Public servants could be in for an above-inflation pay rise, after Rachel Reeves acknowledged there is a “cost to not settling” pay cases at a level people can live with.
In her first interview from No.11 Downing Street, the chancellor said “people won’t have to wait long” to find out how pay for public servants will be adjusted.
Speaking to the BBC’s Sunday with Laura Kuenssberg, Reeves said: "I really value public service workers in our schools, in our hospitals, in our police as well.”
"There is a cost to not settling: a cost of further industrial action, and a cost in terms of the challenge we face recruiting, retaining doctors and nurses and teachers as well," she added.
But she also stressed that her spending rules will be "non-negotiable", adding: “We'll do it in a proper way, make sure that the sums add up.”
She said ministers are in the process of examining recommendations from pay review bodies and “doing the analysis”.
Last week, The Times reported that independent pay review bodies for teachers and some NHS workers had recommended both receive a 5.5% pay increase.
In her interview, Reeves took aim at former education secretary Gillian Keegan, who she said "had the pay review body recommendation for teachers on her desk when she was in office".
“She didn’t do anything about it. She didn’t publish it. She didn’t say how she was going to respond to it. They called an election. They didn’t make the tough decisions. They ran away from them,” she said.
The Senior Salaries Review Body, which makes recommendations on pay for senior civil servants, typically publishes its findings in spring.
There is no independent pay review body for rank-and-file civil servants. Most years, the Cabinet Office and Treasury publish pay remit guidance setting out the parameters for departmental pay rises ahead of the SSRB report.
But in May, CSW revealed that the Cabinet Office had opted to delay the guidance in a bid to more “closely align” decisions about pay for the civil service with the rest of the public sector.
Civil service pay rises have typically been lower than those in other public services in recent years. Last year, the SSRB called for a 5.5% pay rise in 2023-24, plus a 1% increase to the overall paybill to be “targeted at those who are delivering in role” – outstripping the 4.5-5% increase set out for most sub-SCS staff three months earlier.
Internal documents seen by CSW note: “When the government accepted the pay review recommendations for other workforces in July, including for the senior civil service, the award for delegated grades announced [in] April [2023] proved to be out of kilter with those for the wider public sector workforces, including the SCS.”
'Not helpful to pre-empt the process'
Appearing on Sky’s Trevor Philips on Sunday yesterday, exchequer secretary to the Treasury James Murray would not give further details on the government’s plan for public sector pay, saying only that Reeves would “set out our response in the context of the public finances and the public spending inheritance that we have in government”.
“I think what’s not helpful for me to do for any worker in the public sector is for me to pre-empt the process that we are going through right now,” he said.
Reeves's comments come shortly after the prime minister, Keir Starmer, played down the prospect of inflation-busting public sector pay rises.
Asked at this month's Nato summit 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.”