• NHS England board member warns government plans to fund new NHS pay deal could be “catastrophic” for social enterprises
  • Lord Victor Adebowale said funding only NHS organisations appears “anti-competitive” and could amount to “state aid”
  • He warned social enterprises providing NHS services are unlikely to be financially viable in the long term if not funded for pay increases

An NHS England board member has warned the new government pay deal could be “catastrophic” for social enterprises and appeared to be “anti-competitive”.

Lord Victor Adebowale, non-executive board member for NHS England and chair of Social Enterprise UK, has said government plans to restrict funding for the new Agenda for Change pay deal to NHS trusts “is likely to have a catastrophic effect on social enterprises providing NHS services”.

He questioned whether the extra money from government to NHS organisations amounted to “state aid” and would be against competition laws.

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Lord Victor Adebowale has warned the NHS pay deal could make social enterprises unviable

In a statement, Lord Adebowale said the Department of Health and Social care had confirmed to Social Enterprise UK that it plans to only fund NHS trusts and foundation trusts to implement the proposed pay uplift, which will amount to an average 6 per cent increase for staff over three years. 

He added: “Most perversely of all should we see the failure of organisations then the staff will be absorbed into NHS organisations who will then pay them the uplifted salaries – so the pay rises will be funded by Treasury.”

The news comes following reports in HSJ that thousands of primary care staff will be left behind by the NHS pay deal, after the DHSC confirmed the deal did not apply to them.

Lord Adebowale said if social enterprises, most of which provide community services, are not funded for the pay rise they are unlikely to be “financially viable in the long term” as they will not be able to absorb the increased staffing costs.

He argued that all staff providing NHS services should be treated in the same way, regardless of their employer, “so that a gap in pay does not result in workers being drawn away from primary, community and social care services, negatively impacting on patient care.” 

The Department of Health and Social Care told HSJ it was considering the position of social enterprises within the wider Agenda for Change deal but no decisions have yet been made. 

This story was updated at 15:26 after HSJ recieved a response from the DHSC.