Chancellor Philip Hammond today committed the Treasury to funding a pay rise for nurses next year, if discussions between unions and government on boosting productivity in the sector “bear fruit”.
But he was roundly attacked by civil service trade unions for his silence on the wider public sector, where pay has been capped at 1% since 2012 and no new money has been located for an increase.
Union chiefs accused the government of “turning a blind eye” to growing recruitment and morale problems and failing to alleviate pressure on the civil service as it delivers Brexit.
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Delivering his Budget in parliament today, Hammond praised NHS nurses for their “invaluable support” and “tireless efforts”, and stated that the health secretary Jeremy Hunt was in discussions with health unions on modernising the pay structure to boost recruitment and retention.
“He will submit evidence to the independent pay review body in due course,” he said.
“But I want to assure NHS staff and patients, that if the health secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement.”
A Treasury announcement confirmed it would provide funding for pay awards as part of a deal for NHS Agenda for Change staff – which includes nurses, midwives and paramedics – on the condition that the boost will enable improved productivity, recruitment and retention in the NHS.
But despite expectations of a wider announcement, Hammond failed to make mention of pay across the rest of the public sector, where rises have been capped at 1% since 2012 following a two-year pay freeze.
Treasury documents explain that the relevant secretaries of state will shortly write to pay review bodies with data on recruitment and retention in their sectors and the characteristics of their workforces. The PRBs are expected to make recommendations in the spring or summer.
Mike Clancy, general secretary of Prospect trade union, condemned the chancellor’s failure to properly address public sector pay and warned of increasing problems with recruitment, retention and morale.
“Workers could not have been clearer in the run up to this budget that they need a pay rise,” he said. “The government has squandered an opportunity to listen and completely ignored the views and experience of the labour market.
“As private and public sector wages continue to stagnate the government has turned a blind eye to a growing problem."
He said that public sector pay had dropped by 15% in real terms over the past seven years.
“A vague commitment to listen to pay review bodies is nowhere near enough,” he continued. “55% of public sector workers are not covered by a pay review body and without the promise of new money any pay rise seems very far off.”
Some three million people, including most civil servants, are not covered by a pay review body. The Senior Civil Service is covered by the Senior Salaries Review Board.
Naomi Cooke, FDA assistant general secretary, welcomed the £3bn Hammond announced for Brexit preparation, but said the lack of investment in civil servants “beggars belief”.
“The civil service needs to be able to recruit and retain the best people to deliver the best possible Brexit so the complete absence of any statement on pay for the 98% of civil servants not covered by Review Bodies beggars belief,” she said.
“The NHS rightly gets an indication of funding for negotiated pay reform at a time of immense pressure, so why not the same for a civil service facing unprecedented challenges?”
Cooke pointed out that the civil service was delivering “the most challenging government agenda in generations” having lost a quarter of its staff since 2010.
Despite “widespread acceptance” of the need for pay reform, the chancellor had failed to meet this challenge, she added. “Departments must be given the funds and flexibility for a proper pay rise for civil servants, otherwise the cost of this short sightedness will affect the nation for generations.”
Mark Serwotka, the general secretary of PCS, the biggest civil service union, was equally scathing of the failure to address public sector pay.
“In his Budget, the chancellor failed to either make clear the cap is to be scrapped or put additional funding into departments to fund above inflation pay increases,” he said. “It shows the government doesn’t care about the crisis that its austerity programme has created.”
PCS members were recently balloted on their support for industrial action on public sector pay – its survey found that 80% of civil servants were prepared to strike for a pay rise.
But the chief executive of NHS Employers, Danny Mortimer, said he was looking forward to working with trade unions and the Department of Health on agreeing reforms to contract arrangements.
“There is a great deal to discuss but the chancellor’s commitment to fund the additional pay bill is welcome,” he added.
The Treasury also announced a review of the £1.7 trillion of assets and £3.7 trillion of liabilities on its balance sheet. This will look at areas such as estates optimisation, improving the return on investments, and reducing the cost of liabilities, to help government “make more effective use of these holdings”. The single biggest liability is £1.1 trillion of unfunded public sector pension liabilities, including for civil servants.
It pledged to build capability in public sector workforce planning, management and monitoring – following criticism that the civil service lacks certain skills.