Government departments have recommended a pay rise of 2.8% for next year for more than a million public sector workers.
The Department of Health said it had set aside 2.8% to fund recommendations for the NHS Pay Review Body and the Doctors’ and Dentists’ Remuneration Board remit groups.
“DHSC view this as a reasonable amount to have set aside based on the macroeconomic data and forecasts and taking into account the fiscal and labour market context,” the department said in written evidence to the NHS pay review body.
The Department for Education said a 2.8% pay rise for teachers next year would “maintain the competitiveness of teachers’ pay despite the challenging financial backdrop the Government is facing”.
In written evidence to the School Teachers’ Review Body, the department said: “The Department’s view is that a 2.8% teacher pay award would be appropriate for 2025/26.
“This level of award would maintain the competitiveness of teachers’ pay, despite the challenging financial backdrop the Government is facing.”
It would follow a 5.5% pay award for 2024/25 that has meant a combined increase of over 17% over the last three pay awards, the department said.
This pay proposal for 2025/26 could see that rise to over 21% in four years, it added.
The Cabinet Office also suggested pay increases for senior civil servants should be kept to no more than 2.8%.
In its evidence to the senior salaries review body, the Cabinet Office said the Office for Budget Responsibility expected average earnings growth across the economy to fall to 3% in 2025/26.
The Cabinet Office also noted that the Government brought forward the pay round this year “which makes it particularly important that pay review bodies consider forecasts for wage growth”.
“The Government has considered these factors whilst carefully evaluating the overall affordability position and recommends that awards for the SCS should be no higher than 2.8%,” the Cabinet Office submission said.
“HM Treasury has been clear that there will be no additional funding to departments for 2025/26 pay awards. The Cabinet Office will need to carefully consider the justification for any recommendation higher than 2.8%, and whether departments can make countervailing measures to meet the cost.”
Unison head of health Helga Pile said: “The Government has inherited a financial mess from its predecessors, but this is not what NHS workers wanted to hear.
“Staff are crucial in turning around the fortunes of the NHS. Improving performance is a key Government pledge, but the pay rise proposed is barely above the cost of living.”
Inflation is predicted to average 2.5% this year and 2.6% next year, according to forecasts from the Office of Budget Responsibility.
