HCSA responds to 'emperor's new clothes' pay award

The government has today issued its response to the 2019-20 recommendations of the Review Body on Doctors and Dentists Remuneration.

As was the case last year, the government has partially accepted the DDRB recommendation, which was for 2.5 per cent for all hospital medical grades and 3.5 per cent for SAS doctors, and the value of CEAs, Distinction Awards, Discretionary Points, and flexible pay premia for Junior Doctors in England, to also increase by 2.5 per cent.

  • Consultants will receive a pay rise of 2.5 per cent. The value of CEAs will be frozen for the second year running.
  • Junior doctors will receive no additional basic pay rise on top of the 2 per cent already negotiated and agreed as part of a multi-year deal by the BMA.
  • SAS doctors will also receive a pay rise of 2.5 per cent, with “the potential” for an additional 1 per cent in 2020-21 contingent on agreeing a multiyear deal.

All awards will be backdated to April 2019.

In its submission, HCSA called upon the DDRB to be bold and to address a decade in real-terms pay decline, with a rise equivalent to RPI plus 1.9 per cent to address this historic erosion and in the wake of last year’s paltry award.

Depressingly, the DDRB states in its report: “The review body does not generally seek to undo past decision making and its focus is forward looking, rather than retrospectively tracking just inflation and earnings.”

We cannot accept the DDRB’s side-stepping position that the historic erosion of the real value of pay rates is not a relevant concern in a pay-setting process which is intended to maintain recruitment and morale.

We also maintain that its dogged adherence to the CPI measure of inflation as a benchmark for pay is inappropriate.

Benchmarked against CPI, the 2.5 per cent recommendation represents a slight real-terms rise in pay. But measuring against RPI, which includes housing costs and currently stands at 2.9 per cent, it is another cut. It is also well below current average earnings growth, something which the DDRB itself recognises.

We note signs that it shares the HCSA view that the government’s decision to impose a pay award last year below the DDRB recommendations and over only six months, effectively halving the headline figure, had a devastating impact and undermined its own status as a pay review body.

But while a slightly more robust change of tone towards government manipulation of its recommendations is welcome, the continued effectiveness of the DDRB as the primary pay-setting mechanism is not enhanced by this report and must remain in doubt.

Equally, though, we saw nothing today in the government’s announcement to ease our concerns that the new Junior Doctors contract – directly negotiated by the BMA without HCSA involvement – will tie those grades into years of real-terms pay stagnation.

For Consultants, the 2.5 per cent award must be placed in the context of a paltry 0.75 per cent offering last year – another real-terms cut – and the chaos being wrought across the grade by the current pensions system.

Due to the government’s refusal to reform the tax system, this is an exercise in giving with one hand and taking with the other. The government will undoubtedly end up clawing back even more from some Consultants than they give as a result of the impact of any “rise” in excess of CPI via the framework of triggers and thresholds.

HCSA maintains that failing to award a real-terms rise is no reply to this Catch-22, but clearly the situation whereby a pay rise will actually create an even greater disincentive to work for some doctors underlines the ludicrous nature of the system.

We again reiterate our call for Treasury reform and our view that tweaking the NHS scheme rules will not be enough to head off this growing crisis and a disastrous winter in our hospitals.

Responding to today’s announcement, HCSA President Dr Claudia Paoloni said: “This announcement is reminiscent of the emperor’s new clothes. While we may be told this is a great award which represents an end to a decade of real-terms pay decline as a last flourish of an outgoing prime minister, most doctors will be able to see the naked truth.

“This award falls far behind average earnings growth and again behind RPI, which is a far more meaningful measure of personal inflation than CPI.

“It does little to make up for last year’s slap in the face for the profession but still, coming amid the unravelling of services caused by the NHS pension crisis, many senior doctors will be nervously checking whether this pay award will push them over income thresholds to trigger a huge tax bill. This is a truly perverse situation.

“Nevertheless, pay is a crucial part of the longer-term landscape and the DDRB, by rejecting calls to acknowledge historic real-terms decline, makes itself part of the problem rather than the solution.

“For Junior Doctors this award underlines the HCSA’s concern that the recent four-year settlement will lock these grades into real-terms pay cuts.

“It seems the government has a similar plan for SAS grades in the immediate future, dangling the meagre carrot of a 1 per cent bonus at negotiators.

“While the DDRB has finally found its voice and correctly relayed professional dismay at the government’s pay offering in 2018-19, which was worse even than the DDRB’s below-inflation recommendation, those who wish to see a strong and relevant pay review body in future deliberations on hospital doctors’ pay will not be encouraged.”