I am responding on behalf of my right hon. Friend the Prime Minister to the 31st report of the NHS Pay Review Body (NHSPRB). The report has been laid before Parliament today (Cm 9641). I am grateful to the chair and members of the NHSPRB for their report.
The Government welcome the 31st report of the NHS Pay Review Body, which endorses the “Agenda For Change” multi-year pay and contract reform deal (2018-19 to 2020-21).
NHS staff do a fantastic job in delivering world-class care. Even with increasing pressures on the NHS due to, among other things, an ageing population and changing public expectations, they work incredibly hard, always putting patients first and keeping them safe while providing the high-quality care we all expect.
We have already announced that, to secure the future of the health service as it approaches its 70th birthday, we have increased NHS funding by an average 3.4% per year, which will see the NHS receive £20.5 billion a year in real terms by 2023.
The Government accept the NHSRPB’s observations and are very pleased to confirm their acceptance of the “Agenda For Change” multi-year pay and contract reform deal.
The new deal will see nearly 1 million NHS workers benefit over three years and help deliver better value for money from the £36 billion “Agenda For Change” pay bill, with some of the most important changes to working practices in a decade.
The deal includes a range of pay and non-pay proposals that will benefit staff and patients. Most NHS staff below the top of their pay band will benefit from pay increases through the restructuring of the pay bands—higher starting pay, removal of overlapping pay points and shorter pay scales.
From this year the lowest NHS starting salary will increase year on year from £15,404 to £18,005 in 2020-21.
The starting salary of a nurse will rise to £24,907 in 2020-21 which will have a significant impact on retention and recruitment issues.
The deal also guarantees fair basic pay awards for the next three years to staff who are at the top of pay bands—a cumulative 6.5% over three years.
The agreement will put learning and development right at the heart of local annual appraisals, helping to improve the experience for staff, ensuring they demonstrate the required standards for their role before moving to the next pay point. We know that getting appraisals right helps improve staff engagement and through that better outcomes for patients. The deal also commits NHS employers to support staff to improve their physical and mental health, helping to reduce sickness absence, increasing capacity for patient care.
This is a major step forward. The agreement reflects the Government’s public sector pay policy that pay flexibility should be in return for reforms that improve recruitment and retention and boost productivity.
During the NHS trades unions consultation on the AfC framework agreement, the Department of Health and Social Care received a number of representations from non-statutory non-NHS organisations that provide NHS services seeking additional funding on the same basis as NHS bodies.
It is important to stress that the AfC reforms were those, based on the AfC employment contract (and all the terms and conditions) the NHS Staff Council agreed could help the NHS recruit, retain, motivate and boost the productivity/capacity of its workforce.
We know that there a small number of non-statutory non-NHS organisations that provide NHS services, employ existing and new staff on the AfC contract and will be required to implement the reforms.
I believe it is right that these organisations should receive a share of the additional funding made available for AfC staff employed by NHS bodies listed at annex 1 of the NHS terms and conditions of service handbook; each employ existing and new staff on the AfC contract, are required to implement the deal and will need to meet the costs of doing so.
From 2018-19, the AfC pay deal will apply to existing and new staff on the AfC employment contract employed in both NHS bodies and non-statutory non-NHS organisations that provide NHS services, the terms and conditions of which are set out in the NHS terms and conditions of service handbook.
I have asked my officials to write directly to all NHS commissioners and provide them with further detail of the eligibility criteria for additional funding during the three years of the pay deal, that will apply to those non-statutory non-NHS providers of NHS services.
In line with the Chancellor’s commitment at Budget 2017, the Government will release the £800 million already set aside to support the pay deal for 2018-19 in England. Barnett consequential will flow to the devolved Administrations in the usual way. Following the recent announcement on the NHS long-term funding settlement, for the remaining two years of the deal (2019-20 to 2020-21) funding will be met from the settlement. The long-term settlement will provide the NHS with increased funding of £20.5 billion per year in real terms by the end of five years.