NHS pay must match private sector to stop hospital staff leaving, says health chief

Simon Stevens said it is a 'fact of life' that salaries must stay competitive

The chief executive of the NHS in England has warned that health service pay will have to keep up with private sector salaries if hospitals are to retain the staff they need.

Facing questions from MPs over the Government’s cap of public sector pay increases at one per cent per year for four years, a move which has provoked anger among health unions, Simon Stevens said it was “an economic fact of life” that pay would have to remain competitive.

With the NHS under pressure to recruit and retain full-time staff, Mr Stevens, chief executive of NHS England, told the House of Commons Health Select Committee that he accepted there had to be a “trade-off between the cost of employing each person versus the number of people you can employ”.

“In the fullness of time, and obviously I’m not going to get into a political debate, ultimately the health service needs to pay the going rate relative to the private sector in order to recruit and retain the staff that we need,” he said.

Nursing unions warned of a possible staff retention crisis in the NHS after George Osborne confirmed four more years of pay restraint for the public sector. The NHS is also under pressure to reduce its spend on temporary agency staff, which hit a record £3.3bn in the last financial year.

Mr Stevens, who last week called on supermarkets concerned about implementing the Government’s new “living wage” requirements to raise the price of junk food to meet the extra cost, said that the country needed to take a “more assertive approach” on public health.

Asked how £200m cuts to councils’ public health budgets, recently announced by the Chancellor, would impact on plans to reduce demand on the NHS with a public health prevention strategy, he added: “I don’t think we want more of that kind of approach going forward.”

According to estimates last autumn, the NHS needs to save £22bn by 2020, alongside an £8bn annual funding increase from Government, to remain sustainable. Mr Stevens told MPs about a quarter of this saving could come from prevention and improving out-of-hospital services.