.svg)
The Treasury has warned that pay rises for NHS staff and teachers must come from existing budgets, raising the risk of strike action.
Independent pay review bodies for teachers and NHS staff in England are expected to recommend higher salary increases than ministers had initially proposed. Teaching unions NEU and NASUWT have already threatened strikes unless schools receive extra funding to cover the rises, while the Royal College of Nursing (RCN) insists that pay increases must not reduce frontline resources.
However, The Guardian reports that the Treasury has made it clear it will not borrow to fund the rises, meaning other departmental budgets will face cuts if the increases go ahead.
Government insiders said there is precedent for accepting pay review body recommendations, but no final decision has yet been made. One source commented, “Unlike previous governments, we are not going to the markets to borrow more money for this.”
In the Department of Health and Social Care, there is an acknowledgment that meeting pay demands may be necessary to avoid further strikes, which could seriously damage the government politically, hinder recruitment efforts, and slow progress on reducing waiting lists. “Wes [Streeting, the health secretary] secured a generous settlement in the autumn,” one department source noted.
The pay review bodies are believed to have proposed pay rises of around 4% for teachers and 3% for NHS staff, compared to the 2.8% increases budgeted by the government.
Labour leader Keir Starmer said he hoped the government would work with NHS staff to avoid strikes, emphasizing that cooperation had helped reduce waiting lists. “We don’t want disputes," he said. "We have doctors and nurses on the frontline, not on the picket line, and that’s a better way to work.”
Unions had sharply criticized the government’s initial December budget. The British Medical Association called it an example of "pay erosion," and Unison said the increases were "barely above the cost of living."
When Rachel Reeves became chancellor, she accepted a 5.5% public sector pay increase recommended by the review bodies, arguing that avoiding further strikes and aiding recruitment outweighed the immediate costs.
Care minister Stephen Kinnock confirmed the government has received the latest recommendations. “We are focused on putting more money in working people’s pockets, but we must balance the books and respect fiscal limits,” he said, urging unions to engage “constructively.”
A Treasury spokesperson added: “We are considering the independent pay review bodies’ recommendations and will respond in due course. Last year, we accepted their recommendations in full, delivering the first real-terms pay rise in years.”
Both Unison and the RCN are consulting their members over possible industrial action.
RCN legal and employment chief Jo Galbraith-Marten criticized the current process, saying, “We need direct talks with the government, not outdated pay review systems. Any pay rise must be fully funded without cutting frontline services.”
Unison’s head of health, Helga Pile, added: “With so much at stake, ministers must show they genuinely value the workforce.”
