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8 July 2015
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Chancellor George Osborne announced his summer Budget in the House of Commons yesterday, however the Nuffield Trust warned it will mean NHS posts will be even harder to fill.
Osborne announced that public sector pay will be frozen at a 1% increase, in a bid to save money.
However the Nuffield Trust said this is a “false economy” as it will create low morale between NHS staff and make it even harder to fill posts.
Nigel Edwards, Nuffield Trust chief executive, said: “In the last parliament, the bulk of efficiency savings were achieved by holding down staff pay. [Yesterday’s] announcement that public sector pay is to rise at just 1% a year throughout the parliament equates to a further real-terms cut in staff pay, suggesting that the government hopes curbs on pay will deliver a significant chunk of the £22bn savings needed from the NHS.
“But holding down pay indefinitely is likely to be a false economy, especially as private sector wage growth picks up. For most doctors and nurses whose wages will be cut in real terms, low morale and the pull of the global marketplace will make it ever harder to fill posts,” he said.
He also said that the cost of agency staff is “spiraling” due largely to growing problems with recruiting and retaining permanent staff, so freezing public sector pay might make seven-day working and reducing the reliance on temporary staff unlikely.
The Health Foundation raised similar problems, as Anita Charlesworth, their chief economist, said: “NHS staff’s pay will grow at much slower rate than private sector earnings. While this may help bridge some of the efficiency gap it raises real questions on whether it will put more pressure on the NHS’ soaring agency budgets if it leads to recruitment and retention problems.”
Photo courtesy of M. Holland