Pay deals must be funded in full, says NHS Providers

Providers have been allocated £756m this financial year to cover the additional costs of the Agenda for Change pay deal. The Department of Health and Social Care said commissioners (including NHS England, clinical commissioning groups and commissioning support units) would get a further £20m; other arm’s length bodies £12m; and non-NHS organisations £12m.

The funding is being allocated directly – in providers’ case this will be calculated using 2018/19 financial plans and electronic staff record (ESR) data on the proportion of staff at different pay spine points.

The Department said the final overall payment matched the national impact of the bottom-up calculation of the cost of the pay award (2.03% over and above the 1% already funded).

Although it believes the method of allocation is equitable, the Department acknowledged there could be circumstances where local costs are not fully met. On the other hand, some providers could be overpaid – NHS Improvement will identify this in month four financial returns.

The pay rise is backdated to April and 1/12 of the annual total was made available to providers in July, with 1/3 paid in August to cover back pay. Trusts will receive 1/12 each month for the rest of the financial year.

For commissioners, £20m will be added to the NHS England mandate funding and the national body will either adjust running costs or make the payment directly to individual organisations.

Most doctors and dentists in England will receive a 2% pay rise – though consultants will get 1.5% plus potentially a further 0.5% in non-consolidated performance pay and specialty doctors 3%. However, unlike the Agenda for Change deal, these rises must be funded from existing budgets.

NHS Providers deputy chief executive Saffron Cordery said NHS staff, including doctors, deserved better pay. ‘But trusts are already financially overstretched and we have always been clear this increase must be fully funded,’ she said.

‘If – as seems almost inevitable – the additional costs of this increase are passed on to trusts, it would increase their pay bill substantially. Trusts will have to find other ways of finding the money, with a real risk that that could impact on the quality of care.’

In Scotland, a new pay deal will benefit 147,000 NHS staff on Agenda for Change contracts. Health union members accepted the deal in August, giving those earning up to £80,000 a 9% uplift over three years. Those earning more than £80,000 will be given a flat increase of £1,600 a year. Staff who are not at the top of their pay bands will also receive the incremental pay rise they are due. The pay rise will be backdated to April 2018.

The Welsh government offered local staff a similar deal to that agreed in England.