After years of refusing to negotiate with the unions on fair pay in the NHS, your industrial action has meant that the Government has finally sat down to talk. They have come back with a new offer for pay and Unite and the health unions who joined together in strike action have agreed to put it to our members for consultation.
It is now up to you as members to decide
Your action has made some improvements to the pay imposition from government announced by Jeremy Hunt last year, but it has not delivered all that we wanted and there are pros and cons that need to be considered.
Different groups of staff will be impacted in different ways so please think carefully about what this offer will mean both to you personally and other colleagues who work with you.
What is the current deal on the table?
To see the full letter text of the current pay offer from health secretary Jeremy Hunt click here. [PDF]
The headline points on the current pay offer are as follows:
- Abolition of the bottom point of Agenda for Change and increasing pay point 2 to £15,100. This means an increase of 5.6% for staff on point 1 and 3.1% for staff on pay point 2;
- 1% consolidated pay rise for all staff up to point 42 from April 2015
- A further consolidated pay rise of an additional £200 for staff on pay points 3-8. This means staff on these pay points will receive an increase of between 2.1% and 2.3%
- An incremental freeze in 2015/16 for staff on pay point 34 and above for one year only;
- Urgent talks to take place with a view to the proposed redundancy changes being implemented from 1 April 2015, including a floor for calculation of redundancy payments of £23,000 and a ceiling for calculation of £80,000 with an end to employer top up to pensions for early retirement on grounds of redundancy.
- The Government “reaffirm its commitment to the NHS Pay Review Body”. It “will continue to have an important role in making future recommendations on pay uplift for NHS staff in relation to 2016/17 and thereafter.”
- As part of the offer Government asks the Trade Unions to commit to talks on further reforming Agenda for Change.
- An agreement to suspend legal action and cuts to ambulance staff sickness and unsocial hours policies, as well as discussions on the impact of working longer and a national recruitment and retention premium (see 9 below)
What was the previous imposed pay offer?
Health Secretary, Jeremy Hunt had previously announced a two year imposed pay freeze for all staff except those at the top of their pay Band.
Those people at the top of their pay Band would receive a non-consolidated payment (see below about consolidation) based on the 2013/14 spine for two years:
- 2014/15 a 1% non-consolidated payment on the 2013/14 spine
- 2015/16 a 2% non-consolidated payment on the 2013/14 spine
The latest estimate from the PRB for staff at the top of their pay band was 47%, meaning over half of all NHS staff would not receive these non-consolidated payments.
The new offer on the table does not alter the pay imposition for 2014/15 but would replace the 2015/16 payment.
Will the new offer change Government pay policy for 2014/15?
The Government has refused to even consider this and has made it clear that they are not prepared to revisit the pay imposition of 2014/15.
What is the difference to the overall pot of money on offer?
Unions estimated that the new offer puts more money on the table overall. The existing pay policy, which would give 2% non-consolidated for the top of the bands, would add £280 million to the NHS pay bill (currently £34bn). The proposed offer would add £345 million to the pay bill for 2015/16 and additional money is committed from 2016 onwards as it is consolidated which means it is a recurring increase.
Before Jeremy Hunt’s pay announcement last year the Treasury had budgeted for a flat 1% increase for all staff which was estimated to have cost £450 million.
The new offer redistributes money from some parts of the pay system to others particularly from freezing increments and pay for higher paid staff and while there is new money available it is still less than the Treasury had budgeted for.
If accepted, when will this new offer be implemented?
If you accept this offer, any changes to your pay will take place from April 2015.
Is this new offer an end to the pay freeze?
The new offer does not change the pay imposition for 2014/15 but for most Agenda for Change staff this offer will result in a consolidated pay rise of 1% on the 2013/14 spine. The exceptions to this are staff above pay point 42.
Unions estimate that all but 13,000 higher paid Agenda for Change staff will receive a consolidated pay increase of 1% from April 2015. This means over 900,000 NHS staff WILL get a consolidated increase to their pay based on the 2013/14 spine in addition to any contractual increments that they will receive.
Is this a pay rise in real terms?
The term “real terms pay rise” means that someone’s pay has risen higher than prices (i.e. the cost of living)
In recent years prices have been rising faster than wages and because of Government pay freezes and caps NHS workers have had real term pay cuts of between 13%-19% since 2010.
RPI Inflation, which measures price rises, is currently running at 1.6% and is predicted to be at 2% by April when the offer will be implemented. This means that for most staff the offer of 1% is still below inflation and therefore a real terms pay cut.
The exception to this are the lowest paid staff (On pay point 8 or below) who will receive a real terms pay increase for the first time since David Cameron became Prime Minister - Given that inflation is expected to be 2% this increase will mean a 0.1%-3.6% increase in real terms.
Will the lowest paid get the Living Wage?
The lowest paid staff have been hit hardest by the fall in their income caused by Government pay policy. NHS trade unions have been campaigning for greater pay fairness, reducing pay inequality across the NHS and introducing the hourly Living Wage of £7.85 (or £9.15 in London) for the lowest paid.
For ideological reasons the Government has actively avoided implementing the Living Wage in their latest offer, leaving the lowest pay point 11p an hour short at £7.74. That said it is estimated that between 200,000 and 250,000 lowest paid staff in the NHS will receive a real pay rise on their current pay rates. Most of these will be above the Living Wage Level.
The lower pay scales would change as follows:
NHS pay spines downloadable PDF
||Existing pay policy
Change pay point
Annual Salary 2014/15(£)
(1% non-consolidated at
top pay band
Annual Salary 2015/16 (£)
2% non-consolidated at
top of pay band
Annual Salary 2015/16(£)
under the proposed offer
Existing hourly rates
Proposed hourly rates
Cash uplift under
this offer (£)
|Pay point 1
|Pay point 2
|Pay point 3
|(top of band 1)
|Pay point 4
|Pay point 5
|Pay point 6
|Pay point 7
|Pay point 8
What is the difference between a consolidated pay rise and a non-consolidated pay rise?
The Government had previously refused to give any NHS staff a consolidated payment. What this means is that even for those that did receive the 1% non-consolidated payment last year, this was time limited and not part of their permanent contractual pay for the following year. For this reason the payment did not count towards valuable other terms and conditions such as pensions or unsocial hours payments. This “non-consolidated” payment is therefore better understood as a “bonus”.
The new offer accepts that the 1% rise and £200 for the lowest paid will be consolidated and integrated into the pay spine going forward. For those at the top of their pay band this will look like a pay freeze on last year’s imposed “bonus” but the consolidation of the uplift will mean rises in other contractual terms such as pensions and unsocial hours payments that should lead to increases in overall pay.
The impact of this will be different for different staff, so look carefully at your pay slips in order to estimate the impact on you.
Will I still get my incremental pay point rise?
For most staff the answer is Yes.
The exception to this is staff above pay point 34 (roughly 60,000 NHS staff or 6% of Agenda for Change).
Government had previously described annual pay increments in Agenda for Change as a pay rise and had therefore blocked pay rises for people who were not at the top of their pay band. The Agenda for Change pay agreement understands that the top of the pay band is the “rate for the job” and annual incremental rises are in recognition of the increasing experience and training of newer staff.
While the new offer does freeze increments for staff above pay point 34 (earning currently £40,555 per year), it accepts that increments are not part of the pay rise and that the freeze for the higher paid staff will only be for one year.
Unite does not accept that it is right to freeze incremental progression at any level and will continue to resist this move becoming a precedent. The current move will penalise clinical leaders as well as other NHS managers.
What do the changes to redundancy mean to me in practice?
This depends very much on your current pay rates and your years of service.
The proposed redundancy changes were not in the previous pay offer and are designed to cut around £27 million from the pay bill.
The offer is proposing to bring in a new redundancy pay floor figure of £23,000 and a ceiling of £80,000 for calculating redundancy, as well as an end to employer top up to pensions for early retirement on grounds of redundancy (see below).
It is estimated that this could benefit lower paid staff with shorter service (including part time staff) while the ceiling could be a significant loss for some groups of older staff with long service and those on higher pay bands.
Example of a winner
NHS worker on the new pay point 3 earning a base salary of £ 15,363 with two years’ service.
Under the current system this person would receive 1 months’ pay for every year of service – in this case that would be equal to £2,560.50
Under the new system they would receive a minimum of £3,833.3
How will pensions for those made redundant be affected by the end of the employer top-up?
At present members made redundant who are aged over their minimum pension age (which is 50 for some and 55 for others) are given an option to draw an early pension with no reduction for early payment. Members have to give up all or part of their redundancy pay in order to get this valuable pension enhancement.
In many cases the cost of the pension enhancement is a lot more than the value of the redundancy pay given up and the balance of cost is paid by an employer top-up.
The removal of the top-up means that members to get the enhanced top-up will have to pay the difference between their redundancy pay and the full cost themselves. This clearly makes the pension enhancement option less attractive than it was but members taking it may still save tax on their redundancy payment
How will pay be set in the future?
In recent years the Government has run rough shod over the Independent Pay Review Body that recommends your pay rises. Jeremy Hunt took this process a step further last year by actively ignoring the recommendation to pay all staff a 1% consolidated pay increase that had been budgeted for by the Treasury.
The offer makes a clear commitment to use the NHS Pay Review Body for future pay rises. This commitment is broadly welcome, assuming it is unhindered in doing its job of making independent recommendations on NHS pay.
This Government has done little to show it is trustworthy on such commitments however, but Unite and other trade unions will rigorously hold the next Government to this, whichever party is in power.
What does this offer mean to Agenda for Change?
While the offer commits unions to continue discussions on reform of Agenda for Change this is part of the normal ongoing discussions that have taken place since Agenda for Change was agreed.
The offer does not commit unions to any changes to Agenda for Change and the current offer has no bearing on outstanding issues, such as proposals for seven day working.
Unite will continue to defend your wider terms and conditions in any further discussions.
I am an Ambulance worker what does this offer mean for the dispute on Annex E?
The offer includes a commitment to “curtail discussions” on changing Ambulance terms and conditions particularly in relation to sickness and unsocial hours payments. Key to this is the agreement to suspend the High Court legal case that the Government has been pursuing on these issues. There are also possible increases to employer contribution to ambulance staff pensions in the proposals and employers have agreed to look at the job demands and/or consider introducing a national recruitment and retention premium for ambulance staff. The ambulance employers will also look at the working longer review separately for front line ambulance staff.
It has been a key demand to stop the Government’s legal case and the agreement means that ambulance staff will continue to get contractual unsocial hours and sickness benefits as before.
What are the additional pension contributions for front-line ambulance staff?
In the new 2015 NHS Pension Scheme the normal pension age at which members can retire unreduced is set at a member’s state pension age. For staff transferring this could mean pension age could be 66, 67, or 68 depending on a member’s age.
There is a facility in the 2015 Scheme for additional contributions to be paid as will allow pension to be drawn unreduced from age 65. Members can take out a contract to pay these extra contributions but there is also a facility for employers to pay contributions on a member’s behalf.
The pay offer includes a provision whereby ambulance employers will pay half of the cost of this early retirement reduction buy-out if the member elects to take out a contract and pay the other half of the cost. Very roughly the full cost of buying out each one year of reduction is an additional contribution of about 1.3%.
Is Unite recommending this pay offer?
Unite is neither recommending nor rejecting this offer. The offer has pros and cons for different members but is substantially different from the previous pay announcement.
The Unite in Health National Industrial Sector Committee and national negotiating team acknowledge this as a new offer and the best that can be achieved by negotiations without further industrial action.
If we reject this offer will I there be more strike action?
Rejection of this offer is likely to lead to further industrial action, unless an alternative offer is put on the table by the Government.
Further industrial action is now planned to take place on Friday 13th March 2015.
If we reject this offer, when will future strike action take place?
Due to the Consultative ballot strike action for January was suspended and the further planned day of 25th February 2015 has been postponed to allow full consultation.
If you reject this offer further industrial action will now take place on Friday 13th March 2015.
Are all NHS trade unions taking the same stance?
All Unions are consulting members about the current offer.
Strike action has shown that with strong unified trade union action we can challenge arbitrary decisions, even from a Government as hostile as this one. That unity and solidarity has been a major positive of the action and it is something that Unite will continue to work to preserve. The lay leadership of striking unions who led from the front will consider the implications of the consultation collectively and have agreed a further strike date on 13th March 2015 should the offer be rejected.
How can I have my say about this offer?
You will receive a consultative ballot paper to your home address that will ask you to state whether you are accepting or rejecting the pay proposals for 2015/16.
You will need to return this ballot by the 27th February 2015.
Who gets to have a vote?
All members in England who are employed on NHS Terms and Conditions (Agenda for Change) are eligible to vote in the ballot. If you are covered by another national agreement, e.g. Doctors and Dentists or VSM, or you are engaged on local terms you won’t be eligible. Members working for private contractors should not be included, unless you are on one of the small number of contracts included in the original ballot for industrial action.
What happens if I haven't received my ballot paper yet?
If you have not received a ballot paper by Friday 13 February 2015, please contact the
Unite Health team here, giving your full name, address and membership number using the heading 'NHS Ballot Paper'.
What if I have just joined Unite or I’m not yet a member?
As long as you fit into the categories above you can be included in the vote.
If you are not a member, you cannot have a say in this consultation but you can join Unite online.
What is happening to unsocial hours?
This offer has no impact on the issue of 7 Day Working and will not lead to changes to your unsocial hours' payments system.
We know this is an issue that the Government and many employers would like to change and the NHS Pay Review Body has been asked to make ‘observations’ on the wider issue of 7-day working. The Department of Health wants to use this to look at options for changes to unsocial hours payments. Without a change in health policy or funding, it is likely that proposals to cut unsocial hours rates will be made in the next year or two and that trade unions will need to work together to defend pay from these attacks. Unite is fully committed to defending our members pay, terms and conditions.
Will the pay award increase the % pension contribution that I pay?
Pension contribution rates are set by salary bandings therefore as you move through your band, or move to a higher band, you pension contribution rates may increase. As the pay offer is consolidated, and will therefore increase basic salaries, this may have an impact on pension contribution rates.
This could happen to any member whose pensionable pay is currently close to a tier boundary on the salary related contribution scale, as with any pay increase.
The current salary bands are included below and more information can be found by contacting the NHS Pensions Agency http://www.nhsbsa.nhs.uk/Pensions.aspx
Contribution rates before tax relief
|2014/15 tiers up to
||2015/16 tiers up to
||Contribution rate in 2014/15
There is a particular issue in relation to pay point 22 on the Agenda for Change pay scale. (see below)
I am on pay point 22, won’t the pay rise be cancelled out by my increased pensions contribution?
Yes, but you should still see an increase in your take home pay due to your incremental rise and the impact of pay consolidation on your other terms and conditions such as unsocial hours and location allowances.
A 1% pay increase moves this scale point from a Tier 3 contribution of 7.1% to a Tier 4 contribution of 9.3%. In interpreting the effect of this we need to note that most staff currently on pay point 22 also stand to receive an incremental increase which would take them into Tier 4 anyway, and so the impact may be more on staff on point 21 but only until they get a further increment. Also many staff on these pay points will have earnings which are pensionable over and above their basic pay point salary e.g. unsocial hours or location allowances, and so may already be in Tier 4.
What is the significance for pension of a pay rise being consolidated or non-consolidated?
A consolidated pay rise will increase the value of your pension.
Only consolidated pay rises are pensionable. Neither you nor your employer pay pension contributions on non-consolidated pay awards and so they do not add to your pension benefits. In relation to final salary benefits (as earned in the 1995/2008 Pension Scheme) your pension is calculated on your final pay in the year or years immediately before retirement and so the pension impact may not be clear until sometime in the future – though if an unconsolidated increase results in a permanently lower level of pensionable pay it will reduce your pension. In a CARE Scheme (like the 2015 Scheme into which the majority of employees will transfer in April) the pensionable pay in every year is used to calculate your pension – and so a pay award paid on a non-consolidated basis will always result in a lower pension than one paid on a consolidated basis.