To be frank, I don’t have a strong view on what nurses should be paid, though I probably wouldn’t begrudge them a bigger increase than 1%. Instead, this blog seeks to draw attention to some of the pitfalls in how others are presenting their case.
For a start, it seems odd to make up your mind on whether a 1% rise is a fair offer without knowing what nurses are paid in the first place. A few facts…
First, NHS nurses are already paid more, on average, than people working in the rest of the economy (about £34,000, compared to average private sector earnings of about £30,000). And while many nurses earn a lot less than the ‘average’, that’s true in other jobs as well.
Second, the starting salary for a newly-qualified nurse (just under £25,000) is similar to the starting salary for graduates in other professions. (The Institute of Student Employers has suggested that the average for all grads could be as high as £30,000, but that figure is skewed upwards by a few large employers especially in law and finance; £25,000 is probably more realistic for most graduates.)
Third, nurses are coming to the end of a three-year pay deal, agreed in 2018. This has already increased their pay by a minimum of 6.5% and, in some cases, by significantly more, especially at the lower end of the scale (‘band 5’).
Of course, it’s perfectly reasonable to argue that nurses should be paid more than other people. But the key point here is that they already are. And it is surely harder to argue that paying NHS staff more will boost overall spending in the economy if NHS staff are already better off than those who might be picking up the bill.
There are also some wildly inaccurate claims about what has happened to NHS pay in real terms (that is, adjusted for increases in consumer prices). These include claims that nurses and doctors earn 30% less now than they did in 2010.
It is true that nurses earn about 3% less now in real terms (not 30%) than they did in 2010, but only if you compare the basic pay of a newly-qualified nurse who started in 2020 with the pay of a newly-qualified nurse who started in 2010.
Crucially, this does not mean that a nurse who joined the NHS in 2010 would now be earning 3% less in real terms than when they started – not least because they would have progressed up the pay scales in the meantime.
Similarly (and I’m quoting Full Fact here), ‘between 2019/20 and 2020/21 nurses in band 5 would have seen their salary increase by between 3% and 12% through a combination of the amount you could earn at band 5 being increased, and their own progression through the band after gaining another year of experience’.
On recruitment and retention, the Royal College of Nurses is obviously right to fight their corner (“large numbers of nurses could leave NHS in wake of pay row, union warns”). But it would still be good to hear more about the other side, such as how the pandemic has led to a surge in applications for nursing courses. (It will, of course, take several years for any new students to qualify and start work. Nonetheless, the fact that so many more have decided to join the profession despite Covid – or even because of it – also suggests that fewer nurses are likely to leave in the meantime.)
On vacancies, it is true that a relatively large number of permanent positions in the NHS are unfilled. This seems like good evidence of recruitment problems. But it would be misleading to claim (as some do) that high vacancy rates mean an increased workload for other nurses or doctors. In practice, the vast majority of these vacancies are filled by temporary staff.
It is only fair too to compare NHS pay with what is happening in the rest of the economy, where many people have suffered pay cuts and job losses. (Remember the many millions on furlough may not count as ‘unemployed’, but are still typically earning 20% less than when they were working normally.) This is relevant because it is presumably easier to recruit and retain staff in the NHS if alternative occupations are less attractive.
Some have also seized on the recent pay deal for staff at HMRC, worth 13% over three years, as evidence of double standards. One tweet making this point (rather more crudely) has so far received over 27,000 likes.
But in reality, people working for HMRC are the lowest paid in any government department. Indeed, the average earnings for all staff in HMRC are actually slightly lower than the starting salary for a newly-qualified NHS nurse.
What’s more, the HMRC pay rise was the first major increase in ages. It should therefore be compared to the three-year deal for nurses agreed in 2018, which also included substantial increases, rather than the additional 1% proposed for nurses now.
Again, I’m not arguing here that HMRC staff are under-paid relative to nurses. Instead, my point is to correct the lazy assumption that HMRC staff are ‘over-paid pen-pushers’, or that the government values them more than nurses.
There are many other variables that need to be taken into account as well, including other terms of employment (including allowances, pensions, and holidays), the degree of job security, and the availability of staff discounts.
It is hard to find accurate like-for-like comparisons here. Nonetheless, a recent ONS study found that the average public sector earnings premium (including pensions) was still 7% in 2019, even pre-Covid.
And if you really want to reward those frontline staff who have gone above and beyond during the pandemic, an across-the-board raise for everyone who happens to work in the NHS seems a poor way to go about it.
To wrap up, there are two ways that NHS pay could be set.
One is for the government of the day to decide the appropriate level of remuneration based on objective evidence and advice from an independent review body, taking account of factors such as trends in recruitment and retention, productivity, what’s happening elsewhere in the labour market, and how any increase might be financed.
The other is to encourage a political bidding war, driven by dodgy data, emotive headlines, social media campaigns, and snap polls which ask the opinion of poorly informed members of the public.
OK, I’m exaggerating here to make a point – but not a lot. People have been bombarded over the last few days with statistics with little or no context (and many of which are simply wrong). This is not how evidence-based decisions should be made.
Plain-speaking Economics 