Monitor report says NHS pay freeze risks care

Continuing the pay freeze in the NHS is a threat to quality of healthcare, says a new report from sector regulator Monitor.

The report comes on the back of recent calls from employers and ministers for no pay increase for NHS staff next year.

This has led to an angry response from UNISON, and the evidence is now stacking up to show the damage that health secretary Jeremy Hunt would cause by withholding chancellor George Osborne’s promised 1% – even though that is so small.

Monitor’s warning echoes UNISON’s concern about the growing reality gap between a government that wants to continue the hardship for healthcare staff by freezing pay, and a system that needs to motivate staff like never before in order to weather the cuts to NHS funding.

The report notes: “Holding back wages is an approach consistent with many other countries. Health systems across Europe have contained health spending in recent years using top-down wage freezes or reductions rather than structural reforms to services.

“However, the impact on the quality of patient care of freezing wages poses a significant challenge to countries pursuing this policy.”

It estimates that “maintaining a real wage freeze for the next eight years and to the end of 2021/22 could save the NHS an additional £8bn.”

The report says that: “This would appear to reduce costs in future years, because it lowers the baseline from which future wages rises are calculated.”

But then it says: “We do not believe this is a sustainable strategy for improving productivity in the NHS. Periods of wage restraint are generally followed by periods of ‘catch up’ with their trend level in subsequent years. Extended wage restraint also impairs recruitment and staff retention.”

UNISON in health

Key issue: Defending Agenda for Change