As rising prices continue to erode living standards, the government has announced that millions of public sector workers will be given a pay rise, but not in tandem with inflation.
Workers affected include teachers, nurses, doctors, police officers and Armed Forces personnel.
Over a million NHS workers in England are to receive a pay rise of at least £1,400, with the lowest earners getting up to a 9.3 per cent increase in their wage. Eligible dentists and doctors are in line for a 4.5 per cent increase in wages.
Police in England and Wales will be given a five per cent overall salary increase, equating to a rise of around £1,900.
Home secretary Priti Patel said that the increase for police will be concentrated on those with the lowest incomes to provide them with a pay rise of up to 8.8 per cent, while those on the highest wages would receive increases closer to 1.8 per cent maximum.
Patel said: "It is right that we recognise the extraordinary work of our officers who day in, day out, work tirelessly to keep our streets, communities and country safe.”
From September, teachers will be given a pay rise between five per cent and 8.9 per cent.
Inflation in the UK currently stands at 9.1 per cent and is set to hit 11 per cent or even exceed that by the end of 2022.
The government has been cautious about increasing wages in line with inflation, out of fear of trapping the country in an inflationary spiral.
It said that it had accepted the conclusions of pay review bodies within the health service, police and NHS, with eligible dentists set to receive a 4.5 per cent increase in wages.
However, unions have been pushing for pay to match inflation despite the reservations of ministers.
Over 115,000 members of the Royal Mail workforce have already voted to strike over pay, while further unions continue to threaten to down tools.
Sharon Graham, general secretary of the Unite union, has criticised the government’s new measures and labelled them a “massive national paycut”.
Last year, NHS staff were given a pay rise of three per cent and the government temporarily froze salary hikes for public sector workers earning more than £24,000.
Health secretary Steve Barclay, said that the latest arrangements were indicative that the government wants a “fair deal for staff”, but warned that “high inflation-driven settlements would have a worse impact on pay packets in the long run than proportionate and balanced increases now.”
Barclay added that pay review bodies within public sector organisations were in full agreement with the government’s approach.
However, healthcare industry groups have warned that the NHS pay uplift needs to be properly accounted for.
Responding to the confirmed pay rise for NHS staff, Nigel Edwards, chief executive of the Nuffield Trust think tank, said: “If the pay award for NHS staff agreed by the government today is not fully funded, as the Treasury has strongly indicated, then the health service risks blowing its budget even further this year and finding itself in even deeper water financially.
“Even without finding additional cash for pay, the NHS was already staring down an impossible task of finding £5.5 billion worth of savings within its budget. It is pointless to pretend that these levels of efficiencies can be made in a year without detrimental effects such as possible cuts to staffing numbers.
“Before the cost-of-living crisis deepened, the NHS had only budgeted for a three per cent uplift across staff groups. Funding the shortfall would mean the NHS will need to find well over £1 billion to cover costs. This comes at a time when the NHS is already trying to do more. Dedicated Covid funding has been cut yet substantial costs dealing with the virus remain.
“Without increases to the budget to ease this pressure and fund the higher than anticipated pay rise, the government will have to realise there will be knock-on implications for how much resource the service can throw at tackling record waiting lists.”
Richard Murray, chief executive of the King’s Fund, added: “When NHS budgets were last set, they were built on the expectation that most staff would get a three per cent pay increase. Today, the government has set that increase at a significantly higher level, but at the same time told NHS leaders that they need to make up the difference from existing budgets.
“The NHS has previously said that every additional one per cent in the pay settlement would equate to £800 million to £1.2bn that needs to be cut from planned NHS spending. It will inevitably impact the health service’s ability to meet patients’ needs and makes it even harder to see how the NHS will be able to meet government targets to bring down waiting lists.
“If the government wants the NHS to fund this pay rise out of existing budgets, then government should also be clear with the public that NHS services will be cut as a result.”
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