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NHS pay rise may have to come from existing budget, says minister

A breakthrough pay rise offer for nurses and ambulance workers may have to be funded within the existing NHS budget, a senior cabinet minister has admitted.

Footing the bill – estimated to be about £1.5bn – “won’t be easy”, according to Oliver Dowden, the chancellor of the duchy of Lancaster.

He said it had proven “challenging” to find the money, days after unions and ministers clinched a deal designed to stop a wave of historic strike action across the health service in England.

Members of six unions, including the Royal College of Nursing, will be balloted on the offer of a one-off 2% salary uplift and 4% Covid recovery bonus for the current year, and then a permanent 5% pay rise from April.

The lowest-paid NHS staff on “agenda for change” contracts would receive the biggest boost, with minimum pay in the health service lifted to £11.45 an hour. But uncertainty remains over how the move will be paid for.

The previous pay settlement was estimated to be about 3.5%.

Ben Zaranko, an economist from the Institute for Fiscal Studies, said: “Just over three weeks ago, the Department of Health and Social Care was claiming that pay awards of more than 3.5% were unaffordable. A 5% pay offer rather than 3.5% would add around £1.5bn to the NHS pay bill.”

Dowden, who played a key role in coordinating the government’s response to strikes, told Sky News: “Finding this money is not easy. But we think that in this context of ensuring that we reward nurses properly and we prevent disruption, that we can find the money to do this but it won’t be easy.”

He suggested the money could come from the £160bn NHS budget or from within “wider government spending”.

“Given the pressure that health services around the world are under we’re not going to take services away from the frontline,” Dowden told the Sophy Ridge on Sunday show.

“I don’t deny for a minute your point, which is that it is challenging to find this money. This is why the government held out for so long in respect of these negotiations, because there wasn’t some huge amount of money that we could turn to.

“But I am confident that we can find it, either within the NHS budget or wider government spending.”

Talks with teachers about their pay dispute and strikes are ongoing while initial contact has been made with junior doctors but no formal negotiations have yet commenced, Dowden added.

A wave of further industrial action still looms on other fronts.

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Mark Serwotka, general secretary of the Public and Commercial Services (PCS) union, said his members had “no choice” but to stage lengthy strikes because many were living in “work poverty”.

He said 40,000 civil servants felt forced to use food banks, 45,000 claimed in-work benefits, and 49,000 workers across the Department for Work and Pensions (DWP) and HMRC were being paid the national minimum wage.

“It is obscene,” Serwotka told Sky. “We’ve tried for months to get the government to engage. It’s great news that they’re talking to the health unions and education unions, but why won’t they talk to their own workforce?

“Rishi Sunak applauded his workforce during the pandemic, he lauded us for delivering the furlough scheme, for delivering three million claims to universal credit.

“Many people died in the civil service who went into work to keep our borders safe and provide frontline services, yet a 2% pay rise is lower than anywhere in the economy and they will not even negotiate with us.

“I think most of your viewers would find that utterly astonishing and that’s why people are having to take escalating strike action, because they’ve got no choice if they want to get themselves out of work poverty.”

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