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The new Agenda for Change (AfC) pay deal, agreed earlier this week, will affect pay for over a million NHS staff (but excludes doctors and dentists, who have separate contracts). The deal was accepted by all unions except for the GMB, who said the deal promised 'jam tomorrow'. But what was so wrong with a deal that apparently gives a minimum pay uplift of 6.5%?

Inflation-busting?

Thanks to inflation, pay for nurses has fallen by 14% in real terms since 2010. The 6.5% uplift promised runs over 3 years, during which time inflation is set to total 9%.

In today's terms, the AfC Band 3 pay scale was £19,961-£24,040 in 2004 and £16,698-£19,852 in 2017. Under the new pay deal, in 2020 Band 3 staff will all receive approximately £19,100 in today's terms.

The following summarises the pay changes 2004-2020 for AfC pay bands 1-7 (all figures in today's terms):

Band 1 - £16,754-£18,277 (2004) --> £16,276 (2020)

- £16,754-£18,277 (2004) --> £16,276 (2020) Band 2 - £17,315-£21,483 (2004) --> £17,480 (2020)

- £17,315-£21,483 (2004) --> £17,480 (2020) Band 3 - £19,961-£24,040 (2004) --> £19,100 (2020)

- £19,961-£24,040 (2004) --> £19,100 (2020) Band 4 - £23,328-£28,057 (2004) --> £21,837 (2020)

- £23,328-£28,057 (2004) --> £21,837 (2020) Band 5 - £27,255-£35,272 (2004) --> £24,380-£27,675 (2020)

- £27,255-£35,272 (2004) --> £24,380-£27,675 (2020) Band 6 - £32,546-£44,090 (2004) --> £29,991-£34,252 (2020)

- £32,546-£44,090 (2004) --> £29,991-£34,252 (2020) Band 7 - £39,281-£51,786 (2004) --> £36,968-£40,230 (2020)

It is fairly easy to see that NHS staff have still suffered a real terms pay cut, regardless of the apparent generosity of the new pay deal. The large pay rises reportedly given to the lowest paid staff will still leave them with salaries below £10 per hour.

What about pay progression?

Under the existing deal, a system of pay progression rewards experience with annual pay rises. Thanks to the real terms pay cuts detailed above, the pay progression system was the only way for many NHS staff to receive a pay rise. The new AfC deal removes annual pay progression, meaning that many staff will see their real terms pay fall each year as pay grades fail to keep pace with inflation. Thus, a short term 'pay rise' is being offered in return for removal of automatic pay progression forever after.

A 25% pay rise for some?

The percentage pay rises reported are misleading as they apply over a three year period during which staff would otherwise have seen small pay rises thanks to annual increments. If we adjust for those, a 25% pay rise is actually an 11% pay rise. If you adjust for inflation, this remaining pay rise drops to almost zero.

No strings attached?

Now here comes the punchline. In return for a pay rise that fails to address historic pay stagnation, NHS staff will see a reduction in sick pay, unsociable hours pay, and pay increments. And the unions have agreed that there will be a crackdown on staff taking sick leave. Overall, NHS staff are getting a worse deal than before, in return for a pay rise that isn't really a pay rise.

Why was the deal accepted?

The current government have treated NHS staff poorly, imposing a 1% pay cap and thus enforcing yearly real terms pay cuts. In comparison a 6.5% pay rise looks very generous, and the unions will have believed this was the best they could get. So the fault lies not with the unions, who likely did a reasonable job in a bad situation, but with the government, who have continued to under-invest in the NHS. Until the government commits to properly looking after staff, there will continue to be an exodus of trained personnel from our hospitals.