Key issues
The NHS trade unions asked the Review Body for Nursing and Other Health Professions (NOHPRB) to take the issues of "low morale", "huge hikes in the cost of everyday living", and the "current chaotic state of the NHS" into account when making its recommendation about nurses’ pay in 2007/08.
In addition, the RCN asked the Review Body to award a "significantly above inflation uplift in pay" and related allowances to help restore nurses’ morale.
What the other parties want
NHS Employers, which represents NHS organisations, said in its evidence to the Review Body that next year's pay award for nurses, doctors, dentists, and other health care staff should not exceed the Government's inflation target.
The target is currently 2 per cent.
The Department of Health wants nurses and other health professionals to receive a pay rise of just 1.5 per cent next year - less than half the current rate of RPI inflation. It claims a higher award will lead to further job losses and cutbacks in care.
The RCN believes the Government is attempting to blackmail nurses and their colleagues into accepting a pay award of this size. By the Government's own admission, only a minority of NHS organisations are in deficit.
Nurses deserve a fair and decent pay award based on the economic reality of the day. The reality is that prices are rising and nurses cannot afford to live or support their families with an award that is below the level of inflation.
Inflation
The Retail Price Index (RPI), one of the measures of inflation, was 4.3 per cent in May 2007 (Office of National Statistics).
RPI is seen as a more accurate reflection of price rises because, unlike the Consumer Price Index (CPI), it includes housing costs such as mortgage interest payments and council tax.
Month CPI RPI *
April 2006 2.0 2.6
May 2006 2.2 3.0
June 2006 2.5 3.3
July 2006 2.4 3.3
August 2006 2.5 3.4
September 2006 2.4 3.6
October 2006 2.4 3.7
November 2006 2.7 3.9
December 2006 3.0 4.4
January 2007 2.7 4.2
February 2007 2.8 4.6
March 2007 3.1 4.8
April 2007 2.8 4.5
May 2007 2.5 4.3
* includes mortgage interest payments and council tax
Examples of rising costs this year
Council tax
Halifax calculates that the average council tax bill in Great Britain has increased by 121 per cent since its introduction in April 1993. The average council tax per dwelling (exclusive of discounts and subsidies) is above £1,000 in England for the first time in 2005-06 at £1,009, an increase of 121 per cent since 1993-94 (£456). In Scotland the average council tax bill per dwelling in 2005/06 is £925, 101 per cent higher than in 1993/94 (£461). In Wales the average council tax bill is £790, 186 per cent higher than in 1993-94 (£276).
Rents
The most recent publicly available data for England on housing rents for 2004/05 showed increases of 3.2 per cent, 3.0 per cent and 3.4 per cent over the previous year for private, housing association and local authorities, respectively.
(Source: Department for Communities and Local Government, Housing Postcard June 2006, updated July 2006).
Travel
The AA Motoring Trust Fuel Price Report (August 2006) reported UK average unleaded prices rising 0.7p from the previous month to 98.2p per litre, compared to 91p in August 2005, a 7.9 per cent increase.
Underground and bus fares in London have also increased. The weekly bus pass rose by 3.7 per cent, to £14 from £13.50, and there will be pro-rata increases on monthly and annual passes. The one day bus pass is frozen at £3.50. However the cash fare rises by a third, from £1.50 to £2. On the tube, travelcards are subject to a rise of around RPI+2, although single fares on Oyster are frozen, as are cash fares outside zone 1, the cash fare in Zone 1 rises to £4
Utilities
According to simplyswitch.com (13 September 2006) domestic customers’ energy bills have increased massively over the last few months. Since January 2004, bills have gone up by an average of 78 per cent for gas and 51per cent for electricity.
Interest Rates
The Bank of England raised the interest rate by a quarter of a percentage point in May 2007 to 5.5%.
What the Review Body looks at
When making a recommendation about pay, the Review Body considers the:
- need to recruit, retain and motivate suitably able and qualified staff
- regional/local variations in labour markets and their effects on the recruitment and retention of staff
- government’s inflation target (which is currently 2 per cent)
- UK health departments output targets for the delivery of services
- funds available to the UK health departments as set out in the Government’s Departmental Expenditure Limits
- principle of equal pay for work of equal value in the NHS.
More information about the review body is available on the Office of Manpower Economics website.