The Prime Minister and Chancellor are considering a deal to end the wave of public sector strikes, according to reports.
Rishi Sunak and Jeremy Hunt are looking at giving workers a lump sum by backdating next year’s pay rise, the Financial Times reported on Tuesday.
The lump sum would take effect from April, probably to the start of January 2023, according to insiders, although no final decisions have been made.
The largest industrial action in decades is taking place across the UK as workers in the public and private sectors demand higher pay amid the cost of living crisis.
Health secretary Steve Barclay last month suggested a backdated pay award for NHS staff in England but it was never formally offered to unions.
But insiders told the Financial Times that the strategy is now being discussed.
Whitehall departments were due to submit papers on what they could afford to eight public sector pay review bodies, covering sectors including the NHS, armed forces, police and prison staff, by early February.
Ben Zaranko, economist at think tank Institute for Fiscal Studies told the FT that departments might say they are unable to afford more than a three percent pay rise from April, which could fuel further protests.
Because of this, papers have not yet been published.
Public sector pay awards for 2022-23 were around five percent. Inflation stood at 10.5 percent in December.
Although Mr Hunt gave more money to the health and education departments in his Autumn Statement last November, he told ministers that they will have to fund any pay rises from their existing budgets, the FT reports.
He and the Prime Minister are considering backdating the April pay award, thereby addressing, in part, demands by unions that they want ministers to reopen the 2022-23 wage deal.
Hundreds of thousands of workers across multiple sectors have voted to go on strike in coming months, including rail workers, university staff, teachers, Royal Mail workers and civil servants.
About 100,000 civil servants are set to strike on the day the chancellor unveils the spring Budget, the Public and Commercial Services (PCS) union has said.
Ambulance workers will stage another walkout on Monday February 20 and March 6 and 20.
Meanwhile teachers in England and Wales will go on strike on a further six days across February and March.
After initially rejecting a five per cent pay offer, Fire Brigades Union (FBU) members supported walkouts with 88 per cent of the vote on a 73 per cent turnout.
