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UK public sector workers should not expect their wages to rise next year at the pace seen in 2023, ministers warned on Wednesday, prompting a backlash from unions who had called for reform of the pay-setting process.
Ministers told independent pay review bodies their next wage recommendations for the public sector should account for “the historic nature of the 2023-24 awards and the government’s affordability position”.
The warning, in letters setting the PRB’s remit for 2024-25, comes after a year that has seen the biggest wave of public sector strike action in decades and record pay increases for workers from the NHS to the military.
Each year, PRBs covering 2.5mn workers set out their recommendations on the wages that public sector employers need to pay to be able to recruit and retain staff in a competitive labour market.
Unions have long complained that the independence of PRBs is compromised because their remit is set by government, with affordability specified as one of the key criteria.
Education secretary Gillian Keegan on Wednesday told the School Teachers’ Review Body that last year’s pay awards reflected “the extraordinary macroeconomic context”.
She added in a letter setting the panel’s 2024-25 remit that accepting its recommendations in 2023, without increasing government borrowing, had required “tough decisions”.
Her wording was echoed in letters sent by ministers to the bodies advising on pay for NHS staff, doctors and dentists, senior civil servants and members of the armed forces.
In recent months, public sector wage growth has caught up with the private sector, as the latest pay deals take effect while the wider jobs market has slowed.
But doctors, nurses, teachers and many other state employees have still lost ground compared to their private sector counterparts since 2010 as the government has squeezed public sector spending.
The remit letters were published on the first day of a three-day walkout by junior doctors, who are battling for a pay rise of some 35 per cent in a dispute that has led to months of disruption to the NHS.
Ministers said they would set out the government’s position on affordability further in written evidence to the PRBs once the process was under way. But the letters are a clear signal that the government is likely to impose tight constraints on the independent bodies.
Once the government sets the remit, the bodies take evidence from unions and employers, and receive the government’s formal pay offer before making a recommendation. Ministers often accept the verdict of their respective PRBs but are not required to.
Last year, unions representing NHS staff boycotted the PRB process, insisting instead on direct talks with NHS employers and government that eventually resulted in a deal to end strikes.
Rachel Harrison, national secretary of the GMB, the union that represents ambulance workers and other NHS staff, said on Wednesday that “significant reforms” were needed before it would re-engage.
“It’s farcical to pretend the PRB is properly independent when its hands are tied so tightly by the department,” she said.
Unison, the biggest NHS union, said the government had sent the remit letter too late for NHS staff to receive a pay increase on time next April and it had failed in its commitment to reform the pay-setting process.
“Falling back on the same discredited system won’t give staff confidence that ministers are taking any of the huge problems affecting the NHS seriously,” said Helga Pile, Unison’s acting head of health, calling on health secretary Victoria Atkins to hold direct talks early in the new year instead.
Patrick Roach, general secretary of the NASUWT teaching union, said the education secretary’s remit letter had emerged only after NASUWT lodged a formal dispute over delays and said the school teachers’ PRB should be allowed to “do its job, free from any interference”.
