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NHS clinicians’ pay is frozen for two years as government strives to reduce deficit

BMJ 2010; 340 doi: https://doi.org/10.1136/bmj.c3390 (Published 23 June 2010) Cite this as: BMJ 2010;340:c3390
  1. Adrian O’Dowd
  1. 1London

    The pay of most NHS staff will be frozen for the next two years, it has been announced in the government’s emergency budget on Tuesday 22 June.

    Chancellor George Osborne, in what he called a “progressive budget” that was “tough but fair,” said that public sector workers had to play their part in tackling the £155bn (€190bn; $230bn) deficit in the United Kingdom.

    Mr Osborne, who has pledged to balance the nation’s books by 2015, said, “I know there are many dedicated public sector workers who work very hard and did not cause this recession, but they must share the burden as we pay to clean it up.

    “The truth is the country was living beyond its means when the recession came, and if we don’t tackle pay and pensions more jobs will be lost. That is why the government is asking the public sector to accept a two year pay freeze.”

    Mr Osborne said that he would protect the lowest paid and pledged that the 1.7 million public sector workers who earned less than £21 000—about 28% of the public sector workforce—would receive an annual flat pay rise of £250 for each of the next two years.

    The budget also revealed that public service pensions would rise in line with consumer prices (prices of all consumer goods and services) rather than the higher retail price index, with the intention to save more than £6bn a year by the end of the parliament.

    Mr Osborne also said that a medical assessment would be applied to new and existing claimants of the disability living allowance from 2013. The cost of paying this allowance was currently more than £11bn a year, he said, making it one of the largest items of government spending.

    The cost of living will rise under the budget plans, as Mr Osborne also announced that value added tax (VAT) would rise from 17.5% to 20% on 4 January next year.

    Everyone, said Mr Osborne, would be expected to contribute to reducing the deficit, but he added: “Everyone will share in the rewards when we succeed.”

    The NHS survived the worst of the public spending cuts announced on 24 May, designed to save around £6.2bn in the current financial year.

    This week’s budget means a further £17bn worth of cuts in departmental spending by 2014-15, but the Department of Health is protected from this.

    The BMA’s chairman, Hamish Meldrum, said: “Doctors understand that these are difficult times, and we accept the need to be reasonable and responsible about future pay rises.

    “However, we are seriously concerned that the chancellor has overridden the whole negotiation process between the BMA and the independent review body and imposed a two year pay freeze for the majority of public sector workers.

    “The public sector did not cause the financial crisis and should not be singled out as the main vehicle for dealing with it.”

    It is unclear whether the freeze on pay affects GPs’ salaries.

    More details of further spending decisions will be made later in the year when the government unveils its spending review on 20 October.

    Notes

    Cite this as: BMJ 2010;340:c3390

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