Published: 26/08/2022
Billy Palmer
Lucina Rolewicz
Public sector pay settlements can often be difficult to digest, and this year’s NHS pay deal is no different. Yet the context of this year’s settlement – with a general cost-of-living crisis and rising wage competition from the private sector – means it is perhaps more important than it has ever been.
With strike ballots pending, it is too early to tell what the immediate, let alone medium-term, effect will be. That said, our analysis suggests there are some striking implications. For instance, it will if anything accentuate our already large pay differences between some professions. Also, while pay progression to reflect years in service means that average salaries of existing staff will increase above the headline settlement, it will still typically be a real-terms cut. We discuss these and other insights below.
First, a recap on what has been agreed. The government accepted the recommendations of the independent NHS pay review bodies in full. Starting with doctors, this meant that for 2022/23, hospital consultants get a 4.5% uplift to their pay framework (up to £5,130 in basic pay annually), as do salaried GPs. Some were absent from the pay review bodies recommendations, with the majority of doctors-in-training covered in an existing deal worth 2% – as little as an additional £576 a year – which they will argue was agreed in a very different economic landscape.
For the majority of the 1.2 million hospital and community staff employed on the NHS terms and conditions of service (Agenda for Change), there was a flat-rate annual increase of £1,400. The exceptions to this being the lowest pay band, which retains an additional £324 living wage uplift, and a handful of pay levels where the increases were between £161 and £434 above the flat-rate (equivalent to 4%).
Deal or no deal: understanding the effect of the NHS pay settlement … – The Nuffield Trust
Chart
Some key demographics
Average annual earnings 2021/22
Effect of 2022/23 pay settlement on basic pay4
Number of staff
Male (%)
Black and black British (%)
Estimated full-time pay3
min-max %
min-max £
Support to clinical staff
434,500
18%
7%
£25,300
5.6% – 9.3%
£1,400 – £1,724
Nurses and health visitors
358,000
12%
11%
£40,500
1.3% – 5.5%
(4.3%, on average, for nurses)
£1,400 – £1,834
Managers2
37,000
39%
4%
£60,100
Junior doctors
73,600
44%
8%6
£58,100
2.0%
£576-£2,3215
Consultants
56,900
61%
3%
£132,000
4.5%
£3,80
Salaried GPs
15,300
28%
5%
(all GPs)
£99,300 (2019/20)
4.5%
£2,802-£4,228
Note:
1. The number of staff is based on headcount as at March 2022, rounded to the nearest 100.
2. Excludes very senior managers, who are due to receive a 3% increase plus “a further 0.5% to ameliorate the erosion of differentials and facilitate the introduction of the new VSM pay framework”, with the latter recommended to include criteria for determining when either an additional 15% may be awarded for those working in the most challenging systems or an additional 10% may be awarded for taking on temporary extra responsibilities.
3. Calculated using mean annual earnings per person headcount and average contracted hours to estimate a full-time equivalent level. This includes non-basic pay. Rounded to nearest 100.
4. Ranges are based on basic pay only and so not directly comparable to previous column which includes non-basic pay.
5. The maximum uplift to junior doctors’ pay applies to those on the highest specialty training pay point and includes an extra £1,200 (on top of the 2% uplift) as part of the additional investment agreed in the 2018 framework agreement.
6. Excludes GPs in training.
Source:
Nuffield Trust analysis, based on pay settlement and NHS Digital’s Staff Earnings Estimates, Hospital and Community Services Workforce Statistics and General Practice Workforce Statistics.
Analysis of disparities in pay between groups is complex and typically seeks to measure between groups doing the same work. But at a crude level it is perhaps striking that, for example, the absolute increase to basic pay for consultants (up to £5,130) will be far greater than that for nurses (up to £1,834) and clinical support workers (up to £1,724). These latter groups have more female and more Black and Black British representation. Given the review bodies’ remits include taking account of the legal obligations on the NHS, including anti-discrimination legislation, it is important to be mindful of the risk of the pay settlements contributing to direct or indirect discrimination.
The risk of accentuating pay differences between staff groups is also potentially problematic given the intention for these different staff groups to increasingly work together in multidisciplinary teams. Across the Agenda for Change contract – which covers the majority of staff – the effect of the pay deal will be to close the relative difference between the highest and lowest, given the flat rate of £1,400 extra represents a larger proportional increase for the lowest paid (up to 9.3%) than those at the very top (1.3%).
However, as already alluded to, this is not the case across the different contracts. In fact, the data suggest we already have one of the largest differences between fully qualified hospital doctor and nurse pay across developed countries health services.
Of the 26 countries with broadly comparable data, only South Korea reportedly has a higher difference in pay between the two professions (with salaried specialist doctors paid on average 3.7 times that of hospital nurses) than England (3.2 times), with the median across the countries far lower (2.3 times). While we don’t know exactly how average salaries will be affected in England, the disparity will likely increase in absolute terms (with basic pay of consultants increasing by between about £2,000 and £3,700 more than nurses) and do little if anything to decrease the gap in relative terms.
There are many reasons why these pay differentials between staff groups have developed. But without considering pay deals in the round, there is a risk that deals covering a smaller number of staff are more likely to receive increases as they may look more affordable in terms of overall cost implication.
Particularly in the context of rising living costs, it is worth reflecting on how the pay settlement affects actual pay packets as opposed to the underlying pay frameworks. The figures above – as with those presented around the publication of the pay deal – do not account for the pay progression that some existing staff are due, to reflect their years of service. To demonstrate this, we have charted the likely change in basic pay for existing staff in selected groups, which shows pay progression can be substantial compared to the effect of the pay settlement.
Chart
Note:
Roles shown as at March 2022. Our analysis does not include the one-off consolidated payment which applies to a small proportion of senior staff. Please refer to Annex 2, table 10a for further information.
Source:
Source: Nuffield Trust analysis, based on pay settlement and NHS Digital’s Staff Earnings Estimates, Hospital and Community Services Workforce Statistics and General Practice Workforce Statistics.
