The announcement of pay rises of up to 29% for NHS staff has been broadly welcomed but the way funding is being allocated risks not only inequality among providers, but new barriers between health and social care

Workforce pressures – notably the difficulties in recruiting and retaining high quality health and care professionals – are widely acknowledged as one of the greatest challenges currently facing both NHS and independent health sector providers. And given the significant focus on the public sector pay freeze during last year’s General Election, with Labour’s Shadow Health Secretary Jon Ashworth making a pay-rise for nurses his flagship policy, there was little surprise when the government announced last September that it would be ending the pay freeze to give ‘greater flexibility’ to address the ‘pinch points’ within public sector staffing.

Months of negotiating with employers and unions, during what was arguably one of the toughest winters on record for the NHS, eventually led to the Prime Minister herself no less, proposing a three-year pay deal, with NHS staff set to get between a 6.5% and 29% pay rise. This would include the lowest paid staff such as cleaners, porters and catering staff receiving a rise of 15% to more than £18,000 while a nurse with one year’s experience would see their basic pay rise by 21% over three years.

While support for the pay rise was by no means universal (GMB are not backing the deal which they believe is promising ‘jam tomorrow’) and even NHS Employers and Unison made great pains to say this would not ‘solve every problem’ and that ‘many compromises’ were made, overall the deal was warmly welcomed and seen as a much-needed good news story for the government and a practical step towards making the NHS a more attractive employer.

So, job done for NHS pay? Not quite. Reading through the fine print of the pay deal, it soon emerges that the deal is not quite as comprehensive as on first glance.

Whilst precise detail is limited it appears that the funding for the pay rises (which the Treasury has provided so is ‘new money’) will be allocated directly to NHS Trusts and Foundation Trusts in 2018/19 rather than, as is usual, through the national tariff or commissioner allocations. What this means is that staff on Agenda for Change terms and conditions that work for a non-statutory provider of NHS services, for example charities, social enterprises as well as the independent sector, may not have access to the pay rise. These providers could, therefore, have a difficult decision to make over whether to match this pay rise through their existing budgets, which given wider funding pressures would be a real stretch, or not fund them at all and risk staff leaving to work elsewhere.

Given that the NHS has always been made up of a diverse group of employers – NHS trusts, GPs, pharmacies, charities, social enterprises and the independent sector – questions are being raised about the credibility of an ‘NHS’ pay deal which could exclude multiple groups of staff delivering care to NHS patients. Moreover, the last few years have, for example, already seen a significant shift of nurses from the community to the acute sector post the Francis Review and this lack of parity in the pay rise could put yet more pressure on already fragile community services and is inconsistent with the government’s wider policy goal of delivering more care to patients outside of hospitals.

Equally, with the move towards greater coordination and integration of services across the whole of the healthcare system, there is a real risk that a disjointed pay deal would lead to artificial barriers being created between different health sectors and services, impeding exactly the kind of joined up, collaborative care system that the NHS is pursuing. There is also a real question over a fair playing field and the role of the NHS tariff if further funding is distributed only to a single set of providers.

What looks like a simple good news story on increasing pay for hard-working NHS staff has therefore become something much more complicated and further discussion will be needed to ensure that the pay rise is comprehensive as well as distributed in a way that is credible.

Given that the unions, including the Royal College of Nursing, still have to get the backing from their members on the deal, and the government is yet to clarify exactly how it can legally direct this pay rise to NHS trusts, it will be a tense few weeks for thousands of staff delivering NHS service.’