NHS England has warned that it may need to make cuts to primary care funding if staff is awarded a pay rise of above 3% and it is not given more money to pay for it.
Investment in cancer services and community diagnostic centres could also be hit, it said.
It comes as the Government has yet to announce its final decision on this year’s NHS pay uplift.
NHS England chief financial officer Julian Kelly made the comments at NHS England’s board meeting last week, where he said that the pay settlement is a ‘significant issue’.
He set out that NHS England was ‘funded for a maximum settlement of 3%’, but raised concerns about the implications of ‘inflation running high’.
Mr Kelly said NHS England is ‘supportive of the right settlement’ for its staff, especially in the ‘current context’ with ‘cost of living pressures’.
But he added: ‘Nonetheless, if it’s higher than the 3% and if we are living within the money we would currently have, that would entail very real decisions for us about what we would stop.
‘Every percentage point that is over the 3% costs the NHS somewhere between £900m and a billion pounds.’
He told the board that NHS England has already ‘emptied the coffers’ to ‘fund big inflationary pressures’ and faced ‘a cut to the original NHS settlement’ to fund ‘other pressures’ such as Covid testing.
He said: ‘We have, so to speak, emptied the coffers, we’ve already had to reduce the investment we are making into some of our programmes by about £800m already.
‘So we would then be looking at having to cut back on investment in our major areas, when our major areas are primary care, cancer care or indeed, at the margin, some big capital investments – in fact, we were just talking about the diagnostic centres.’
He added that NHS England is facing a ‘very stretching position’ and that it is ‘not realistic’ to ask local commissioners to ‘just do more efficiency’.
He said: ‘We wait to see what the Government decision is. But as I said, a pay settlement higher than 3% and no extra money would entail some really difficult decisions.’
When approached by Pulse, an NHS England spokesperson said that Mr Kelly was referring to the impact on future investment.
Also speaking at the meeting, NHS England chief executive Amanda Pritchard told the board that a sufficient pay rise for NHS staff is ‘not just essential’ but ‘an operational necessity’ to retain staff.
She said: ‘It is not just essential that the work of frontline NHS staff tackling the pandemic [and] recovering services is properly recognised and rewarded, it is also an operational necessity.
‘If we are to retain the staff that we need to make further inroads into long waits [and] deal with all of the operational pressures we’ve just discussed, then we have to be really clear that the right pay for our staff is a critical component to it.’
She added that NHS England has to give ‘really clear advice’ to the Government on the issue and has a ‘duty to be clear about implications and consequences’.
An operational report presented to the board said health systems were already finding savings of more than £5.5bn but against a backdrop of a real-terms cut in funding of 1.8%.
Any further ‘savings or efficiencies’ in response to pressures around pay, inflation or new demands on the service are ‘not credible’, the report concluded.
It reiterated that the NHS was funded for a 3% pay settlement this year, but there have been suggestions the pay review body could award a 4% rise.
Even a 1% increase on top of the planned 3% would need to be absorbed through ‘cuts’ to services such as planned elective care or a reduction in ‘investment to improve services’ such as IT or in ‘capital to maintain essential services’, unless additional funding was made available, the report warned.
Setting out the pay review’s remit in December, it had also said ‘affordability’ for practices must be taken into account when recommending a salaried GP pay rise.
GP partners remain excluded from the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) recommendations due to the five-year contract currently in place.
Meanwhile, the Office for National Statistics (ONS) this week said that a ‘large rise in GP appointments’ was a main contributor to UK economic growth in May.
This story first appeared on our sister title, Pulse.