The public sector pay cap is set to end with a million public sector workers set to get a pay rise believed to be between 1.5 per cent and 3.5 per cent.
The abandonment of the 1 per cent pay cap after six years will be good news for the armed forces, teachers, doctors, prison officers, police and dentists.
It includes 2.9 per cent extra this year for the armed forces, 2.75 per cent for prison officers and 3.5 per cent for teachers, all of which will be backdated to the start of the financial year in April.
Police will see a 2 per cent rise, the same increase seen by junior doctors, GPs and dentists.
The rise for members of the armed forces is 2 per cent, falling short of the 2.9 per cent recommended by the Armed Forces’ Pay Review Body, but is being supplemented by a one-off payment of 0.9 per cent this year.
However, it is understood that the extra money has come from departmental savings rather than extra funds, meaning frontline services could be at risk and most would qualify for just 2 per cent, which is below the rate of inflation.
The government has come under consistent pressure to address public sector pay, with many experts blaming it for problems recruiting and retaining staff.
It was announced earlier this year that NHS workers got a 6.5 per cent pay rise over the course of three years.
David Cameron’s coalition government first introduced the public sector pay freeze in 2010, followed by a 1 per cent rise two years later, as part of his government’s austerity programme.
May confirmed last September that she would be lifting the 1 per cent annual cap on public sector pay following months of pressure.
The move confirms the scrapping of the 1 per cent pay cap last year and follows campaigns by unions for higher wage rises.
The cost of scrapping the 1 per cent cap is estimated at £4bn. The move was seen as a bid to boost staff recruitment and retention as well as improve morale in the public sector.
Unions had been arguing for pay rises closer to 5 per cent to make up for the austerity measures introduced by David Cameron’s government.
Public and Commercial Services union general secretary Mark Serwotka said:
“Our members have delivered a huge yes vote for strike action and will feel palpable anger at not being able to exercise their democratic right to withdraw their labour.”
Labour called for the government to “end the cruel pay cap once and for all”.
Peter Dowd, the party’s shadow chief secretary to the Treasury, said:
“Public sector workers have faced nearly a decade of austerity pay cuts and an onslaught on their living standards.
“The government’s offer fails to compensate workers for the huge losses in income they have faced under the Tories’ brutal pay restraint policy.”
He added that “the lack of new funding for departments also means pay rises will have to come at the cost of other services”.