Sunak ‘set to scrap pay freeze’ but may not fund rises

TUC says departments must get budget for wage hikes or move will be meaningless
Chancellor Rishi Sunak Xinhua News Agency/PA Images

By Jim Dunton

19 Oct 2021

Chancellor Rishi Sunak is reportedly poised to scrap the pay freeze imposed on the vast majority of civil servants when he delivers his Spending Review and Autumn Budget next week.

However the Trades Union Congress has warned that lifting the freeze, imposed last year on civil servants and other public sector workers who earn salaries of more than £24,000, would be meaningless if the result is not reflected in the pay packets of officials. The freeze does not apply to NHS staff.

The Guardian said Sunak would use 27 October’s Spending Review to announce that the pay freeze will end in April, at the conclusion of the current financial year. But it noted that funding any future pay rises depend on the three-year settlements given to departments.

TUC general secretary Frances O’Grady said any end to the public sector pay freeze that was not accompanied by funding to increase pay would be a hollow gesture.

“In the face of a looming cost-of-living crisis, the government must increase departmental budgets so that every public sector worker gets a meaningful, real-terms pay increase,” she said. “If ministers don’t give departments the funding to raise pay, they are not ending the public sector pay freeze.”

When Sunak confirmed the government was implementing the pay freeze in his March Budget, the Prospect union – which represents professionals such as engineers and meteorologists in the civil service – said it was equivalent to a real-terms pay cut of hundreds of pounds.

Deputy general secretary Garry Graham said at the time that the freeze, which came on the back of a decade of pay restraint for civil servants, was a poor reward for officials who had worked tirelessly in response to the demands of the pandemic and Brexit.  

“With RPI now forecast at 2.6% instead of 1.4% for 2021-22, that is now a real-terms £700 pay cut for the average civil servant,” he said.

“That means since 2010, their pay will have been cut in real terms by almost £7,000.”

In recent months civil servants working at HM Revenue and Customs and the Ministry of Justice have benefitted from bespoke deals that will see average wages rise by pay-freeze busting amounts, in return for some concessions on their working arrangements.

HMRC’s deal is worth 13% over three years, while the MoJ agreement delivers a 9.9% uplift over the same period.

Last month the PCS union officially rejected a 2021 pay offer from the Department for Environment, Food and Rural Affairs that would have seen some staff receive a non-consolidated performance-related bonus. It called for an across-the-board £300 bonus for all staff instead.

Defra said Treasury guidance prohibited such a move.

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