Summer Budget 2015

Pound sign

09 / 7 / 2015 10.39am

Dear Colleague,

The Chancellor of the Exchequer has just finished presenting his Budget statement and I thought that you would find it useful to have a quick summary of the key NHS and workforce announcements, which you can share with your board and colleagues.

I also want to take this opportunity to give you a further update on our work to raise and resolve the issues that so many have been experiencing around international recruitment and Tier 2 immigration.



The main Budget announcement for the NHS was a commitment to fully funding the Five Year Forward View through a further £8 billion by 2020, on top of the £2 billion already committed last autumn.

While we welcome this commitment and confirmation of additional funding for the NHS, it came alongside an announcement of continued public sector pay restraint of 1 per cent per year for the next four years.

Patients and employers want to see improved and better seven-day services.  We have stressed the importance of the workforce and pay and contract reform required to support this, as well as wider service improvement, especially for our medical staff. 

In continuing with the work to reform terms and conditions of service in and across the NHS, we now look forward to the publication of the pay review bodies' reports. Following publication we will be urgently seeking to speak with our trade unions, to ensure we continue to work in partnership to progress pay reforms and service improvement across the NHS.  The reports should be published within the next ten days, though there remains a small possibility of delay until after the summer recess.

Our discussions with trade union colleagues will now need to be set against the context of today’s announcement of continued public sector pay restraint.  I recognise that these discussions are therefore now likely to be much more difficult, especially for our non-medical trade unions and their members.

Other key announcements in today’s statement.

  • A new national living wage of £9 per hour by 2020, starting in April 2016 at £7.20.
  • Income tax allowance threshold raised to £11,000 next year and to £43,000 for higher rate tax.
  • 3 million more apprenticeships to be created, with an apprenticeship levy placed on large firms. We are investigating what this will mean for the NHS.
  • Pensions annual allowance tapered to a minimum of £10,000.
  • Green Paper published on proposals for changes to pension saving system.
  • Further powers around public services devolved to Greater Manchester, including children’s services. Similar plans in discussion for Sheffield, Liverpool and West Yorkshire.
  • Youth obligation for 18 to 21 year olds to ‘earn or learn’. Automatic entitlement to housing benefits abolished for this age group.
  • Household benefits cap reduces to £23,000 for London and to £20,000 for the rest of the country.
  • Free childcare up to 30 hours per week for three and four-year-olds from September 2017.
  • Tax credits and Universal Credits limited to two children for new claimants from April 2017.
  • Working age benefits frozen for four years, maternity and other statutory pay is excluded from the freeze.

You may also be interested to hear from Rob Webster, chief executive of the NHS Confederation, who provided his own expectations of the Budget earlier this week in a blog for HSJ.

International recruitment and Tier 2 immigration

We have now provided a response to the Migratory Advisory Committee (MAC) quick call for evidence on the impact of increasing the minimum salary thresholds to be eligible to submit an application for a tier 2 certificate of sponsorship.

Our response is based on what you told us and includes feedback you kindly sent following my last email on this subject. It stresses the importance of ensuring that the minimum salary can be met by the NHS (and other care providers) and, crucially, recommends that a mechanism should be developed for awarding additional points based on the level of skill required of healthcare professionals. Such a mechanism will reduce the risk of eligible applications being rejected at the certificate of sponsorship stage.

Last Friday, the MAC published a call for evidence on the broader review of Tier 2, which closes in September. They have been asked to provide a report and advice to the Home Secretary in December. We will continue our dialogue with you and the leaders of the national bodies across the health system to ensure that a coherent collective position is presented, articulating the role, importance and impact of overseas recruitment in the NHS.  I am clear of the immediate importance of this issue to your efforts to safely and efficiently staff your clinical teams.

You can download our full response to MAC from the latest news section of our website and please keep me updated if you have continuing issues with, or feel we could do more to support you in, this area.

Staff experience

The links between healthy workplace, engaged staff and better patient care was demonstrated earlier this week, when I attended the Patient Safety Congress and Awards. I presented Mersey Care Trust with the Changing Culture award, which NHS Employers supported, and another 16 teams were recognised for their initiatives that have improved quality and made patient care safer. 

The best places to work in the NHS were also announced at the congress and I had the opportunity to congratulate the organisations represented and reflect on the great work they are doing. The list, compiled by the HSJ and Nursing Times and supported by NHS Employers, recognises  a range of NHS organisations who are working ensure a positive workplace experience for their people.

Autumn Summit

Finally, a reminder to save the date for our Autumn Summit, which will take place on 13 October in central London. We are currently finalising the details of the day and further details will be released shortly, but my intention is that it will provide us with a rare opportunity to plan and discuss workforce challenges and strategies in the longer term.

With best wishes

Danny Mortimer
Chief Executive


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