Chart of the week: Real-terms NHS staff pay from 2010 to 2020

Each week we present analysis of data in chart form to illustrate some key issues and invite discussion. Following recent government proposals to offer a 1% pay rise to most NHS staff following a year unlike almost any other for health professionals, Mark Dayan looks at real-terms pay for different NHS staff groups over the past decade. How are different staff groups faring?

Data story

Published: 07/04/2021

NHS staff pay in England has been a bitterly contested issue so far this year. The UK government has proposed a 1% pay rise for most health service workers, saying that this is all it can afford: those who represent staff have tended to see this as bordering on insulting following a year of extraordinary and at times dangerous efforts. In the search for some objective context, there is a lot of interest in how NHS staff are paid compared to in the past and compared to their peers in the private sector. This updated chart accounts for the year of the pandemic itself, and breaks down findings across different groups.

In real terms, adjusted for inflation, average NHS pay remains below where it was in 2010. For most groups, this drop happened largely during the period of public sector austerity up to about 2017, with some recovery after that. Nurses, for example, reached a low point of a 9% real-terms drop in pay from 2010 to 2017: their average pay now is around 5% less than a decade ago.

The period of recovery lines up fairly well with the period covered by the 2018 pay deal for staff on 'Agenda for Change' contracts – nearly all workers except doctors and senior managers. However, across this decade as a whole, workers in the general private economy have done considerably better, with their salaries starting to recover much sooner. This may in part explain why some NHS staff feel they are not doing well financially compared to friends or family.

2020 itself saw significant NHS pay rises, around 2% for nurses above inflation. Perhaps surprisingly, wages in the private sector jumped upwards by even more.

Both of these, however, should be understood as partly due to an unusually low year for inflation, which came in at well below 1%. Given the extraordinary things happening in the economy at the time, this may be a figure to take with a pinch of salt. In actual cash terms, average nurse pay rose by about 3% in both 2019 and 2020.

In general, lower paid NHS workers have fared better across the board. “Support” workers who care for patients but are not professionally qualified, and nurses just starting out on the lowest pay band, are paid on average only 2% less than in 2010. Doctors are 7% down over the decade, with nurses, as we have seen, in the middle. The pattern is the same within the profession as well: 'Foundation Year 1' doctors fresh from university are being paid only 6% less, but consultants, on six figure salaries at the top of the profession, are 11% down on their pay 10 years ago.

So where does this leave the debate over NHS pay this year? The government can correctly say that real wages have been rising since the 2018 pay deal, and that the lower paid have been protected. But no doubt many staff will be unhappy that real wages seem consistently below 2010 levels and behind the private sector – and their representatives at the bargaining table will be reflecting that the pay deal that promoted recovery is precisely what is about to come to an end.

NHS staff pay and the cost of living 2010-2020 06/04/2021

Chart

Note:  

Based on consumer price index (CPI).

Source:  

Nuffield Trust analysis of NHS Digital, ONS CPI data and Labour Force Survey data.

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Notes

This chart covers staff working for NHS trusts and commissioners in England, with data from NHS Digital. The inflation data is taken from the Office for National Statistics’ Consumer Price Index, and private sector data from their Labour Force Survey. To eliminate any effect from more or less part time working, or pay being recategorised as bonuses or core salary, the total average earnings per full time worker has been used.

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