living.

“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.”

The Royal College of Nursing (RCN) has also reacted angrily to the government’s decision not to award a cost of living increase to the majority of NHS staff. The decision ignores the recommendation of the independent pay review body for NHS staff, it says.

Dr Peter Carter, chief executive and general secretary of the RCN, said: “The government is once again ignoring the independent pay review body, holding the Agenda for Change pay system to ransom, while expecting NHS staff to be grateful while their contractually agreed terms of employment are torn up.

“Less than half of nursing staff at the top of their pay increment will get a paltry 1% rise, following three years of pay restraint. The rest will simply get what they are contractually entitled to, if they can demonstrate they have developed their skills in the previous year. On top of this the government shows how little respect it has for NHS staff by holding a gun to their heads and forcing them to choose between continuing to receive their contractually agreed pay increments, or a very small pay uplift to help deal with rising costs of living.”

Chief secretary to the Treasury Danny Alexander said that public sector workers make a vital contribution to the effective delivery of public services.

“We need to continue with public sector pay restraint in order to put the nation’s finances back on a sustainable footing. We are delivering on our commitment to a 1% pay rise for all except some of the most senior public sector workers,” he said.

These were the 2014/15 recommendations of the NHS Pay Review Body:

• A 1% increase to all Agenda for Change pay points from 1 April 2014.

• A 1% increase to the High Cost Area Supplement minima and maxima from 1 April 2014.

• That the parties should take urgent steps to provide data on both long-term and short-term vacancies, to be available for consideration for our next review. We would expect the data available to allow us to identify whether there are any current and/or developing problems in specific geographies or sustained shortages in specific occupations.

Our observations are:

• Progress on a wider seven-day service is urgently needed. The parties should now rapidly negotiate and agree changes to Agenda for Change alongside negotiations for medical staff.

• There is a pressing need to manage and apply the agreed pay progression arrangements properly through the application of a simplified Knowledge and Skills Framework in order to ensure that pay progression is linked to competency development and performance, as was intended within Agenda for Change.

• We urge the parties to agree quickly a thorough review of the Agenda for Change pay structure, including the operation of incremental scales, so that it mightbetter support the challenges facing the NHS in terms of both patient care and affordability. We suggest that if the parties find it difficult to agree we would be prepared to look into this if given an appropriate remit and evidence.

It also said: “The evidence we received from the Department of Health and NHS Employers implied that incremental progression cost 2%. However, we understand that the net cost was 0.6% in 2012/13 and may well be lower this year as more staff reach the top of their pay band. Therefore, we do not consider incremental pay to be costly, in net terms, because of new staff being recruited to the bottom of the scale, replacing, in general, staff at the top point.”

In his written ministerial statement, health secretary Jeremy Hunt called those proposals "unaffordable".

He says: "The NHSPRB’s recommendations for a 1% consolidated rise for all staff, on top of automatic increments, are unaffordable and would risk the quality of patient care. Without a pay rise, incremental pay increases already commit nearly £1billion every year for all NHS employees and add 2% each year to the NHS pay bill for Agenda for Change staff. The PRB proposals suggest a pay rise that would risk reductions in front line staff that could lead to unsafe patient care. It is not possible to maintain appropriate numbers of front line staff, give a general pay rise of 1% and pay for incremental progression.

"The government is therefore adopting an approach by which all staff will receive at least an additional 1% of their basic pay next year. All staff who are not eligible to receive incremental pay will be given a 1% non-consolidated payment in 2014/15. Other staff will receive an increase of at least 1% through incremental progression.

"It is our intention that in 2015/16 the same approach will apply and staff who are not eligible to receive incremental pay will receive a non-consolidated payment of 2% of pay, whilst other staff receive incremental progression. As this will be a two-year pay award, the NHSPRB will not be asked to make recommendations on a pay award for Agenda for Change staff in the 2015 pay round.

"NHS staff are dedicated and hard working and the government would prefer all NHS staff to receive a consolidated 1% increase. This would be affordable if incremental progression was frozen for one year in 2015/16. If the NHS trade unions were prepared to agree to this then the Government would be prepared to reconsider the position and make a consolidated award as other public sector workforces are receiving." 

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