Downing Street said on Thursday that a 3% salary increase for health workers would be paid within the NHS budget.
This confirmation may trigger new debates about interest rate hikes.
No10 insists that the money will not be misappropriated from funds that are “designated” for the front lines of the NHS.
However, where funding can be found in the NHS budget, this revelation is still open.
The Prime Minister’s official spokesperson said: “The salary increase will be funded by the NHS budget.
“But we are very clear that it will not affect the funds that have been allocated to the NHS frontline.
“We provided a historic solution for the NHS in 2018, and by 2023/24, its budget increased by 33.9 billion pounds…We provided 92 billion pounds to support the NHS and social care through the pandemic.”
If wage settlement is not funded by NHS front-line expenditures, where will it come from, he added: “It will provide funding within that budget, but it will not prevent any funds that have been earmarked for front-line funding from occurring.”
The head of the health department warned on Thursday that the NHS is “impossible” to cover the planned 3% salary increase for its employees from its budget.
However, nurses and unions stated that this was not enough and threatened to strike after making an offer to NHS staff in England and Wales.
There is still a major question about where the funds come from. Some people suggest that funds can be raised by increasing national insurance to cover the cost of social care reform.
The chief executive of NHS Employers, an organization that supports NHS leaders, said that health services cannot use “efficiency” to fund salary increases.
Danny Mortimer told BBC Radio 4’s Today program: “The key question is: Will the government properly fund this salary award?
“We cannot assume that the NHS will increase efficiency, reduce the number of employees, or reduce the services it provides to pay the compensation incentives.
“We can’t encounter a situation where certain parts of the NHS, especially the services that provide professional public health services, are not paid like my members who provide services in the hospital.”
Former NHS Trust Chairman Roy Lilley told Talk Radio: “The NHS only has a budget until September, because there is no expenditure review. The NHS does not know how much it will get after September, so it does not know how it will pay for this fee.”
He added: “If it’s 3%, then you might see about 2 billion pounds. It’s impossible for the NHS to find 2 billion pounds to cover this cost.”
A report on Thursday said the additional funding may come from an increase in national insurance designed to pay for social care reforms.
When asked if there will be tax increases to fund salary increases, Secretary of Commerce Kwasi Kwarteng told BBC Breakfast: “I don’t think this is because if the economy continues to perform strongly, if it can grow, our tax revenue will grow. There is no tax rate. So, it means we can buy more.”
When asked about the source of the money, Mr. Kwarteng replied: “I will not write down future budgets on July 22.”
