NHS staff, police and teachers get told pay rise - but it will mean service cuts

13 July 2023 , 11:32

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Rishi Sunak had previously hinted he would overrule independent pay bodies (Image: PA)

Rishi Sunak has bowed to massive pressure over public sector pay, ruling that millions of NHS staff, police and teachers should get rises of 6% or more.

But departments have been told they will have to slash their budgets in order to fund the increases after ministers refused to release more cash. The PM was accused of "taking a wrecking ball to public services" and urged to "come clean" about the impact on hospitals.

Unions warn that public services will now have to choose between "paying workers a half-decent salary or cutting services in already underfunded public services".

At a press conference begging unions to call off strikes, Mr Sunak said Government departments "have had to find savings elsewhere" - but declined to name one example of a service that would be squeezed. He did, however, say schools would not be required to make savings after widespread fears were voiced about the impact on children.

The Prime Minister admitted that the cost of pay rises were "more than we'd budgeted".

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Moments earlier Tory John Glen, Chief Secretary to the Treasury, announced police would receive a 7% rise, while doctors would get 6% and a £1,250 bonus. Teachers will be given 6.5% and members of the armed forces will get 5% and a £1,000 bonus.

It comes as junior doctors walk out in the biggest strike in NHS history.

Warning that the Government wouldn't be swayed, Mr Sunak said: "Today's offer is final. There will be no more talks on pay. We will not negotiate again on this year's settlements and no amount of strikes will change our decision."

Teaching unions have announced planned strikes from September have been suspended. In a joint statement with the PM and Education Secretary Gillian Keegan, unions said the pay recommendations will "allow teachers and school leaders to call off strike action and resume normal relations with government".

Teacher strike action scheduled after the summer break has been suspended as members weigh up the offer.

Pressed on where the money would come from, Mr Sunak announced that visda and NHS charges for legal immigrants arriving in the UK would be ramped up.

Unite union general secretary Sharon Graham said: "By accepting the PRB (pay review body) recommendations and then not funding them, the Government is putting its departments between a rock and hard place.

"They now have to choose between paying workers a half-decent salary or cutting services in already underfunded public services.

"If the Government wanted to, it could well afford to pay public sector workers properly, while maintaining and indeed improving funding for schools and hospitals.

"It could start by looking at the money made by profiteering companies that have been driving up inflation."

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And Lib Dem leader Ed Davey called on the PM to clarify where the axe will fall in order to find the cash needed to fund the pay rises.

He said: “Rishi Sunak is taking a wrecking ball to our public services with these savage cuts. He must come clean about the devastating impact this will have on local hospitals and schools across the country.

“The public deserves answers about where these cuts will fall and how many more Conservative promises will end up on the scrap heap.

“This could lead to more children being taught in crumbling classrooms and more patients being treated in buildings at risk of collapse. It will make the recruitment and retention of nurses and teachers even more difficult and blows a hole in the Government’s NHS workforce plan.

Rishi Sunak was accused of taking a "wrecking ball" to public services

"The government doesn't need to borrow money to do this, they could raise money by reversing tax cuts for the banks, introducing a proper windfall tax or clamping down on tax avoidance."

The PM had previously hinted he would go to war with unions by rejecting recommendations by independent pay review bodies, but has now announced he will not do so.

He said at a briefing in Downing Street: "Those (pay review) bodies have considered a range of evidence about where to set this year's pay. And their recommendations to Government are for public sector pay rises to go up by a significant amount.

"Now clearly, this will cost all of you as taxpayers more than we had budgeted for. That's why the decision has been difficult, and why it has taken time to decide the right course of action.

"I can confirm today that we are accepting the headline recommendations of the pay review bodies in full, but we will not fund them by borrowing more or increasing your taxes."

It comes as junior doctors stage the longest walkout in NHS history in the long-running dispute over pay and patient safety.

Following crunch talks between Mr Sunak and Chancellor Jeremy Hunt, it was ruled that junior doctors should get a 6% pay rise next year - the same figure as police and prison officers will receive.

The Government's refusal to make extra cash available - instead ordering civil servants and NHS chiefs to find ways of cutting spending - has sparked alarm.

Ministers are already braced for walkouts by teachers from September (Zuma Press/PA Images)

Paul Johnson, head of the Institute for Fiscal Studies, told The Times: “If you’re spending, say, a billion pounds more on pay it will probably mean fewer teachers and teaching assistants or fewer textbooks and school trips. It will put more pressure on public services that are already finding it difficult to deliver.”

And Sir Julian Hartley, chief executive at NHS Providers said: "Pay awards need to be fully funded, the NHS hasn't got the resources to fund them from existing budgets. Every penny counts in the context of delivering all the priorities for patients and for elective recovery and urgent and emergency care."

It comes after Mr Hunt said the Government would take "difficult but responsible" decisions on pay awards for millions of public sector workers.

The Treasury has ruled out increasing borrowing to pay for wage rises, meaning any extra cash for workers may have to come from raiding existing departmental budgets - potentially meaning cuts to services.

Mr Hunt told MPs that "it is important to deliver on the Prime Minister's priority to get debt falling and to control borrowing to avoid adding inflationary pressures and risk prolonging higher inflation".

"That means taking difficult but responsible decisions on the public finances, including public sector pay, because more borrowing is itself inflationary."

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Dave Burke