• NHS Improvement warned trusts could not afford pay increases above the 1 per cent cap unless they were separately funded
  • System’s financial plans for 2018-19 were set on basis that extra money would be provided for any additional pay rises

 NHS Improvement warned the government that trusts could not afford the pay rises that were recently awarded to doctors in the current financial year.

In its evidence to the independent pay review body, published in March, the regulator said trusts “cannot afford any extra pay increases unless they are fully funded by the government”, adding that this would “simply increase the deficits in the NHS provider sector”.

Meanwhile, planning guidance issued jointly by NHSI and NHS England for 2018-19 assumed that any pay rises above the 1 per cent pay cap would be covered by additional funding from the Treasury.

Last month, health and social care secretary Matt Hancock announced that from midway through 2018-19, consultants would see a 1.5 per cent pay increase, junior doctors would see a 2 per cent rise and specialty and association specialist doctors a 3 per cent increase.

The Department of Health and Social Care confirmed the cost of this would be “absorbed” within the existing settlement.

The impact of doctors’ pay rise from October 2018 to April 2019 is estimated to be around £65m.

NHSI’s warning was made in December 2017, when negotiations around the NHS’s budget for 2018-19 were still ongoing. 

The negotiations resulted in the DHSC releasing an additional £540m to the NHS from within its post-budget settlement. But in a board paper published in February, NHSE said the system’s financial plans for 2018-19, set jointly with NHSI, had been formulated on the basis that any pay rises above the 1 per cent cap would be funded separately.

NHS Improvement did not have anything to add when approached by HSJ. The DHSC declined to comment.

The deputy chief executive of NHS Providers, Saffron Cordery, told HSJ last month that NHS Providers is “very concerned” that the cost of the uplift in pay will fall on trusts to fund.

The government did agree to provide £800m of new funding towards the larger Agenda for Change pay deal, which was announced in March, although providers have complained that this falls short of the full cost impact.

The impact of the pay increases from 2019-20 onwards will need to be covered by the long term funding settlement that was announced by the prime minister in June.