Steve Barclay told to make cuts to existing budget for NHS salary hike

A payrise but at what price? Steve Barclay is ordered to make cuts to existing budgets to fund salary hike given to NHS workers after strike chaos

• Health Secretary will need to find an additional £4billion within existing budgets
• Downing Street confirmed new offer will require an extra £2.7billion for this year

Steve Barclay has been ordered to make cuts to help pay for a salary hike for NHS workers amid a row over where the money will come from.

The Health Secretary will need to find an additional £4billion within existing budgets to fund a new pay offer to nurses, ambulance workers and physiotherapists.

The Treasury may step in with some new funding if cost-cutting and re-directing existing spending isn’t enough to reach the figure.

Downing Street yesterday confirmed the new offer will require an extra £2.7billion for this year (2022-23) and £1.3billion for next (2023-24).

But ministers stress that frontline services must be ring-fenced from any cost-cutting measures.

The Health Secretary will need to find an additional £4billion within existing budgets to fund a new pay offer to nurses, ambulance workers and physiotherapists

Mr Barclay is understood to believe that money is still being wasted on unnecessary NHS bureaucracy and that more can be axed to unlock funds.

There may also be pots of money in certain areas, such as funding or research, which have been underspent.

There was confusion yesterday over where the money will come from to pay for the new offer.

The GMB union, which represents ambulance workers, said it was assured during talks that it would not come from the health department’s existing budget and that the Treasury would provide new money.

Rachel Harrison, the national secretary of the GMB, told the BBC’s Today programme that union negotiators were assured that funding for the 5 per cent pay rise for 2023-24 would not come from the existing health budget.

She said this was a condition set by the GMB and some other unions.

She said: ‘We wanted reassurance that this was additional money and it was not going to come out of NHS current budgets and that was the commitment we were given by the government.

Rachel Harrison, the national secretary of the GMB, told the BBC’s Today programme that union negotiators were assured that funding for the 5 per cent pay rise for 2023-24 would not come from the existing health budget

‘We were told that this would be additional money and it wouldn’t come out of existing health budgets.’

But when deputy prime minister Dominic Raab was asked to confirm this in his interview, he refused and suggested it would come from existing budgets.

Pressed on whether the health department would get new money, he said: ‘I think the expectation will be the budget is set, it provides enough resource..’

A Number 10 spokesman said talks over where the money would come from were ongoing.

They said: ‘The Secretary of State has said we will look at areas of underspend and discuss these things with the Treasury in the usual way.

‘As you would expect, the Treasury and health department will now work together to resolve any new funding needs in the usual way, but we’ve been clear that this won’t impact on frontline services.’

They added: ‘This [money] will not come from patient-facing services…We’re committed to ensuring this won’t have any impact on frontline services or the quality of care that patients receive.’

When deputy prime minister Dominic Raab was asked to confirm this in his interview, he refused and suggested it would come from existing budgets

On Thursday Mr Barclay said: ‘We are very clear this will not come from patient-facing aspects.

‘Of course we will look at areas of underspend, areas of administrative saving, and discuss this with the Treasury in the usual way.’

Funding for a 3.5 per cent pay hike next year has already been included in the health department’s existing budget.

Health unions have agreed to pause strikes and ballot members on the new offer.

Ministers hope it will be accepted and bring to an end strikes which have caused more than 140,000 operations and appointments to be cancelled.

If accepted, the offer will see the one million staff on the Agenda for Change contract receive a 5 per cent pay rise in 2023/24, plus an additional payment to the lowest paid to bring them in line with the national living wage.

Each worker would also receive a backdated 2 per cent non-consolidated payment for 2022/23 and a ‘Covid recovery bonus’ worth an average of 4 per cent.

It means staff would receive a one-off payment of between £1,655 and £3,789, in addition to the £1,400 consolidated pay rise already in place for 2022/23.

The new offer also includes midwives and porters but not junior doctors, who are on a different contract and who this week staged a three-day walkout in pursuit of a 35 per cent pay rise.

Downing Street yesterday called on them to stop the strikes and enter pay negotiations like nurses, ambulance workers and physiotherapists.

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