This Monday will see the second day of strike action by NHS workers in a dispute with the government that seeks to deny a recommended 1 per cent pay rise. This dispute cuts to the very heart of the crisis building within our health service as a result of the unprecedented funding squeeze imposed by the current government exposing the Prime Minister’s rhetoric about protecting NHS spending. This fight is not only for fair pay for health service workers. It is a fight for a properly funded NHS with investment in a secure, highly skilled and valued workforce delivering the very best care for us all. As I have blogged elsewhere, the government’s refusal to implement the recommendations of the independent Pay Review Bodies for the NHS shows a contemptuous disregard for the radiographers, physiotherapists, nurses, midwives, porters, pharmacists, consultants, podiatrists and others in our health service who are facing five years of real terms pay cuts, with staff losing over 10 per cent of the value of their wages since 2010. Source: Office for National Statistics Source: Staff Side Evidence to NHS Pay Review Body 2014/15 This is leading to an alarming decline in the morale and motivation of NHS workers:
- Only 55 per cent of respondents to the 2013 NHS Staff Survey in England would recommend their organisation as a place to work.
- The UNISON membership survey 2013 found that 75 per cent of respondents believed morale was worse than 12 months ago.
- The Chartered Society of Physiotherapy (CSP) membership survey found that 66 per cent believed that morale had declined in the last 12 months, with 18 per cent saying it was “a lot worse”
- Unite’s 2013 membership survey found that morale and motivation was worse for 68 per cent of its members how work in the NHS.
And, of course, this cannot be good for patients. As the NHS Pay Review Body commented:
“We recognise the connection between quality patient care and the morale and motivation of the staff delivering that care. Our conclusion was that Government statements have led staff to expect a pay settlement this year of around 1 per cent. If these expectations were to be dashed, patients would be impacted through declining staff morale and engagement.”
Despite the fact that the Pay Review Body stated that: “the Department of Health and the Scottish Government told us that funding was being made available to employers to cover a 1 per cent rise this year”, the government contends that there is no more money to award a pay rise. Yet by its own admission the government has spent over £1.5bn on its top down reorganisation of the health service and it has required the NHS to return over £3.6bn in surpluses to the Treasury in the last two years.
Why then can it not honour a meagre 1 per cent pay rise that would cost less than a third of this?
The answer to this lies in the government’s imposition of its austerity agenda on the NHS, despite David Cameron’s assurances of protecting health service funding. Published last month, the Five Year Forward View sets out a short to medium forecast for NHS funding requirements, produced by NHS England, Public Health England, Monitor, Health Education England, the Care Quality Commission and the NHS Trust Development Authority.
The Forward View predicts that a combination of growing demand (if met by no further annual efficiencies) and flat real terms funding would produce a mismatch between resources and patient needs of nearly £30 billion a year by 2020/21.
But, as the Kings Fund points out, the funding plans set out in the 2010 and 2013 Spending Rounds amount to a 0.1 per cent marginal increase per year to 2015/16, although lower than expected inflation resulting from prolonged economic stagnation has meant that this has been close to 0.5 per cent with a real terms decrease in 2010/11. This comes at a time when both demand for services and costs of treatment are rising. Traditionally the NHS has benefitted from an average of around 4 per cent increase in funding per annum.
The government’s “real terms increases” are falling far short of meeting the real needs of our health service today, a trend likely to continue in years to come. Instead, this massive funding gap is expected to be plugged almost entirely through greater efficiency savings, a proposition that few commentators find credible. The efficiency targets of 3 per cent a year set out in the Forward View are particularly stretching. Traditionally NHS managed 0.8% efficiency savings per year but this has increased to around 2 per cent in the last few years.
And this is where the government’s attack on NHS pay comes into play. The 2 per cent efficiency savings made in recent years has been heavily dependent on pay restraint. Over £1.5bn or 30% of savings made in last four years have been a result of reduced pay bill resulting from 21,000 job losses and the pay freeze and cap.
True to form, the government is asking the workforce and patients to bear the burden of a funding crisis brought about by its drive to cut public spending. Instead of providing sustainable funding to enable the NHS to drive through real productivity increases, based on collaboration, integration and innovation, it is asking NHS workers to sacrifice their pay to help plug the gap.
Few believe this approach is sustainable. Reflecting similar points raised by the Health Select Committee, NHS Employers and Monitor, the Kings Fund, in their report on the NHS productivity challenge, state that:
“current productivity policy levers – such as freezing pay and bearing down on the tariff – were not seen as sustainable, even over the next few years. With ‘salami slicing’ of budgets, and having all but exhausted the more traditional internal cost-reduction efforts, local health economies needed to think more collectively (and with guidance) about how to provide services within budget.”
Not only is this unjust and unsustainable but it presents a hugely false economy. At a meeting of the Health Select Committee last week, Anita Charlesworth, Chief Executive of the Health Foundation, told MPs that:
“It is clear as well that morale and engagement of staff in the NHS is declining, all of which makes it harder and harder to recruit “
She added that the inability of NHS providers to recruit permanent staff meant that:
“we are seeing their expenditure on temporary staff rise. We saw last year a big increase in the numbers of staff employed by the NHS. That has flattened off. I think it has flattened off because people simply cannot recruit. They need more head count but are having to get that through temporary and agency staff. That is much more expensive.”
No wonder then that the Observer reported earlier this month that:
NHS spending on agency nurses and staff has spiralled to more than £5.5bn over the past four years and is continuing to rise amid a debilitating recruitment crisis in the health service. Budgets for temporary staff this financial year have already been blown apart, it can be revealed, with spending in some parts of the NHS running at twice the planned figure.
The NHS is possibly facing its biggest ever financial crisis, making an utter mockery of the glib government rhetoric about real terms increases in health spending. This is a growing crisis that is already beginning to impact on patient care, with waiting times up and treatments being rationed, a situation that is set to intensify over next year. Asking NHS workers to bear the brunt of this is unjust, unsustainable and self-defeating.
Those workers on the picket lines on Monday are fighting for their future and yours. The public know this, which is the vast majority continue to support their cause.