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EXCLUSIVE: NHS Employers backs pay freeze

Patient care will suffer unless the NHS pay freeze is extended into a third year, the body representing all major NHS employers is to warn.

HSJ has learned NHS Employers is to ask the Doctors’ and Dentists’ Review Body to extend the pay freeze for a further year, claiming it is “essential to protect services and minimise job losses”. It is understood NHS Employers will subsequently recommend pay is frozen for all groups of NHS staff.

Across the public sector, the government had indicated it would allow a below-inflation 1 per cent increase for staff. However, HSJ understands NHS Employers will say such an increase is not needed in the NHS when workers continue to receive automatic incremental pay rises under Agenda for Change rules.

Approximately 70 per cent of NHS trusts’ budgets is spent on pay. A 1 per cent increase is projected to add hundreds of millions of pounds to trusts’ overall bill, hampering the NHS’s attempts to hit its efficiency targets.

NHS Employers will tell the review body that pay will make up an increasing proportion of trusts’ cost improvement programmes, rising from 57 per cent of total savings in 2012-13 to 63 per cent in 2014-15.

The body will also say incremental “drift”, where staff progress automatically through pay bands on the Agenda for Change framework, adds around 2 per cent to each NHS trust’s pay bill annually.

The flat rate £250 increase for workers earning below £21,000, as part of the two-year pay freeze for other groups, has added a further 0.4 per cent.

In total, the two-year pay freeze from April 2011 to March 2013 was predicted to save £3.3bn.

Automatic rises for doctors, who are covered by a separate contract, can range from 3-8 per cent of pay a year, according to NHS Employers. For wider NHS staff, increments can result in increases of 1.8-3.7 per cent a year.

HSJ understands NHS Employers will use its submission to the review body to say: “The current national pay and conditions arrangements are increasingly not affordable for employers… who are faced with the task of meeting growing demand and sustaining the quality of patient care while achieving unprecedented efficiency savings of up to £20bn by March 2015.”

NHS Employers will add: “There is no evidence from employers that any increase in the national scales is necessary for the recruitment, retention or motivation of staff.

“Taken together, the financial challenges to the service and the general financial outlook for the UK suggest to employers that further restraint on pay costs will be needed for some time ahead.”

The issue will add to existing workforce tensions at a time when NHS Employers is trying to secure an agreement from health unions to dilute terms and conditions, including incremental pay rises, by modifying Agenda for Change.

Union leaders have threatened to walk away from the talks after a group of 20 trusts in the South West formed their own consortium to consider breaking from the national framework.

In 2010-11, NHS Employers tried to negotiate a national deal with unions to freeze increments in return for promising no compulsory redundancies but the offer was rejected.

The Department of Health and unions are expected to submit their own evidence to the review body before the end of the month.

The move is likely to add to growing anger among unions, with public sector pay in the spotlight at this week’s Labour conference in Manchester. Party leader Ed Miliband and shadow chancellor Ed Balls provoked union outrage by backing the current pay freeze.

Unite response

Unite’s head of health, Rachael Maskell said: “Reports that the organisation representing all the major health service employers is proposing a pay freeze for a third year is another blow to the living standards and morale of NHS staff.

“It is NHS Employers that has already cut staff and downgraded healthcare professionals as it carries out the government’s diktat to find £20bn of so-called efficiency savings. In essence, NHS staff have seen their pay packets cut drastically in the last two years in real terms, while household bills have soared.

“NHS bosses are wildly out of touch with their own staff. Managers have already instituted massive cuts to staffing levels which are currently adversely impacting on patient care. NHS staff are at breaking point.

“NHS staff have already borne the brunt of the government’s policy of making the public sector staff pay for the gross mistakes of the financial elite – Unite will be strongly opposing this policy of blatant unfairness.

“The NHS Employers appear to be trying to launch a pre-emptive attack on the independent Pay Body Review (PBR) process.”

 

FTN Survey: Results

The FTN’s survey of 76 members covering acute, community, mental health and ambulance trusts found many expect revenues to decrease by one per cent in 2013-14.

Almost half, 46 per cent, did not think the new workforce planning arrangements with the creation of Health Education England Local Education and Training Boards, can be supported by the existing pay framework.

Almost seven in ten, 68 per cent, of respondents did not believe there were sufficient local flexibilities for providers in the current national pay framework.  Less than a third, 29 per cent, think the balance is appropriate.

Almost half of respondents, 45 per cent, expect minor recruitment and retention issues next year while 37 per cent expect no problems.

A significant minority of 16 per cent expect major problems in recruiting and retaining doctors and dentists.  Where issues existed, respondents did not feel these were directly related to pay but instead local and systemic workforce supply issues.

Readers' comments (38)

  • That's fine if you are not already at the top of the scale and have been for the past 4 years. Motivation is low, there are less staff doing the same if not more work.

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  • Incremental drift is NOT 2% a year.
    AFC has been in place 6 years, and the impact of incremental drift is close to zero. It's all about how the average increment changes year on year - in theory, as many people leave or get promoted (to bottom of new bands) as those who get the automatic increments.
    It is so misleading when the Press talk about automatic increments costing x% year on year, when its a totally false calculation.

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  • These annual pay freezes are causing unforgivable resentment and long term ill-will. The truthful answer should have been to cut all NHS pay by 5 to 10% in year one, and then restart paying realistic RPI based pay inflation.

    Due to 'lack of guts' and political pressure, this pain is being dragged out over many years for exactly the same effect.

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  • Does it mean the gps are frozen???? Also when people are looking at the staff what is going on with the VSM???

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  • I think the VSM pay freeze started a year before the general freeze.

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  • so now the reduction in services is going to be blamed on the staff unless they agree to another round of pay freezes. does the pay freeze apply to fees paid to consultants from kpmg, pwc et al? does the pay freeze apply to the senior managers of all the private companies cherry picking our services - what about the pay of all the directors on the nhs commissioning board but i suppose we will have to pay to get the best

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  • Your article appears to cover NHS Trusts but not Foundation Trusts and therefore your calculation of potential savings regarding not paying the 1% is greatly understated.
    From the comments above it appears that the NHS seeks to continue with its head in the sand regarding the state of the UK economy. We need to be reasonable. Everywhere else has had cuts and some of these sizeable.

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  • This is just unforgiveable. The majority of NHS staff are already at the top of their @AfC band - that means that for 2 years they have no salary increase, but the cost of living has just gone up and up. At the same time those fortunates on VSM scales are laughing all the way to the bank. We staff in the public sector are just sitting ducks ... and as for Millband and Balls saying they back this - words fail me! An increase may not be necessary for recruitment or retention - in these difficult times we are all fortunate to have jobs - but it is essential for staff morale. And remember, when recruiting new staff - you pay peanuts and you get monkeys.

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  • It is not for the Drs & Dentist Pay Review Body to do any body's bidding.
    It is an INDEPENDENT Pay Review Body, and should utterly reject pressure from NHS Employers to be otherwise. Members must maintain their independent status and integrity and do what is RIGHT, irrespective of any pressure put upon them.
    The same goes for the other NHS pay review Bodies too.

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  • Yet again hit those who work for a living will see their pay eroded again whilst everything else is going up. I like may others have been at the top of my pay band for years so this is just an excuse to not be fair with the work force who are currently going through unprecedented change. I hope the Unions fight this all the way.

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  • Anonymous 12.04pm
    The 2% incremental cost claim is not made by HSJ but by NHS Employers. The full quote from the last Pay Review Body report is below.

    "NHSE estimated that the incremental pay provisions in the AfC Agreement added around 2% to the pay bill of NHS organisations in 2011/12 with a similar increase in incremental provision intended for 2012/13."

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  • Care will suffer if there is no pay freeze. I beg to differ and am certain it will not benefit from experienced staff leaving and industrial unrest that would be inevitable.

    Many people will still be worse off even with a 1% increase as pension contribution hikes continue.

    My advise to Mr Royles would be stop blowing your own trumpet about about being the winner for most influential leader in HR and speak to the workforce and see what they think.

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  • Shaun - sorry, my message wasn't aimed directly as you/HSJ (I should be more careful). But there is a general falacy in much of the NHS that increments = cost pressure. It does not. It depends on staff turnover and other factors. For most organisations I would expect increment pressure to be approx zero when the proper level increment reductions is taken in to account.
    For the record, I've worked with DoFs who haven't understood this issue either......

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  • Surprised no one has mentioned employee pension increases.... so take home is falling year on year. Quite the opposite of the year on year inflationary increase given to those without work!

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  • You get what you pay for, we now have less staff doing less work in a less timely way so care is getting worse.

    Don't recognise the hard work we are doing and you'll get even less work. Less work means more ill people for longer which will push costs up!!

    Paying us properly when times are hard will, as usual in our wonderful vocational industry, soothe the pain a little and you'll get more out of us. More people will get better quicker and costs will go down!!

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  • Meanwhile, on London Underground.... "Tube drivers earn a fixed salary of around £44,545 per annum plus benefits.

    "This is comparable to other major train operators in the UK and reflects the pressured and skilled nature of the work and the unsociable hours that often have to be undertaken."

    Their union has agreed a 4 year deal that takes the basic pay to £52,000 in 2015. Clearly the NHS is not a priority for politicians. Or another view, by 2015, tube drivers basic pay = starting increment on Band 8B (inclusive of 20% Inner LW)

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  • We are already losing far too many experienced staff because of the reforms and morale generally is very low We need to get over the reforms make them work for the benefit of patients and to do that we need higly motivated staff /managers/clinicians that feel valued not only by the public/patients but by politicians Another pay freeze now will not achieve that and even more will leave or become even more demotivated

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  • For those of us at the top of a band with no further increments, another pay freeze will also affect our pension as we're on a final salary percentage.

    Meanwhile this government gives money away like water in foreign aid to countries hostile to us like Argentina and cheerfully announces a billion pounds for some new scheme to get youngsters back to work. Look after your workers FIRST Mr Cameron.

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  • The country is near to bust - look at Greece, Spain, ireland, and it will soon be France.

    Already most NHS workers get better pay and significantly better benefits than private sector counterparts.

    There is no point choosing a few exceptions and then applying it to the whole of the sector - but would agree that the freeze should apply to GPs, VSM and everyone else.

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  • Nobody has mentioned how many jobs are being downbanded, again a squeeze on the workforce already under pressure with higher pension contributions.

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