The chancellor has confirmed that millions of public sector workers will get a pay rise this year, following recommendations from the independent pay review bodies.
Most NHS workers, teachers and members of the armed forces will receive above-inflation pay rises of 5.5% to 6%, Rachel Reeves announced yesterday as she presented an audit of government finances to the House of Commons.
Police officers’ pay will increase by 4.75% across all ranks, despite calls from the National Police Chiefs’ Council for a 6% increase.
Civil servants will receive a pay rise of around 5% this year, according to the latest 2024-25 pay remit guidance issued by the Cabinet Office yesterday. The FDA union said that the government had also accepted the recommendation of a 5% pay rise for senior civil servants.
Reeves’ announcements followed confirmation that the government had offered a 22% pay deal to junior doctors in England, which is now being put out for consideration to British Medical Association (BMA) members.
The BMA also confirmed that the government had accepted a recommendation from the Review Body on Doctors’ and Dentists’ Remuneration that will see doctors and dentists receive a 6% uplift.
The Treasury said the pay increases will cost an extra £9.4 billion compared to what the previous government had set aside for pay increases. Reeves accused the Conservative government of providing “no guidance on what could or could not be afforded by pay review bodies”.
She added that she would reform the timetable for responding to pay bodies’ recommendations.
She said the new government had inherited a £22bn overspend which would need to be reduced by £5.5bn this year and more than £8bn next year.
Reeves added that she would need to make “difficult decisions” on tax at the next budget, which will take place on 30 October.
Short-term cuts will be made across a number of areas, including scrapping Winter Fuel Payments for around 10 million pensioners, and scrapping the cap on how much people in England pay for social care.
Shadow chancellor Jeremy Hunt said the spending audit was a “shameless attempt” to lay the ground for tax rises.
Calum Macleod, national secretary of the Police Federation, said: “While we don’t believe that one group of public sector workers should be set against another, the pay review body recommendation shows that they do not understand policing and its needs.
“Poor pay and morale means police officers aren’t staying in the force and we are losing valuable experience from the service.”
Dr Vishal Sharma, chair of the BMA consultants committee, said the 6% rise for doctors was “a start on the path to restore pay”, he said there was “still a long way to go before the real-terms pay cuts over the last 15 years are fully reversed”.
Dr Katie Bramall-Stainer, BMA GP committee in England chair, echoed these sentiments: “Today’s announcement is a step in the right direction, but practice funding today even with this uplift, is not even close to what it was even five years ago.”
She said the uplift of 4.1% today (1.9% was awarded to GPs via core practice contracts in April) would mean many practices would struggle to stay open.
“An underfunded contract has consequences for running costs, wider staff salaries and the ability to hire additional unemployed GPs to deliver more appointments. Without adequate funding, this will mean that some surgeries will have to close,” she added.
Jack Worth, school workforce lead at the National Foundation for Educational Research, welcomed the 5.5% pay award as a “necessary first step” in addressing recruitment and retention issues in teaching.
“Crucially, the Secretary of State has confirmed this will be a fully funded pay award,” he said.
“We support and echo the [review body’s] conclusions that the deterioration in teachers’ pay competitiveness compared to other professions needs addressing, that this pay award represents good value for money for taxpayers and that the DfE should begin work on a strategic and transparent workforce plan for the teaching profession immediately.”
Bee Boileau, research economist at the Institute for Fiscal Studies, said above-inflation pay awards for the public sector “should not have been a complete surprise”.
“They were always likely to exceed the 2% rate of inflation, given ongoing concerns about recruitment and retention,” she said. “Crucially, public sector pay rises are a permanent change in spending. We can expect these to pass through into future years, and add to the challenge at the Spending Review.”
