NHS: Employers' Contributions and Minimum Wage
The question
To ask the Secretary of State for Health and Social Care, what estimate his Department has made of the potential impact of changes to (a) the minimum wage and (b) employer's National Insurance contributions at the Autumn Budget 2024 on NHS wage costs.
Answered by Karin Smyth
We have taken necessary decisions to fix the foundations in the public finances at Autumn Budget 2024, which enabled the Spending Review settlement of a £22.6 billion increase in resource spending for the Department from 2023/24 outturn to 2025/26.
The Employer National Insurance rise will be implemented from April 2025. The Government will provide support for departments and other public sector employers for additional Employer National Insurance contributions costs only, and the level of funding will be confirmed at main estimates shortly.
As the 2025/26 pay round will not have concluded by 1 April 2025, it will be necessary to implement an increase to Agenda for Change (AfC) entry pay from 1 April 2025 to maintain compliance with the National Minimum Wage. This will be an advance payment of the 2025/26 pay recommendations, and the final pay award will be given following the conclusion of the Pay Review Body process.
This advance will apply to approximately 250,000 AfC staff across band 1 (closed grade), both pay points in band 2 and the entry point of band 3 to ensure National Health Service pay sits above the National Living Wage. These pay points will receive an advance pay uplift of 28p per hour, representing a temporary 2.3% pay uplift.
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