Autumn Statement 2013

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05 / 12 / 2013 1.14pm

Despite continuing economic challenges the health budget has once again been protected.

In one of the Chancellor's key announcements, he said that the rise in the state pension age to 68 would be brought forward from 2040, to the mid-2030s. This would rise again to 69 in the late 2040s.

The NHS Working Longer Review was established as part of the NHS Pension Scheme final agreement and is currently considering the impact on staff, employers and patients of a raised pension age.  

Pay bill

The statement also included the introduction of  a pilot 'pay bill control' in a small number of Government organisations. This will involve setting a new financial control to keep the organisation’s pay bill within a pre-determined budget agreed with the Treasury. This new control will replace the 1 per cent cap on pay awards for the organisations involved in the pilot.

The Treasury will consider how continuing reform of public sector pay policy can best contribute to consolidation beyond 2015-16, including how to get the best value for money from the pay bill.

Other points of interest arising from the Autumn Statement for employers in the NHS include:

  • Growth forecast estimate increased to 1.4 per cent for 2013
  • Personal income tax allowance will rise to £10,000 from April 2014
  • Extra 20,000 apprenticeships being created, with Government funding for JobCentre Plus to support apprenticeships/traineeships
  • Extra 30,000 university places being created for next year
  • From April 2015 there will be a transferrable tax allowance for married couples of up to £1,000
  • Next year’s scheduled fuel duty rise has been cancelled
  • Employer National Insurance contributions will be removed for people under 21 from April 2015.

NHS Employers' response

Responding to the Autumn Statement, Dean Royles said:

“The health budget remains protected, which is good news, but it nevertheless continues to present an enormous efficiency challenge for the NHS.

"I'm keen to understand the potential implications for the Government's plan to pilot 'pay bill control' in a small number of government organisations, which will involve setting a new financial control to keep the organisation’s pay bill within a pre-determined budget agreed with the Treasury. This new control will replace the one per cent cap on pay awards for the organisations involved in the pilot. What we really need now is to agree how we can move out of a period of pay restraint in a sensible way.

"The continued funding settlement means an even greater imperative to conclude negotiations with consultants to help change the way we deliver services."

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