Unfunded NHS staff pay increase could leave big hole in severely stretched NHS budget

Responding to the Pay Review Body (PRB) announcement on pay for NHS staff, Anita Charlesworth, Director of Research and the REAL Centre at the Health Foundation, said: 

‘Today's offer to staff increases the NHS pay bill by almost 5% in 2022/23* - with pay rises weighted more heavily towards the lower paid. This is more generous than the 3% proposed and accounted for in the autumn. However, no new money has been announced to pay for the further increase, which will need to be paid from the existing health budget. The government can’t keep piling unfunded commitments into the NHS and leave it to those on the frontline to pick up the pieces – the NHS deserves better.  

‘NHS trusts are presented with a near impossible task for which they are set up to fail. Government has already demanded that they make big efficiency savings. Meanwhile, services are facing unprecedented pressures, with waiting times at record levels, ongoing covid pressures, chronic staff shortages and a social care system on its knees.  

‘Something has got to give. The very difficult trade-offs that the NHS is already facing will only be exacerbated by the lack of any government funding to cover the cost of this pay award. A further squeeze on the NHS budget is likely to impact patient care and staff working conditions, in turn affecting morale and retention.  

‘Today’s pay offer means NHS staff – much like the rest of the public sector – are facing another real-terms basic pay cut. For nurses in NHS trusts, this amounts to a real terms basic pay cut of between £1,400 and £2,500 on average per full-time equivalent. In an environment where public sector pay growth is lagging well behind the private sector, today’s pay decision is unlikely to be enough to help retain valuable experienced staff or recruit new talent that the NHS desperately needs in the aftermath of the pandemic 

‘The higher increases in basic pay for lower paid NHS staff are understandable considering the rising cost of living. However, this raises questions around how the NHS is going to motivate and retain more experienced staff – for example, very experienced nurses who will receive the lowest increase of all clinical staff. There can be no further delay in delivering a fully funded strategy to address the staffing crisis. 

‘Government has made a series of bold promises to NHS staff and patients. If they want to keep those promises, they must be backed up with adequate funding.’

Notes to editors

1. *The Department of Health and Social Care’s evidence submission to the NHS Pay Review Body for the 2022/23 pay round stated that every additional 1% of pay for the NHS Hospital and Community Health Service (HCHS) costs around £900m for the entire workforce. However, the government is yet to provide the full breakdown of pay rewards across all staff groups.
2. The latest Consumer Prices Index (CPI) inflation forecasts from the OBR suggest that CPI inflation will amount to around 8% in 2022/23. The government’s announcement states that following the current pay award, the average basic pay for nurses in NHS trusts will increase from around £35,600 as of March 2022 to around £37,000. Based on this, the proposed pay award amounts to a real terms pay reduction of around £1,400 on average for nurses and health visitors in NHS trusts and CCGs between March 2022 and March 2023. This increases to around £2,500 if CPIH inflation rises even higher to 11% in 2022/23, the Bank of England’s latest forecast, although individual earnings changes will differ across pay bands and regions.
3. Today’s pay award is likely to amount to a real terms pay cut for most NHS staff, including nurses and health visitors, in 2022/23.
4. The latest ONS earnings statistics show that between March 2022 and May 2022, average weekly earnings in the UK’s private sector increased by 7.2%, while average weekly earnings in the public sector increased by 1.5%. The ONS said that this is among the largest public-private sector average weekly earnings differentials on record, driven by stronger regular pay increases and larger bonus rewards in the private sector. The last time public sector average weekly earnings increased by less than 1.5% was in April-June 2017 (when the increase was 1.3%).

Media contact

Simon Perry
Simon.Perry@health.org.uk
020 7257 2093