Will Nurses Be Better Or Worse Off With A 1% Pay Rise?

"even a 12.5% increase in pay still wouldn’t allow Nurses in many parts of the UK to purchase even a modest home"

What does the phrase 'Real Terms' mean and does a 1% pay rise mean Nurses are getting an above-inflation increase or not?

The government’s announcement of a proposed 1% pay rise for Nurses has been heavily criticised. And it isn’t hard to see why, given that some unions have suggested a 12.5% pay rise would be more appropriate.

Here’s what we do know about Nursing pay as it currently stands.

However, the entire debate about the pay rise is often being oversimplified and misunderstood, because of the issue of ‘real terms’.

Some argue 1% represents a real terms increase; others think it represents a real terms decrease.

But what does real terms actually mean?

And how important are cost of living variations in this debate?

Up Or Down?

Real terms is a phrase that helps to clarify the real value of the wages we earn.

In the context of Nurses’ wages, it takes into account how a Nurse’s costs influence the real value of earnings.

And here’s where the confusion begins.

Those who argue that a 1% increase represents a real terms increase refer to the fact that the current rate of inflation is 0.9%.

In their minds the calculation is simple: 1% is an above-inflation rise, and therefore a real terms increase.

Those who argue that a 1% increase means a real terms drop in pay look beyond current inflation.

They refer to issues like Brexit, and the inevitable post-pandemic slump.

Cost of living will likely go up as taxes and different costs rise – and so a 1% pay rise looks insufficient.

But in many ways, neither of these arguments are especially helpful.

And that’s because, as has been proved by a recent report, cost of living isn’t a consistent and easily measurable metric.

It varies enormously from one region to the next.

Nursing Salaries Fail To Compensate For Regional Variation

A study by the institute for Fiscal Studies assessed how regional variations in living costs impact Nurses.

Worryingly, it found that a higher cost of living leads to an increased exit rate from the NHS.

And it found that living costs vary enormously across the UK.

One of its main proof points was that the average house price across the UK ranges from 2.5 times to 14 times nursing salaries.

Put simply, an NHS Nurse can live comfortably on a starting salary in some regions, while in others even an above-average salary simply isn’t good enough.

Importantly, the report also noted that although trusts have some freedom to top up salaries in reaction to these variations, that flexibility simply didn’t go far enough.

Cost Of Living Variation Must Enter The Wage Debate

What’s clear from this report is that even a 12.5% increase in pay still wouldn’t allow nurses in many parts of the UK to purchase even a modest home.

The Agenda for Change banding system has many merits.

But it’s inflexibility – or at least, the lack of flexibility for individual trusts – is a real problem.

The pay rise debate will rage on.

But the issue of living cost variations in relation to nursing pay must not be ignored – or it will continue to undermine whatever changes occur.