The Department of Health and NHS Employers have recommended that there should be no review of the agreed NHS staff pay settlement for 2010-11.

In evidence submitted to the NHS pay review body last week, both organisations said it should endorse the final year of the indicative pay settlement - which would mean a pay rise of 2.5 per cent for NHS staff next year - despite the recession.

I think organisations will be careful about how they replace staff and which posts they need to replace

The DH’s submission said: “In the current circumstances, this is a difficult judgement… Given the current economic uncertainty, and the importance of maintaining stability for public service workforces, the government does not favour reviewing the agreed award for 2010-11.”

However, NHS Employers said a minority of its members - 10 per cent - had indicated they “would prefer not to implement year three due to likely financial constraints”.

It said it expected the payment by results tariff to be set at a level that would allow enough money for organisations to honour the deal. “We expect that tariff will be set on the assumption that year three of the arrangement is adhered to.”

NHS Employers director of pay, pensions and employment relations and deputy director Gill Bellord told HSJ: “The expectation is that the tariff will be set in on the understanding that that’s the expected outcome. So whatever efficiency savings are required they are required in the knowledge that pay uplift would be expected to be year three of the deal.”

NHS Employers’ submission said employers had warned them that “implementation of the increases set out will be very challenging and in some cases could have staffing or service delivery consequences”.

Ms Bellord said: “We know that around 30,000 people retire from the NHS each year out of 1.3 million. By and large they are replaced directly but I think organisations will be careful about how they replace staff and which posts they need to replace [and] how they configure services or reconfigure services.”

She encouraged NHS organisations to use the next 18 months to work out what they would do in each case.

“Each trust will do this in a different way and so they have got the opportunity to review how they provide services.”

Ms Bellord said it was important that employers “made sure” that when offering vacancies they were giving due consideration to new graduates. “Entry level jobs remain important,” she said.

Last week HSJ reported that senior NHS managers were calling for a pay freeze from 2011 together with a “fundamental review” of staff terms and conditions.