Matt Hancock doubles down on NHS wages and insists 1% offer is a pay rise

Inflation forecasts for 2021-22 show the health secretary’s claim over NHS pay would result in a real-terms pay cut for NHS staff

Matt Hancock has told MPs on the Health and Social Care Committee that a proposed 1 per cent pay rise for NHS staff would be a real pay rise because it was higher than inflation.

But the health secretary’s sums appear to be wrong as the Office for Budget Responsibility’s forecasts for inflation in 2021-22, the year the pay rise will come into effect for more than a million NHS staff, say inflation could be 1.5 per cent to 1.8 per cent.

His comments will probably inflame the row over the government’s handling of NHS pay with health unions already preparing the ground for possible industrial action.

Jeremy Hunt, chair of the committee, asked Mr Hancock how the Department of Health and Social Care had calculated the 1 per cent pay offer and whether he considered it a real-terms pay rise in terms of inflation.

The Tory minister said: “Well, inflation is below 1 per cent, and therefore a proposed 1 per cent pay rise is indeed a pay rise, and that’s simply a matter of fact.”

He said: “I’m a huge fan of and supporter of the workforce right across the NHS, who’ve done an incredible job during the pandemic. The NHS was carved out of the pay freeze that’s been applied, due to the enormous pressure on the public finances, to everybody else in the public sector.”

Mr Hancock said the government had submitted evidence – to the independent NHS pay review bodies – on what it considered was “affordable”, but he said ministers would review the bodies’ recommendations in the coming months.

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The 1 per cent rise is lower than the original 2.1 per cent originally forecast by the NHS and government under the NHS long term plan. Labour has accused the government of breaking its promise to staff.

Jonathan Ashworth, the shadow health secretary, said: “Matt Hancock knows full well that with the OBR expectations for inflation, he is imposing a pay cut on NHS staff in a pandemic.

“Ministers should take this pay cut off the table and start talks with staff on a multi-year pay deal that reflects their worth and address recruitment and retention in the NHS.”

The Royal College of Nursing has warned the low increase will fuel an exodus of nurses. The union has established a £35m industrial action fund to support staff if a decision is made to strike. The organisation had been asking for a 12.5 per cent pay rise.

A spokesperson for the union said: “The government is digging in despite public anger and clear support for NHS staff. In the middle of a pandemic, ministers cannot justify giving just £3.50 extra per week to nursing staff.”

Dr Gavan Conlon, from the London Economics consultancy, responded to Mr Hancock’s comments, saying: “When assessing whether the proposed cash pay increase represents a real-terms increase or cut, it is not sensible to compare a proposed cash increase in 2021 with a measure of inflation in 2020.

“Making the relevant comparison, and based on forecasts from the independent Office for Budget Responsibility, the proposed 1 per cent pay increase in cash terms being offered by the government to the 1 million employees covered by the ‘Agenda for Change’ framework in 2021 represents a real-terms reduction of 0.5 per cent.”

Earlier this week, the annual NHS staff survey of almost 600,000 NHS staff found four in 10 workers had suffered from a stress-related illness in 2020.

Among nurses, pay satisfaction dropped almost 4 percentage points to just over 32 per cent.

The Department of Health and Social Care was asked to clarify the health secretary’s comments.