Keir Starmer has warned unions not to expect to get their way on demands for above-inflation public sector pay rises this year.
Speaking at the Nato summit yesterday, the prime minister was asked if he would agree to calls for above-inflation pay increases across the public sector and “give the unions what they want”.
He said: “No. Obviously, there are a number of pay settlements to be gone through on the annual basis. But the finances are in a very poor state, I think that is obvious. And that’s why we’ve been careful in what we said going into the election, and we’ll be careful what we say coming out of it.”
In response, civil service unions have warned that the government needs to address decades of real-terms pay decline and the broken pay system in the civil service.
FDA general secretary Dave Penman told CSW: “While last year's hard won pay deal went some way to alleviate the immediate cost of living pressures, it could not make up for the decade-and-a-half of pay restraint civil servants have faced. The civil service pay system is broken and it's clear a longer-term strategy to tackle structural issues is essential. Obviously, any new government will have to balance priorities but I hope they'll listen to the concerns of their civil servants.
"Any offer in the civil service needs to keep pace with the rest of the public sector and reflect that the cost-of-living pressures experienced by public servants through the spike in inflation are still very real. The new government also needs to signal that it understands that reform is urgently needed and commit to engage with us to start that work urgently.”
Officials below the senior civil service last year received an average pay increase of 4.5-5% plus a one-off payment of £1,500, while the SCS got an average 5.5-6.5% uptick. But the Institute for Government has estimated that real-terms pay has fallen by 12% to 26%, depending on grade, in the last 14 years. Officials in the Department for Energy, Security and Net Zero warned earlier this week that they are ready to strike if the "longstanding degradation of civil servant pay and conditions" is not prioritised.
Mike Clancy, general secretary of fellow civil service union Prospect, told CSW the union is “ready to engage on the civil service pay remit guidance, and our wider agenda of valuing expert advice and specialists who are key to delivering the PM’s missions”.
“We rapidly need to know what plans the government has for the civil service operating model and what that means for staff," he added. "This is in the context of a broken pay system and the need to set a positive direction to address the drop in the real terms value of civil service pay.”
Clancy has this week written to Starmer and ministers in his cabinet, seeking meetings and setting out the key areas that Prospect hopes to work with the government on.
The letter says: “We are aligned with many of the promises you made during the campaign and, of course, share common values regarding the workplace. Working with you, we are confident that your government can deliver on the fundamental changes that are needed for working people right across the country.”
It also praises his comments on public service and restoring trust in his first speech as PM.
“We commend your words on the steps of Downing Street about restoring service and respect to politics,” the letter says. “The civil servants that Prospect represents stand ready to deliver without fear or favour in the national interest, based on robust evidence. But in return they deserve your support to defend the principles of impartiality and integrity.”
The union also welcomed Labour’s plan to create a new “modern industrial strategy”.
“Prospect has been advocating for modern industrial strategy for over a decade, building on the UK’s strengths in science, nuclear, defence, tech and creative industries where Prospect’s members deliver,” the union’s letter said. “We know that effective industrial strategy needs a credible people and skills strategy, and we offer our expertise on how this can be delivered.”
Chancellor Rachel Reeves said on Monday that the key aim of the government’s new industrial strategy would be to “create good work and drive investment in all of our communities”.
Prospect has also written to several secretaries of state and ministers “with the aim of building partnerships across government to create a positive difference for our members”.
It has sent letters to: defence secretary John Healey; energy security and net zero secretary Ed Miliband; science, innovation and technology secretary Peter Kyle; minister for the Cabinet Office Nick Thomas-Symonds; minister for women and equalities Anneliese Dodds; prisons minister James Timpson; and culture secretary Lisa Nandy.