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The Progressive Policy Think Tank

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

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.