The truth about NHS pay – where is the money going?

Yesterday’s strikes by NHS workers elicited strong responses from patients, NHS workers and politicians. Nurses and midwives were understandably put front and centre of the unions’ campaigns – the public tend to prefer NHS nurses to NHS bureaucrats.

But some of the unions (most notably Unison) don’t just represent nurses and ambulance staff, but tens of thousands of NHS middle-managers.

For the avoidance of any doubt, all NHS staff got a pay rise.

Staff can move up the Agenda for Change pay scales regardless of what percentage increase Jeremy Hunt decides upon. What happened was that those who received an “incremental increase” by moving up the pay scales did not get an extra 1 per cent on top of that.

Those who did not move up a rung on the pay scale did get a 1 per cent rise.

Historically speaking, the NHS has received large, real term budget increases for a couple of years in a row, and then had a few years of lower spending. This changed around the turn of the century when the NHS was handed big budget increases throughout the 2000s. Between 1979 and 1997, NHS spending increased in real terms by an average of 3.2 per cent. Between 1999 and 2008, this figure was 6.3 per cent. NHS spending has been pretty much frozen in real terms under the current government.

But what was routinely lauded by politicians as “investment” by Gordon Brown et al was no such thing. As the National Audit Office noted in 2010, most of the extra funding went towards higher staff pay and increases in headcount. During that period, productivity went down. Taxpayers got worse value for money.

But what’s happened since 2008? The table below shows the mean basic pay pay per full-time equivalent for 8 different categories of staff. If this really the best way what little money for pay increases could be allocated?

Each year is for the 12 months up to the June of that year. Data taken from HSCIC’s NHS Staff Earnings Estimates to June 2014

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