IHPN has written to the Secretary of State for Health and Social Care, along with NHS Providers, NHS Confederation, Social Enterprise UK, and the Local Government Association, calling on the government to ensure that additional funding is provided to ensure health and care staff across the sector receive equal pay, or risk damaging front line services.

The intervention comes against a backdrop of confusion and uncertainty about how additional costs of the Agenda for Change pay deal will be met.

The acceptance of the Agenda for Change (AfC) pay deal by the NHS staff council is welcome, but there is now significant uncertainty for many providers as there is no funding for them to cover the increased cost from their budgets. Many staff employed outside of the NHS have contracts which commit them to having AfC pay rates matched.

If unaddressed, an inequitable, two-tier system will be inadvertently created, impacting staff and creating significant risks and concerns about services.

The organisations whose staff are affected include local authorities, charities, social enterprises, community interest companies providing key community, mental health and social care services, nursing and care homes, primary care organisations and independent health care providers, delivering key community services.

The joint letter calls on the government to ensure that additional funding is available to all providers to cover the shortfall.

We’re warning that without extra money, many non-statutory providers will struggle to cover the increased costs and retain the staff needed to sustain a diverse range of critical services, with patients ultimately paying the price.

Our chief executive, David Hare, said: “A huge number of organisations, of all types, care for NHS patients up and down the country every day. Unfortunately, some of these providers; particularly those delivering Local Authority-commissioned services; may miss out on funding for the recently announced staff pay award.

“This is an opportunity for the government to show the tens of thousands of hard-working staff impacted that they are valued, by ensuring the money is in place for fair and equal pay, to safeguard vital frontline NHS services.”

Matthew Taylor, chief executive of the NHS Confederation, said: “While the 2023 pay uplift has been welcomed and may with help with retention issues, it must be fully funded for all staff, not just those employed directly by the NHS.

“The current arrangement for central funding might see staff at these services miss out and risks the creation of an unequitable, two-tier system for different staff. Providers are currently facing the unenviable choice between finding additional savings – likely through cuts to services – to fund the rise, or not implement the raise and risk staff leaving, leaving patients worse off.”

Miriam Deakin, director of policy and strategy at NHS Providers, said: “Trusts will welcome the fact that all trust staff on Agenda for Change will receive a boost to their pay.

“But questions remain about how the increase will be funded for staff employed by NHS trusts working for services commissioned by local authorities such as public health and children’s services. Trusts say they may have to pull out of key contracts or stop investing to improve services if the uplift isn’t funded nationally. This also means a lack of parity for voluntary and social enterprise sector providers in the community often delivering vital NHS services.”

Peter Holbrook CBE, chief executive of Social Enterprise UK, said: “Social enterprises are a crucial part of the NHS family, delivering over a billion pounds of services and employing many thousands of staff while reinvesting any profits in communities. Health Secretary Steve Barclay recently said that he would implement the NHS pay deal for all staff on Agenda for Change – but he has yet to come up with the money, putting these organisations and their staff in an impossible position.

“We still expect the Department to take urgent steps to solve this – as they did previously in 2018 – before staff, services and patients are adversely affected. Just the ten largest social enterprises delivering NHS services employ around 10,000 staff, who will be treated unfairly unless the Government acts now. Some of these employers will seek to pay the 22/23 ‘bonus’ their staff deserve, even if the Government doesn’t fund it – but some simply don’t have the money to do so, meaning this will put services and patients at risk. The Department must deliver on the Health Secretary’s words.”