These are tough times for public sector workers, most of whom are facing a pay freeze. NHS staff are the exception, having been offered a 3 per cent rise. The government’s very late announcement of the increase, on Wednesday night from Sajid Javid’s back garden, followed much media speculation that it was trying to find a way to water down the offer, having initially proposed a rise of just 1 per cent. In the end, ministers concluded that they had no option but to accept the recommendation of the independent pay review bodies in full and grant the larger uplift.
Yet despite health workers being virtually the only pay winners across the wider public sector, can they be blamed for feeling like they have lost?
Looked at in isolation, many might wonder why NHS staff aren’t pleased, given the economy and public finances have taken a huge hit during the pandemic. A 3 per cent rise is just above the Consumer Price Index (CPI) measure of inflation (2.5 per cent in the year to June) and just below the Retail Price Index (RPI) measure (3.7 per cent). Many businesses have closed as a result of Covid. People have lost their jobs, 2.4m are still on furlough and many of those who stayed in work have had their hours, and pay, cut.
Against that backdrop, while recognising the impact the pandemic has had on the NHS, any pay rise might seem generous. That’s certainly the way the Treasury looks at things.
The reason why there is so much NHS discontent is that the pay award isn’t happening in isolation. As with so much of the pandemic, the impact on workers across the economy has not been equal. Alongside the many who have lost jobs or earnings, some have done well.
The Office for National Statistics has tried to disentangle what’s going on with earnings and estimate the underlying growth. Its latest calculation is that underlying average earnings for all employees increased by between 3.2 per cent and 4.4 per cent in the year to May 2021. Going forward, the Office for Budget Responsibility expects average earnings over the next year to rise by around 2.5 per cent. A 3 per cent uplift for NHS staff isn’t the worst but it’s not the best. In that context, this looks like a “treading water” pay rise—just about keeping up with inflation, just about keeping up with what’s happening for other workers.
But one year doesn’t tell the whole story. NHS staff discontent comes from what’s happened to pay over a much longer period. Over the decade from March 2011, NHS pay has risen on average by just 1.6 per cent a year. This is below inflation and below earnings growth across the wider economy. Some of the figures are stark. The average pay for a nurse after CPI inflation in March 2021 was £1,583 less in real terms per year than a decade before, and for a consultant, average annual pay fell by £5,537 in real terms over the same decade.
Obviously this matters to the staff affected, but its importance goes beyond the impact on health workers’ finances. Pay is a major factor in influencing retention and recruitment of staff and that is important for everyone who needs care. NHS staffing shortages were a problem before the pandemic, with over 100,000 vacancies across the health service. They have been a big issue during the pandemic, constraining flexible responses to surges in patient numbers and exacerbating the current difficulty with staff absences related to self-isolation. And they are likely to remain a major challenge going forward, with a huge and growing backlog of care and most experts now saying Covid is an endemic disease, with likely seasonal outbreaks for years to come.
If the NHS is to recover and be more resilient to future health shocks, the government’s approach to staffing the health service requires a fundamental overhaul. There’s an urgent need for a comprehensive workforce strategy setting out the long-term approach to training, recruitment, retention and pay. Central to this strategy should be a pay system that rewards staff and encourages long-term commitment to their work. That strategy needs to cover both the NHS and social care; the row over NHS pay does nothing to address endemic low pay in social care.
Problems with ensuring a sufficient health care workforce are sadly not new; they have plagued the NHS since its inception. The government has published a new Health and Care Bill with major changes to the organisation of the NHS, but it says very little about the key issue of staffing. The Bill is a once-in-a-generation opportunity to learn from past failures. As it passes through parliament, the main health think tanks, royal colleges and service leaders are all urging the government to amend the legislation to ensure that in future England has robust, independent projections of the health and social care staff the country will need. That is the first step to making shortages a thing of the past.
The lack of these provisions in the Bill and the lack of a comprehensive workforce strategy are glaring omissions. If the health and care system is to recover after Covid-19, it needs to be fully and properly staffed by a motivated workforce.
