The Government has set aside funding to offer a maximum 2.8% pay rise for 2025/26 for NHS staff, its submission to the independent pay review body has revealed.
In written evidence to the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) and the NHS Pay Review Body (NHSPRB), the Department of Health and Social Care (DHSC) said it had ‘set aside 2.8% for pay for both’ groups.
It said it viewed this as a ‘reasonable amount to have set aside’ in a letter published on 10 December.
The DDRB is currently taking evidence ahead of its recommendation, but the timing of DHSC’s report suggests it will come earlier than in recent years, as health secretary Wes Streeting has instructed.
According to the DHSC’s submission document, arrangements for the 2025/26 GP contract are currently ‘subject to consultation’ with the BMA’s GP Committee, with final details to be published in spring 2025.
In July this year, the DDRB recommended a 6% pay rise for all UK GPs, which included partners for the first time in five years, and the Government accepted this recommendation in full.
However, the DDRB only advises on pay increases and not the total funding uplift received by practices, which was later set by the Government at a 7.4% uplift to the global sum for 2024/25.
In a section on ‘affordability’ for 2025/26, the Government’s evidence to the DDRB said: ‘DHSC has set aside 2.8% for pay for both NHSPRB and DDRB remit groups.
‘DHSC view this as a reasonable amount to have set aside based on the macroeconomic data and forecasts and taking into account the fiscal and labour market context.’
It also suggested that if the DDRB recommendation is above 2.8%, the Government is unlikely to accept it.
‘Accepting recommendations above what is budgeted for would mean stark trade-offs against activity and wider budgets or consideration to whether productivity improvements can unlock further funding,’ DHSC said.
The report recognised that the Government had taken ‘difficult decisions’ in the recent Autumn Budget, including by ‘increasing the rate of employer NICs to fund public services’.
However, it did not mention the impact of the NICs hike on GP practices, which Mr Streeting has said he will address, telling the GPCE that he is ‘working rapidly to finalise the funding envelope for general practice for 25-26’.
The report said: ‘Detail on how the Autumn Budget 2024 will impact on general practice finances was yet to be fully established at the time of writing our evidence.’
Meanwhile, NHS England’s evidence submitted to the DDRB, published at the same time, said that making an unaffordable pay recommendation for GPs will ‘significantly’ impact patient care and make the job ‘even harder’. It has also proposed a 2.8% pay settlement.
Its submission said that NHS staff ‘work incredibly hard’ and that it wants to see them ‘fairly rewarded’, in a way that ‘strikes the right balance’ on resources so that they have the ability to deliver the care they want for patients.
It also said warned that pay remains the largest component of NHS costs – around 65% of total operating costs – and that pay inflation ‘represents a material cost pressure’ that the NHS ‘needs to plan for and manage’.
NHS England set out that: ‘Our view on affordability considers the likely NHS budget from discussions to date with DHSC and what was set out by HM Treasury in the Autumn Budget 2024.
‘Based on this, we propose to set allocations for NHS planning on the basis of a 2.8% pay settlement. Every 0.5% increase above that costs around £700m, which is the equivalent to around 2% of elective activity (greater than 300,00 completed patient pathways).’
It added: ‘We have already made significant prioritisation decisions. Pay awards above what has already been allocated will require further tough re-prioritisation of the decisions already made, significantly impacting patient care and in turn making the day-to-day job of NHS staff even harder.’
Responding to the submissions, the BMA chair of council Professor Philip Banfield said the proposed pay rise ‘indicates a poor grasp of the unresolved issues’ in the NHS.
He said: ‘It is far below the current rate of inflation experienced by doctors in their daily lives and does not move significantly closer to restoring the relative value of doctors’ pay lost over the past 15 years.
‘This sub-inflationary suggestion from the current Government serves as test to the DDRB. The BMA expects it to take this opportunity to show it is now truly independent, to take an objective view of the evidence it receives from all parties – not just the Government – and to make an offer that reflects the value of doctors’ skills and expertise in a global market, and that moves them visibly further along the path to full pay restoration.’
