Steve Barclay ordered existing budgets cut to fund pay rise for NHS workers

Steve Barclay has been ordered to make cuts to fund a pay rise for NHS workers amid a row over where the money should come from.

The Health Secretary has to find an additional £4billion within existing budgets to fund a new salary offer for nurses, ambulances and physiotherapists.

Treasury can step in with fresh funding if cost cutting and redirecting existing spending isn’t enough to meet the number.

Downing Street confirmed yesterday that the new supply will require an additional £2.7bn for this year (2022-23) and £1.3bn for next (2023-24).

However, ministers stress that frontline services must be excluded from any cost-cutting measures.

The Health Secretary has to find an additional £4billion within existing budgets to fund a new salary offer for nurses, ambulances and physiotherapists

It is understood Mr Barclay believes money is still being wasted on unnecessary NHS red tape and more can be cut to free up funds.

It may also be the case that in certain areas, such as funding or research, there are pots of money that have been underspent.

There was confusion yesterday as to where the money for the new offering would come from.

The GMB union, which represents ambulance workers, said it had been assured during the talks that it would not come from the Department of Health’s existing budget and that new money would be provided by the Treasury.

Rachel Harrison, the GMB’s national secretary, told the BBC’s Today program that union negotiators were reassured that funding for the 5 per cent pay rise for 2023-24 would not come from the existing healthcare budget.

She said it was a condition of the GMB and some other unions.

She said: “We wanted reassurance that this is extra money and will not come from current NHS budgets and that was the promise the Government gave us.

Rachel Harrison, the GMB’s national secretary, told the BBC’s Today program that union negotiators were reassured that funding for the 5 per cent pay rise for 2023-24 would not come from the existing healthcare budget

“We were told that this would be extra money and not coming from existing healthcare budgets.”

But when Deputy Prime Minister Dominic Raab was asked to confirm this in his interview, he declined, suggesting it would come from existing budgets.

When asked if the health department would get any new money, he said: “I think the expectation will be that the budget is set, it provides enough resources..”

A spokesman for Number 10 said talks were ongoing about where the money would come from.

They said: “The Secretary of State has said we will investigate areas of underspending and take these things up with the Treasury in the usual way.

“As you would expect, the Treasury and Health Departments will now work together to resolve any new funding requirements in the usual way, but we have made it clear that this will not impact frontline services.”

They added: “That [money] will not come from point-of-care services… We are committed to ensuring that this does not impact front-line services or the quality of patient care.’

When asked to confirm this in his interview, Deputy Prime Minister Dominic Raab declined, suggesting it would come from existing budgets

On Thursday, Mr Barclay said: “We are very confident that this will not stem from patient-centric concerns.

“Of course we will look at areas of underspending and administrative savings and discuss this with the Treasury in the usual way.”

Funding for a 3.5 percent pay rise next year is already included in the Ministry of Health’s existing budget.

Health unions have agreed to call off the strikes and elect members on the new offer.

Ministers hope it will be accepted and end strikes that have led to the cancellation of more than 140,000 surgeries and appointments.

If the offer is accepted, the one million workers on the 2023/24 Agenda for Change contract will receive a 5 percent pay rise, plus an additional payment on top of the lowest wage to align with the national living wage.

Each worker would also receive a retrospective unconsolidated payment of 2 per cent for 2022/23 and a ‘Covid recovery bonus’ averaging 4 per cent.

This means staff would receive a one-off payment of between £1,655 and £3,789 on top of the consolidated £1,400 pay rise already in place for 2022/23.

The new offer also includes midwives and porters, but not resident doctors, who have a different contract and staged a three-day strike this week to secure a 35 percent pay rise.

Downing Street yesterday urged them to end strikes and enter wage negotiations like nurses, ambulances and physiotherapists.