The Department of Health has backed a pay rise for NHS staff next year despite NHS Employers arguing it is unaffordable and could damage patient care.
The DH said the NHS Pay Review Body could award a maximum pay rise of 1 per cent to staff at a cost of approximately £430m.
In contrast, NHS Employers argued earlier this month in favour of a pay freeze.
In its submission to the PRB, the DH said: “The government has provided sufficient funding for the NHS to support an average annual headline pay increase of up to 1 per cent for NHS staff in 2013-14 and invites the PRB to make recommendations on how this might best be distributed.”
But the DH also pointed out the need for “continued pay restraint across the public sector” and claimed 60 per cent of staff on Agenda for Change would receive incremental pay rises averaging 3.5 per cent.
Despite warnings from unions that morale is worse than a year ago and a third of NHS staff have “very seriously” considered leaving their jobs the DH said: “Recruitment, retention, morale and motivation remain strong.”
Under its plan, some staff groups could receive pay rises of more than 1 per cent but this would be at the expense of others so the overall average does not exceed 1 per cent.
Should the PRB reject a pay rise, the DH said the funds would be “retained in the NHS and may be better employed on other issues such as increasing staff numbers or improving patient services”.
As part of its analysis the DH also warned “reductions in clinical posts cannot be ruled out”.
NHS Employers director Dean Royles, director of NHS Employers, said: “The harsh reality is that the NHS simply cannot afford to increase pay scales as well. If pay levels do increase next year it will inevitably put further pressure on patient care and could affect job security.”