A row has broken out in government over whether doctors and nurses should be given above-inflation pay increases recommended by their independent pay review bodies.

The dispute is also holding up publication of pay awards for senior civil servants, judges, top armed forces ranks and prison officers.

The review bodies technically report to both the prime minister and the relevant secretary of state. On Thursday the health department said the pay recommendation was “still being discussed” with 10 Downing Street.

The objection to the pay proposal, however, is understood to have come from the Treasury, which recently calculated that British doctors and nurses were now among the world’s best paid.

The row comes as the health department battles to reduce a record NHS overspend this year, projected in January to reach £790m. An above-inflation rise would make clawing back the deficit next year even harder.

New contracts for doctors have come in well over budget and produced average increases of 30 to 40 per cent over the past three years. Pay for nurses and other NHS staff is also costing more.

Only US doctors are now better paid than British ones, according to the Treasury’s analysis, while only US and Australian nurses do better on average than their UK counterparts.

The health department and the Treasury have told the pay review bodies for doctors and nurses that headline increases “should be based on our 2 per cent inflation target”, with the unions arguing for a bigger rise.

NHS employers told the review body that a 2.5 per cent increase, broadly in line with inflation, is “the most that can be afforded”.

The precise nature of the dispute between ministers is unclear. However, Patricia Hewitt, the health secretary, is thought to be worried about the impact on morale and industrial relations if the government cuts the review body award.

Review body reports are usually published in February and the British Medical Association, the Royal College of Nursing and the public sector union Unison yesterday all complained about the delay.

A Treasury spokesman refused to comment, saying only that discussions were “ongoing and we do not provide a running commentary”.

But a date for publication of the awards for prison officers and top civil servants has been set twice and postponed.

Whitehall officials and unions say the problem appears to lie outside those areas. Awards for the armed forces and teachers have been published.

As more NHS trusts announced job cuts to balance the books, Beverley Malone, general secretary of the RCN, said the health department was “now dangerously close to losing nurses’ goodwill”.

Dr Paul Miller, chairman of the BMA consultants committee, said it was “unprecedented” for the awards, which take effect next month, to be delayed so long.

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