Lifting the cap: The fiscal and economic impact of lifting the NHS pay cap

Article

Workers in the NHS have experienced a seven-year pay squeeze, with a two year pay freeze from 2011/12, followed by pay capped at 1 per cent for the following five years. This has significantly eroded the value of pay in the NHS; pay for a band 5 nurse is £3,214 or 10.1 per cent lower today than pay for the same role in 2010/11.

In this briefing, we examine the fiscal and economic impact of two alternative scenarios for NHS pay over the next two years; increasing pay in line with Consumer Price Index (CPI) inflation, and a ‘catch-up’ rate of increasing NHS pay in line with private sector earnings plus 1 per cent.

Related items

  1. A person sits at a desk in front of a laptop. A semi-transparent screen shows a digital AI agent

    Strike while AI is hot: Rebuilding worker power for the age of AI

    How worker power should be reanimated in the face of AI-driven labour market shocks.
  2. The exterior of the Ministry of Defence building

    The Europe agenda: Defence and security

    In this period of geopolitical chaos, greater defence and security integration offer a fruitful way for the UK to deepen its relationship with Europe.
  3. Rear view of unrecognizable people walking together on the street

    A tough hand: Why rising youth inactivity demands urgent action

    On Thursday, new data will likely show the number of young people who will be out of education, employment or training (NEET) will surpass 1 million for the first time since 2013.