Money for NHS pay rises will have to come from existing health budget, says No 10

Downing Street has warned health ministers they will have to find savings from their own budget if they want to offer NHS workers more money in an effort to end the growing wave of strikes.

No 10 said there would be no increase in the health department’s budget as ministers look for a way to resolve the protracted industrial dispute.

The warning came after the Guardian reported Steve Barclay, the health secretary, had privately conceded he would have to increase the pay offer to NHS staff to get an agreement with health unions. Unions and government officials said this week’s talks were much more positive than those held last year, sparking hope that a resolution can soon be found.

A Downing Street spokesperson said on Friday: “We’ve been clear from the outset that departments have received their funding allocations and it remains the case that pay disputes and pay rises would have to come out of those allocations.”

Speaking to the BBC’s Good Morning Scotland programme, the prime minister Rishi Sunak defended the existing NHS budget. “There is record funding already going into the NHS … in spite of the difficult decisions we have had to make to get a grip of borrowing and tackle inflation.”

Sunak also said he was willing to look at the UK’s system for granting visas to health and social care workers to make sure it was working efficiently. But he would not say that Brexit had added to the staffing pressures facing the health service.

Barclay had acknowledged that more than 1 million frontline staff deserved more money, despite previously insisting the government could not afford to go beyond the existing £1,400 award for 2022-23. The health department said it “did not recognise” the characterisation of Barclay’s position, but did not deny it.

Government sources said, however, that the chancellor, Jeremy Hunt, has ruled out using central government funds for any increased pay offer, and instead has told Barclay to find an estimated £2-3bn from his department’s own budget.

Whitehall officials said there are no current talks about cutting NHS services to fund higher pay for workers. But a Treasury source added that Barclay would have to agree a figure with unions first, and then decide how it is going to be funded.

The government does not have any further talks scheduled with health unions, although one union official said they expected some would take place before Wednesday’s second round of strikes by nurses.

Unions and government sources however all agree that progress is being made.

Downing Street said there had been “positive soundings” coming from those talks. A union official added: “When we met last month, Barclay completely refused to talk about pay. But this week’s talks were all about pay. That is a big, tangible shift.”


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