It will cost struggling NHS services around £2 billion to fund the rise.
NHS workers will be offered a 5% pay rise this week but the health service will be forced foot some of the bill.
According to the Financial Times, in just a matter of days, NHS workers in England will be offered a 5% pay rise, but the Treasury is reportedly insisting this must come from existing budgets which were set last autumn.
NHS Employers has confirmed that 3% was budgeted for the 2022-2023 financial year but warned the additional 2% would cost NHS services around £2 billion.
Earlier this month, NHS England bosses warned unless funding is provided by the Treasury, the money would have to be pulled from other services.
NHS England’s Chief Financial Officer explained, “[A] pay settlement higher than 3% and no extra money would entail some really difficult decisions,” including cutting back in “major areas” such as primary care or cancer care.
Health unions will be unhappy with the offer as it is far below the rate of inflation, so a real-terms pay cut for workers. The average experienced frontline nurse is already £6,000 a year worse off in real-terms than in 2010 when the Conservatives first came to power.
A lower-than-inflation increase.
Responding to the news, Danny Mortimer chief executive of NHS Employers, warned of the potential consequences of a lower-than-inflation increase.
Mr Mortimer said they welcomed the news of a 5% rise but “It must however be noted than the reported five per cent increase doesn’t match the rate of inflation and in the context of the cost of living crisis and an exceptionally tight labour market, Government must go into this decision with their eyes wide open about the potential consequences of a lower-than-inflation increase.
“It’s deeply concerning that reports suggest the Treasury won’t be providing more funding for the NHS and Public Health services to cover pay increases. That puts NHS leaders in the impossible position of having to choose which services they will take money from in order to fund any pay increase.
“Based on allocations at the last Spending Review, the NHS has been funded to pay for a settlement of three per cent. Any award over this percentage, without additional funding, will cost the NHS somewhere between £900 million and a billion pounds.”
He concluded, “There would be no option for NHS leaders but to withdraw funds from critical services and projects including those intended to improve productivity and efficiency.”