Two million public sector workers are set to be given above-inflation pay rises as Theresa May's final act as PM - but the money will have to come from existing budgets.
Next week, the Treasury will unveil the biggest public sector pay rise for six years, at an estimated cost of £2 billion benefiting numerous professions including police officers, soldiers and teachers.
But no new money is expected to be made available to pay for the pledge with Whitehall departments likely to be told to find the cash from their existing funding, according to reports.
The reported rise comes amid concerns that the private sector is pushing ahead on salaries.
Police officers will receive a 2.5 per cent pay rise across the board under Treasury plans due to be announced next week
Teachers are expected to see their pay increase by 2.75 per cent under the plans
Police officers will receive a 2.5 per cent pay rise across the board, soldiers 2.9 per cent and teachers and other school staff 2.75 per cent, The Times said.
Dentists and consultants will get 2.5 per cent and senior civil servants 2 per cent, it said.
However, the Treasury is expected to make clear that, with the exception of some extra funding for schools, there will be no new money and the rises will have to come from existing budgets.
The move will likely represent one of Mrs May’s last acts as prime minister after she said last year that austerity had come to an end.
For most public sector workers their pay increase will be higher than the 2 per cent rate of inflation.
There will be a rise of 2.5 per cent for police from September. There will also be a 2.5 per cent rise for all members of the armed forces. The salary for the lowest-paid army privates will go up from £19,025 to £20,000.
Mrs May has made clear that pay increases for soldiers and other forces personnel are the ‘right priority’ given their ‘vital importance’ and ‘hard work and self- sacrifice’ in protecting Britain.
There will also be a 2.75 per cent increase for teachers across all pay ranges and allowances. The rises will still be based on individual performance.
Public sector pay rises were capped at 1 per cent under David Cameron between 2013 and 2016. Mrs May continued with the cap until last year.
The rises, which will reportedly be announced next week, do not apply to other public sector staff, such as more junior civil servants and nurses, whose pay is dealt with separately.
The pay rise for public sector workers is likely to be Theresa May's (pictured yesterday) final act as PM
Jonathan Cribb, a senior research economist at the Institute for Fiscal Studies, told the paper: ‘These public sector pay rises are higher than last year’s and considerably higher than the 1 per cent for many years before that.
‘It is the highest nominal pay increase since the coalition. But these increases are still slower than pay rises that are happening on average in the private sector. With the partial exception of schools, there seems to be no new money to fund these pay rises, meaning savings will have to be made elsewhere.’ The health secretary, Matt Hancock, who is an ally of Mr Johnson, said this month that the likely winner would ‘show some love’ to public sector workers to ‘properly reward’ them for the job they were doing.
‘It’s very important when you’re in charge of a great public service...you’ve got to make sure that you understand their cares and their needs. And the only way to get the reform that you sometimes need in public services is to be their champion.’