Pay restraint will continue for public sector workers up until 2020, despite recent indications that the government has rowed back on its financial austerity targets.
A letter sent in July from the Treasury to one of the government’s pay review bodies stated the “fiscal context remains very challenging following the outcome of the EU referendum vote”.
It goes on to confirm that annual pay rises for public sector workers will be an average of 1% up to the end of parliament, as per previous government announcements made in the autumn spending review and summer budget.
“It appears that Hunt has not changed his tune and wants this straitjacket of harsh pay austerity to continue”
“As I set out in my letter to you last year, I expected to see targeted pay awards, in order to support the continued delivery of public services, and to address recruitment and retention pressures,” said the letter sent on 13 July by Greg Hands, chief secretary to the Treasury at the time.
“This may mean that some workers could receive more than 1% whilst others receive less, and there should be no expectation that every worker will receive a 1% pay award,” it added.
It is understood that health secretary Jeremy Hunt last week wrote to the chair of the NHS pay review body underlining the government’s commitment to pay restraint.
But calls have been made for the government to drop this approach in light of recent indications from the prime minister, Theresa May, that targets aimed at reaching a surplus for government finances by 2020 are to be abandoned.
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The union Unite said that instead of the “straitjacket of harsh pay austerity”, public sector workers should benefit from the “resetting of the British economy”.
Its national officer for health Colenzo Jarrett-Thorpe said: “It is time that Jeremy Hunt changed the stuck record on the gramophone and signalled that he truly values NHS staff who have seen their real incomes drop by some 15% since the Tories came to power in 2010.
“Dedicated NHS staff have endured a crippling cocktail of pay freezes and 1% pay rises over the last six years – it appears that Hunt has not changed his tune and wants this straitjacket of harsh pay austerity to continue, perhaps up to 2020,” he said.
“The new government has indicated that there may be a loosening of the financial targets so beloved by George Osborne when he was chancellor – if that’s the case, public sector workers should be the beneficiaries of this resetting of the British economy,” he added.