The 2017 Budget (22 November) confirmed the government’s decision earlier this autumn to end the 1% public sector pay policy and committed to fund pay awards in the NHS as part of a pay deal covering ‘Agenda for Change’ staff groups (including nurses and paramedics).
A briefing forming part of the documents published on budget day stated:
‘Any pay deal will be on the condition that the pay award enables improved productivity in the NHS, and is justified on recruitment and retention grounds.’
The secretaries of state for groups covered by pay review bodies will shortly issue remit letters to these bodies to begin the pay round for 2018-19, triggering the evidence submitting process.
Responding to the budget announcement, Danny Mortimer, chief executive of NHS Employers, said:
‘We look forward to continuing to work with trade union colleagues and the Department of Health to agree how contract arrangements can be reformed and our employees benefit a welcome lifting of the pay cap. There is a great deal to discuss but the Chancellor’s commitment to fund the additional pay bill is welcome. Meanwhile, NHS organisations are working hard to address staff concerns and better retain vital skills. But they also need national support.’
The Chancellor also announced that the national living wage will increase by 4.4% to £7.83 an hour from 1 April 2018.
Sheila Atwood of XpertHR responded:
‘The 4.4% pay rise is good news for employees paid the national living wage, but may put pressure on pay budgets as many organisations are planning for a 2% pay rise across their workforce more generally.’
In other budget news, the Chancellor announced that employees on maternity leave will be able to suspend Save-As-You-Earn (Sharesave) contributions for up to 12 months, an increase from the current six months’ maximum suspension.
Share plan and incentives expert, Graeme Standen of Pinsent Masons, welcomed the change, but added that the details of the new arrangements are not yet clear:
‘The change to increase the limit to 12 missed monthly contributions, but only for those on maternity or parental leave, is likely to be made by specifying an amended savings prospectus, which would not require any statutory amendments. The budget document does not explain this in detail, however, referring only to expected HMRC guidance.’