Chancellor Rachel Reeves announced yesterday that millions of public sector workers, including teachers, NHS staff and prison workers, will receive significant pay rises.
Reeves, speaking in the House of Commons, said she would fully accept the recommendations from independent pay review bodies (PRBs) on how much wages should increase.
According to the Government, a hike in public sector pay will cost over £9 billion this year, and departments will need to make savings elsewhere to facilitate the rise.
Reeves accused the Conservative Government of providing "no guidance on what could or could not be afforded by pay review bodies".
She said she would reform the timetable to respond to pay bodies' recommendations.
In a statement read out to the Commons, Reeves told MPs: "This is the right decision for the people who work in and, most importantly, the people who use our public services, giving hardworking staff the pay rises they deserve while ensuring that we can recruit and retain the people we need."
While private sector pay has risen by 4 per cent since 2010 when adjusted for inflation, public sector wages are 2.5 per cent lower.
Unions have repeatedly warned that public sector pay has been squeezed since 2010, which they say is exacerbating staffing issues in schools, hospitals and other vital services.
NHS Staff
Junior doctors have been locked in a dispute over their pay for 20 months, taking part in 11 walkouts as talks with the previous Government stalled.
Last week, in a significant breakthrough, the Government announced they had struck a deal with junior doctors - a 22 per cent pay rise over two years.
Specifically, medics in training would see an increase of 4.05 per cent for 2023-24, alongside an existing rise of 8.8 and 10 per cent.
They would also get a further pay rise of 6 per cent for 2024-25, topped up by a consolidated £1,000 payment. This is equivalent to a pay rise of over 8 per cent.
Other NHS staff would receive a 5.5 per cent pay hike.
The BMA, whose members will now vote on whether to accept the offer, says the overall package represents around a rise of 22.3 per cent on average.
They 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.
Dr Vishal Sharma, chair of the BMA consultants committee, said the 6 per cent rise for doctors was "a start on the path to restoring pay", but there was "still a long way to go before the real-term pay cuts over the last 15 years are fully reversed".
Teachers
Education Secretary Bridget Phillipson said she will accept a 5.5 per cent pay rise recommendation.
Former Education Secretary Gillian Keegan reportedly had the proposals before the General Election but had yet to decide on their implementation.
According to the Department for Education, the average teacher's salary is £43,801.
Following the accepted pay uplift would mean a £2,409 pay bump to £46,210. Graduate salaries were raised to £30,000 in last year's pay round, which would rise by £1,650 to £31,650.
The Institute for Fiscal Studies (IFS) said the average teacher's pay was 9 per cent lower in September 2023 than in 2010.
Jack Worth, school workforce lead at the National Foundation for Educational Research, welcomed the 5.5 per cent 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."
Prison and Police Officers
Justice Secretary Shabana Mahmood announced a 5 per cent base pay increase for all prison staff and a pay award of 6 per cent for all judicial office holders - both of these will be backdated to April 2024.
Home Secretary Yvette Cooper said her department will accept the recommendation for a consolidated increase of 4.75 per cent to all police officer ranks from September 1 2024.
Police officer pay also varies across the country and depending on seniority.
However, 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 mean police officers aren't staying in the force, and we are losing valuable experience from the service."
Civil Servants
Officials were given a slightly lower pay hike than other parts of the public sector last year. Civil servants were handed a 4.5 per cent rise, which was boosted to 5 per cent for the lowest paid - along with a £1,500 cost-of-living payment to end industrial action.
The Cabinet Office has confirmed it will accept the pay body's recommendation that all senior civil service members receive a 5 per cent consolidated increase to base pay, backdated to April 1, 2024. It also confirmed that "delegated grades" below the senior level will receive an average 5 per cent pay award.
Armed Forces
Defence Secretary John Healey announced that this year's award will provide recruits with a targeted and significant pay uplift and a headline increase of 6 per cent.
All senior military members (two-star rank and above) will receive a 5 per cent consolidated increase in base pay.
In a statement, he stated that accepting these recommendations represents an annual increase of around £2,800 in the nominal 'average' salary in the Armed Forces and a yearly increase of £1,880 in the starting salary for an officer.
Reeves added that she would need to make "difficult decisions" on tax at the next budget, which will take place on October 30.
Short-term cuts will be made across several areas, including scrapping Winter Fuel Payments for around 10 million pensioners and 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.
