Rishi Sunak will likely announce on Thursday that he supports a pay increase of approximately 6 percent for the public sector in 2023-24. However, this is only after the Whitehall budgets have been restructured to make significant savings.
Prime Minister said that any wage increases for this year must be responsibly funded and cannot be financed by additional government borrowing. He also insisted that such an action would “fuel inflation” and make it continue for longer.
Sunak, the minister for Public Sector, will meet Jeremy Hunt on Thursday, amid expectations that they will agree to pay awards of around 6 percent this year, as proposed by independent review agencies, for workers in the public sector.
Insiders in the government were insistent that the pay scale for next year must be tighter.
One senior government official said, “It is easiest to just get it done.” We will need to be clear about this at the beginning of next year. “Next year, things will be much tighter.”
Sunak is grappling with the largest series of strikes by the public sector in decades. Teachers, civil servants and NHS workers are all demanding higher wages amid the cost-of-living crisis.
Junior physicians who are members the British Medical Association start a five-day strike Thursday. The teaching unions are conducting strike ballots which could lead to widespread school closures in the fall.
Sunak’s advisers said that no decision would be made on the public sector pay until after the meeting between Hunt and the prime minister. Hunt has been negotiating with Whitehall ministers over the last few days about how to save money.
A person with knowledge of the negotiations said that ministers were told to make savings between £2bn to £3bn. The talks will continue on Wednesday. Sunak will review his work when he returns from the Nato summit at Vilnius.
Treasury is pressuring ministers to delay capital expenditure programmes and in some cases increase fees for public services, so that pay increases can be afforded with lower borrowing.
After Sunak approves the plan, the ministers will release the independent review bodies’ reports on Thursday and endorse their recommendations, in the hope that the awards are generous enough to prevent further strike action.
The reviews will cover the police, who should be recommended to receive a top award of around 7 percent, as well as doctors, dentists and prison officers. They also include senior public officials, military personnel, and members of the armed forces.
NHS staff including ambulance crews and nurses have already been given a 5% wage increase in 2023-24 along with an one-off payment.
Sunak and Hunt insist that departmental budget cuts must be made to close the funding gap left by the government’s proposed pay increase of 3.5 percent for review bodies.
Sunak said in Vilnius: “We will be guided by two principles. Sunak, speaking in Vilnius, said: “We’ll be guided by a couple of principles.
Responsibility will also be a guide. We all know the economic situation we are in, and we must make government decisions responsibly, especially when it comes to borrowing less. This will help us to avoid fueling inflation and making it last longer.
The consumer price index currently stands at 8.7%, but Sunak is hoping that this will drop to around 5% by the end year.
Paul Johnson, the director of Institute for Fiscal Studies (a think tank), said that departmental savings of £3bn are “not huge” but also added: “When saving have been restricted for a long period of time, it will become difficult.”
Sunak said that he did not endorse the findings of the review bodies for political reasons, but also economic ones. The independent panels consider issues such as recruitment and retention within the public service.
Sunak hosted a hog-roast for Tory MPs on Wednesday night in his garden at Downing Street as he sought to boost party morale before three by-elections scheduled for next week.
A Tory official stated that the outlook for Uxbridge, in Greater London; Selby and Ainsty, in Yorkshire; and Somerton and Frome, in Somerset is bleak. The official added, “We are going to lose horribly.”