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NHS will need more money if staff get pay rises above 1%, ministers warned

Health Secretary Jeremy Hunt confirmed the health service pay cap was being scrapped.

Ministers have been warned they will need to find additional funding for the NHS if staff are to receive pay rises above 1%.

Health Secretary Jeremy Hunt confirmed the pay cap was finally being scrapped for the health service following earlier announcements of above-1% rises for police and prison officers.

However NHS England chief executive Simon Stevens said that after seven years of austerity, the service would need extra money if pay rates were to start catching up with other sectors of the economy.

In the Commons, Mr Hunt said he had been given additional “leeway” by Chancellor Philip Hammond when it came to negotiating next year’s pay round, but indicated any increase would have to be linked to improvements in productivity.

Unions warned that without additional funding the move was meaningless and was simply a code for cuts to jobs and services.

Mr Hunt told MPs that he hoped there could be a “win-win” as a result of the additional flexibility he had been given.

“We recognise it wasn’t sustainable to carry on with the 1% going forward and that’s why next year we’ve been given the leeway to have more flexible negotiations,” he said.

But pressed on whether it would be fully funded, he said: “That is something I can’t answer right now because the latitude that the Chancellor has given me in terms of negotiating future pay rises is partly linked to productivity improvements that we will negotiate at the same time.”

Giving evidence to the Commons Health Committee, Mr Stevens acknowledged that after years of pay restraint, NHS staff were entitled to more money but questioned how such an increase would be paid for.

“Over time it will be necessary for NHS staff to get rates of pay that are consistent with the rest of the economy,” he said. “But that does need to be funded.”

Mr Stevens said that without additional cash from Mr Hammond in the Budget on November 22, the NHS would struggle to meet its existing commitments.

“The budget position for funding currently pencilled in for the National Health Service for next year and the year after looks extremely challenging and, if not mended, I think it is going to be very hard for the NHS to do all that has been asked of it over the course of the next year and the year beyond,” he said.

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NHS England chief executive Simon Stevens (Stefan Rousseau/PA)

“Decisions that are taken on November 22 will determine the shape of the National Health Service next year and the year after.”

He added: “We are having to operate in very constrained circumstances which is the consequence of seven years worth of the NHS budget growing at 1% compared with a historic rate of 4%.

“We are spending £23 billion a year less than if we were spending at French or German levels as a consequence.”

Kevin Brandstatter, national officer of the GMB union, said: “If there is no new money then it’s a con trick to claim that the pay cap has ended.

“Without new funding ‘productivity improvements’ just looks like code for cuts to jobs and services.”

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