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12 months ahead of the general election campaign how should we understand the politics of NHS pay?

Filed Under (Election campaign, Health Policy, Jeremy Hunt) by Paul on 17-03-2014

Last Thursday the Secretary of State made an important announcement about NHS pay which was met with a lot of anger from NHS staff and their organisations. What is interesting is not just the announcement per se but the way that the Secretary of State chose to publicise it.

Those who felt that the way in which it was announced was deliberately designed to cause a row are almost certainly right.

Given that everyone in the NHS was either getting an increment or, if they were at the top of the scale with no more increments, getting a 1% pay rise this could have been delivered with a fanfare along the lines of “Good news everyone’s pay is going up!”.  We could have had a few paragraphs promoting that message and then something about how it’s not as much as he would have liked because of the financial crisis.

But no, that is not what was said. Instead an acutely PR conscious Secretary of State decided that a good story about everyone getting a pay rise should be turned into the bad story that a consolidated pay rise of 1% would be impossible because it was unaffordable. He headlined the curbs rather than the pay rise,

“The Pay Review Body proposals suggest a pay rise that would risk reductions in front line staff that could lead to unsafe patient care” .

This will save £200 million a year. (Remember that figure)

So why spin a story saying this is bad news when it could be spun as good news?

Because we are but 12 months away from the start of the next general election campaign. A campaign that will, so far as the government is concerned, be fought on the economic competence of the Labour Party.

So what has NHS staff pay got to do with that?

If the Labour Party say that they will implement the pay review body recommendations, it will cost £200 million. They might seek to justify this in two ways that could play into the government’s plan to attack their economic competence.

First a naïve Labour front bencher might say that this is a punitive attack upon nurses and that after all it will only cost £200 million out of an NHS budget of £110 billion. A rounding error and not a big sum of money.

How might a government spokesperson respond to someone falling into trap number 1?

“Only an economically incompetent Labour Party would say that £200 million is a small sum of money. Any responsible political party would recognise that this represents the pay of an extra 4000 nurses, not a rounding error. This shows how once again the Labour Party cannot be trusted with your money.”

A second naïve approach would be for a Labour front bencher to say they would find the £200 million from inside the NHS.

How might our spokesperson respond to that?

“The Labour Party thinks it can simply conjure money out of thin air. It can’t. NHS money is being spent on patient care. What we need to know from the Labour Party is where it will cut NHS services to find this money? Until it does we believe this could be your local hospital.”    

This Government will be looking for lots of small examples of how the economic arguments of the Labour Party don’t add up.

The politics of NHS pay is just another one.

Over the next year most announcements will need to be viewed through the lens of the election campaign in order to be understood.

But let’s return to the £200 million that Jeremy Hunt says is essential for front line services.

On the same day as the pay announcement another was made with far less fanfare. This was that government departments would make a much greater contribution to pensions for staff and that money would not be spent by the Treasury.

Next Wednesday, when George Osborne announces his budget, much will be made of a £1 billion infrastructure fund that the Treasury will pledge to spend on small infrastructure projects.

This £1 billion has been obtained by taking money from departments to pay for pensions that in the past were paid by the Treasury.

So Jeremy Hunt has agreed to give the Treasury £125 million a year that will now come out of his budget from 2015/6 onwards.

Surely, just as with the £200 million not being spent on pay rises, this £125 million can only be found by cutting front line services?

Odd that we’ve heard nothing about any cuts that might be needed to plug this £125 million gap.

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