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Government to cover end of pay cap, but only with increased productivity

Chancellor Philip Hammond has committed the government to covering the end of the 1% pay cap across nurses, midwives and paramedics.

Extra funding will be awarded on the condition that any deal increases productivity within the NHS and is “justified on recruitment and retention grounds.”

The plans, announced in today’s Autumn Budget, also included an increase of £3.5bn in overall funding to bring total funding to £10bn until the end of parliament.

Danny Mortimer, chief executive of NHS Employers, commented: “We look forward to continuing to work with trade union colleagues and the Department of Health to agree how contract arrangements can be reformed and how our employees benefit a welcome lifting of the pay cap.

“There is a great deal to discuss but the chancellor’s commitment to fund the additional pay bill is welcome.

“Meanwhile, NHS organisations are working hard to address staff concerns and better retain vital skills. But they also need national support.”

However, the executive said there was a need for more investment in training, more flexibility in apprenticeships and a reformed migration policy in order to ensure the NHS has an appropriate level of staff.

Janet Davies, chief executive of the Royal College of Nursing (RCN), said: “The chancellor has clearly listened to the tens of thousands of nursing staff who’ve been campaigning for fair pay, and he was right to address their concerns. Promising the NHS additional money for nursing pay is welcome but Philip Hammond must make it a meaningful pay rise.

“The NHS has been running on the goodwill of its staff for too long, and with more talk of reform and productivity, Hammond runs the risk of insulting nurses who regularly stay at work unpaid after 12-hour shifts. Their goodwill will not last indefinitely.

“Nursing pay has fallen further and further below the cost of living for the last seven years, with a gap now worth £3,000 a year. In the months to come, the government must allow the NHS Pay Review Body to be genuinely independent of government for the first time in years and give it the freedom to recommend a meaningful pay rise.”

Fear over the funding available after the pay cap was lifted has spread throughout the health services since the announcement was made by health secretary Jeremy Hunt last month.

Hunt did hint that he understood trusts could not pay the price alone but it will come as a relief to providers that there is some commitment from the government on the issue.

Responding to the Budget, the chief executive of NHS Providers, Chris Hopson, said the extra money for pay was welcome.

“NHS providers needed three things from the Budget: extra revenue for day to say spending in 2018/19; more capital funding for transformation and tackling the maintenance backlog; and fully funding the ending of the 1% pay cap,” he commented.

“The NHS has been given £1.6bn extra revenue for 2018/19 that has been brought forward; £3bn extra capital funded by the treasury; and the government has committed to fully fund the main NHS pay rise. In addition, the government has committed extra capital and extra revenue for this year, though this has come very late to be used with maximum impact for this winter.

“Any extra investment in the NHS is welcome given the overall economic context and the other demands on public expenditure. It is a clear signal that the government has listened to the NHS’ definitive statement that the existing spending review plans for 2018/19 were undeliverable.”

Richard Murray, director of policy for The King’s Fund, added: “It is encouraging that the government is prepared to fund pay rises for nurses and other key staff on top of this extra funding, as long as agreement can be reached on new contracts.

“We are disappointed, though, that the chancellor did not find any extra funding for social care, which faces a £2.5bn funding gap by 2019/20. While the forthcoming Green Paper offers the prospect of reform, any meaningful change is a long way off and will be of little comfort to the many people who need help now but cannot access it.”