First Minister Nicola Sturgeon has announced that the Scottish Government will provide all health and social care workers in Scotland with a one-off £500 bonus for “their extraordinary service” during the Covid-19 epidemic.
Following the announcement at the SNP 2020 conference, the Scottish Conservative party circulated a graphic on social media that suggested that the payment was a consequence of decisions taken by the UK government and the Chancellor, Rishi Sunak, in particular.
The Conservative Party claims generated thousands of social media engagements within hours of publication on 1 December.
Ferret Fact Service looked at the claim and found it False.
The Scottish Government’s one-off £500 bonus will be paid pro-rata to all NHS and social care workers employed since 17 March this year.
Health policy is devolved to the Scottish Parliament and this includes the pay of health and social care workers.
This means that the Scottish Government is responsible for deciding how to allocate the additional funding received from the UK government as a consequence of additional spending undertaken in the rest of the UK in this policy area.
It also means that the Scottish Government may choose to adopt spending policies that diverge from those pursued in other parts of the UK.
The Scottish Conservatives claimed that this was thanks to the Chancellor Rishi Sunak, and spending by the UK government.
This is misleading, as devolution means that decisions over health spending are taken by the Scottish Government.
The financial toll of Covid-19
Public spending throughout the UK has increased in order to manage the impact of the Covid-19 pandemic on the economy and public services.
Even prior to the pandemic, the UK government spent more that it raised in taxes and other income. Therefore, the significant increase in public spending related to Covid-19 has largely been supported by an increase in borrowing by the UK government.
The latest estimate from the Office for National Statistics (ONS) shows that public sector net debt excluding public sector banks rose by £276.3bn in the first seven months of the financial year to reach £2,076.8bn at the end of October 2020.
This, the ONS notes, means that the ratio of debt to GDP ratio is around 100.8 per cent GDP – a level last seen in the early 1960s.
The increase in UK-wide public spending has led to an increase in the Scottish Government budget through the Barnett formula.
A Freedom of Information release in November 2020 from the Scottish Government confirmed that it expects to be allocated an additional £8.2bn from the UK government through this mechanism.
The Scottish Government will also be allocated a share of the costs of servicing the interest on the UK national debt in due course when the next Government Expenditure and Revenue Scotland (GERS) figures are calculated.
The cost of managing the Covid-19 pandemic led to the UK government announcing a plan to freeze public sector pay in England for the 2021/22 financial year. This does not include some lower paid and more than one million NHS workers, who will receive a pay increase during this period.
To date, only the Scottish Government has announced that it will provide a £500 bonus payment to health and social care workers. It is estimated that this will cost approximately £180m from this year’s Scottish Government budget.
How much will NHS workers receive?
Scottish health and social care workers are unlikely to receive the whole £500 bonus as it is likely that a proportion of the bonus will be taxed.
The Fraser of Allander institute estimates that a Scottish full-time health worker paying the basic rate of income tax, would take home around £340 of the £500 bonus after tax and National Insurance contributions.
For this worker, the institute calculates that £100 of income tax would ultimately return back to the Scottish Government budget in 2023/24 as this tax is devolved, while £60 of National Insurance contributions would go to the UK government.
Ferret Fact Service Verdict: False
The suggestion that Scottish health and social care workers have Rishi Sunak to thank for the £500 bonus payment is misleading. Decisions on health and social work pay in Scotland are taken by the Scottish Government, and this payment was not a UK government spending decision. A similar payment for health workers in England has not been proposed.
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In response to an evidence request, the Scottish Conservatives said the money for NHS staff “is entirely possible thanks to extra UK Government funding” via Barnett consequentials, and that the UK government is providing £9.5bn for the Scottish Government spend tackling Covid-19.