NHS pay rises give managers headache

20 Jan 00
Though few NHS managers would deny nurses and doctors their inflation-busting pay awards, the government's acceptance of the review bodies' recommendations has given them an almighty headache.

21 January 2000

The week began with high hopes as the prime minister promised extra cash for the NHS, but these were dashed when the Department of Health denied additional money would be handed out in the forthcoming financial year. Managers then warned that they did not have enough money to fund both the government's priorities and the pay rises.

The realisation of the service's worst fears may be repeated next week in other parts of the public sector as thousands of workers hear of their April pay rises. It is rumoured that teachers, for example, are likely to receive awards of between 3% and 3.5%, putting increased pressure on school budgets.

Traditionally all the review bodies announce their findings on the same day, but the government brought forward the announcement of NHS pay increases in an attempt to stem criticism of its management of the health service following the recent flu outbreak.

This highlighted the shortage of nursing staff, and Health Secretary Alan Milburn said the pay awards would be the centrepiece of a campaign to recruit more nurses. A new television recruiting campaign will be launched next month.

The biggest rises are targeted at 4,500 workers in professions allied to medicine, such as physiotherapists. Their salaries will rise by between 8.1% and 8.4%.

The biggest single group of nurses – the 60,000 staff nurses at the top end of the E grade – will receive 7.8%. Their basic salary will rise from £17,830 to £19,220. Nurses and midwives in other grades will get 3.4%, though enrolled nurses and nurse auxiliaries in Grade C are to receive a 7% increase.

Doctors' pay will rise by 3.3% while a new three-year deal for non-pay review body staff, such as porters, will mean that no-one in the NHS will have a basic salary of less than £4 an hour.

The NHS Confederation welcomed the rises but insisted that they would only increase the cost pressures on the service in the coming year. Its chairman, Stephen Thornton, said: 'Under normal circumstances, with the government making additional resources available to the service for next year, these awards would be broadly affordable.

'However, with all the other financial and service pressures facing the NHS, the next financial year [from April 2000] is set to be one of our toughest on record.'

English health authorities will receive around £500m to carry out government priorities, such as health action zones and the reduction of waiting lists in 2000/01. The Department of Health also has £4m to spend on centrally decided initiatives.

In addition, health authorities will get an extra £1.6bn with no strings attached. But from this pot they must fund salary rises, which the department concedes will add 3.6% to the NHS pay bill; extra pension contributions, which will cost around £200m; and consultants' distinction awards, totalling £50m; as well as finding £70m to implement the European Working Time Directive.

On top of this, health authorities and trusts are predicting a deficit of £200m at the end of this year. The new junior doctors' contract, currently under negotiation, could cost a further £200m.

If the service maintains financial balance – one of its key priorities – and funds these cost pressures, it will spend all but £100m of the extra £1.6bn it will receive.

The lack of funding will be more acute in some areas than others. Though the total cash-terms increase will be around 6.8%, under the NHS resource allocation formula some English health authorities will receive 6.21% in cash terms and others much more, up to 7.7% in some cases.

The awards were given a qualified welcome by the Royal College of Nursing. RCN general secretary Christine Hancock said the increases would encourage experienced nurses to stay in the NHS.

But she added: 'This award will only help to keep these nurses in the NHS if the real-terms increases are continued year on year and if it is combined with the extra cash the NHS badly needs.'

Doctors were disappointed with their 3.3% increase. British Medical Association chairman Ian Bogle said: 'The pay award does nothing to correct the relative decline in doctors' remuneration over the past decade.

'Doctors' pay is now seriously out of line with the pay of other comparable professionals. In failing to recognise this in its evidence to the review body, the government risks worsening the looming crisis in medical staffing.'


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