Spending Review: Sunak set to end wage freeze with new public sector pay policy

Details of NHS settlement also revealed ahead of Wednesday’s statement
Photo: BBC screengrab

By Richard Johnstone

25 Oct 2021

Rishi Sunak is to set out a new pay policy for civil servants in this week’s Spending Review, with reports indicating that it will end the one-year freeze on wages.

In a series of interviews yesterday, the chancellor provided some information on what he is likely to announced on Wednesday, when the Spending Review is published alongside a Budget.

Asked by the BBC’s Andrew Marr if he would end the freeze, which was introduced last year as part of the government’s fiscal response to the pressures of the coronavirus pandemic, Sunak said that there would be new policy set out on Wednesday.

He said pay increases for 2021-22 were targeted, as NHS workers and public servants who earn below the median wage of £24,000 will be exempt from the freeze, because the private sector weas seeing large decreases due to people being on 80% wages through the furlough scheme

“We thought that was reasonable and fair,” he said. “Now going forward we will be able to set a new pay policy and that will be a topic for [the] Spending Review.”

A report in the Sun today has said that the freeze will end, although it does not give any details of the extent of any possible increases or if, crucially, they will be funded by the Treasury or have to come from existing budgets.

This was one of the number of indications of what will be in the Spending Review in recent days. It has been reported that the review will include a £6.9bn local transport fund, although Sunak acknowledged yesterday that only around £1.2bn of this funding would be new. It has also been reported that a total of £3bn will be invested in education and skills, including helping those aged between 16 and 19 additonal vocational skills.

A NHS funding settlement has also been announced by health secretary Sajid Javid today, who said that the health service in England will receive an extra £5.9bn. He told the BBC that the funding was new money and would be in addition to the £12bn of extra funding pledged, on a UK basis, for health and social care in September.

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