Wednesday 1 July 2009

Is Lansley telling porkie pies?

It has become the done thing for Conservative-leaning bloggers to accuse Labour ministers of lying recently. But they seem a lot more reluctant to hold their own side to the same standard.

In the midst of dealing with his latest gaffe (in this case meaning making an apparent spending commitment without clearing it with Osborne first) he said this, quoted by Sky News:
"The Health Service Journal have got this 180 degres wrong. The problem in recent years has been that staff pay has simply increased in line with the huge rises in the NHS budget."
This rang alarm bells with me, I started in the NHS in the last full year of Tory rule (1996/97) and pay certainly hasn't doubled in real terms since then. So I've done some digging:

Total NHS Budget in 1996/97 £31.5 billion
Total NHS Budget in 2009/10 £103.4 billion (England £86.4b (pdf document), Scotland £11.0b, Wales est £4.0b, Northern Ireland est £2.0b)
% increase in NHS Budget 228%

Now, I can't find any pay scales for 1996/97, but I do remember my beginning salary as a Management Accounts Assistant (bottom point, Admin and Clerical Grade 4) that was £10,076 per annum. So a 228% pay hike would mean that if Lansley is right, that same post should be starting at £33,049. Unfortunately for the Man Accs Assistants working in my office, that's not the starting salary. The current starting salary for Agenda for Change Band 4 (which is what they get graded as now) is £17,732 pretty much half of what Lansley has claimed.

I'm going to be more charitable than the comrades in the blogger's union. Never attribute to conspiracy what you can charge to cock-up. In this case, I must conclude that Lansley simply doesn't know what he's talking about.


David Crookes said...

You're perhaps not measuring the package well enough.

A package is, salary + pension.

What is the 1996 S + P for your starting role. What is the present S + P, under current known actuarial expectations for future costs, then deflating back to 1996 £

I am not an actuary, but I have read actuarial reports stating that some present NHS pensions (e.g. nurses) are equivalent to 30% tax free contribution rates on those salaries.

Also, the average public sector salary (S) has now matched the private sector salary from that last data I saw.

To contrast, in private industry, it's rare to see employer contributions above 10%, and Gorgon taxes the investment's dividend returns. Furthermore, private sector people commonly have to assume the investment failure risk, and actually do their own investment assessment (e.g. selecting funds/asset classes etc.). How much does that "cost" c.f. NHS pensions, who will get all that paid for.

I'm not saying NHS employees don't deserve these things, it's a contract, we can all choose NHS versus private. But your post selectively compares only part of the package in 1996 with now, which might just not reflect the full accounting.

Finally, two data points an argument makes not :-). Really you need to dig out NHS accounts and see if salary costs are split off, take 2002->2009 (which is what I suspect the period Lansley is referring to) and see if the salary costs have increased at the same rate as the funding increases. My memory of newspaper articles suggests this is what would be the case, but I could be mis-remembering.

Matt Wardman said...

Does Lansley mean "salary costs" not "salary levels". A single salary comparison is not meaningful as there has been a major increase in staff.

From March this year:

"After a dip in overall numbers in the previous two years, the annual census showed staffing levels recovered to reach a peak of 1,368,200 in September 2008.

The figure is a 2.8 per cent increase on the previous year and a 27.7 per cent increase compared to 1998. The census covers hospital, community, general and personal medical services. It shows that in September 2008 the NHS employed:"

The one group that perhaps have had an increase of 228% or more may be GPs,bearing in mind the 50% hike in roughly 2004-6.

General incomes are up by around 60-65%% since 1998 in real terms.