Chancellor Rachel Reeves is under mounting pressure after independent pay review bodies recommended higher-than-expected salary increases for millions of public sector workers, risking fresh strikes if the government fails to meet demands.
Teachers could receive a 4% pay rise, while NHS staff have been offered 3% both above the Treasury’s initial 2.8% forecast. The proposed hikes come as the government grapples with a £15 billion overspend on benefits and public sector wages last year, forcing ministers to find savings within existing budgets.
Unions have warned of industrial action if the pay awards are not fully funded, with teaching unions NASUWT and the National Education Union threatening ballots. NHS staff, still reeling from years of real-terms pay cuts, are also reportedly preparing for potential walkouts, risking further disruption to hospitals.
The Treasury insists it is considering the recommendations but has not committed to additional funding, leaving schools and hospitals to find “efficiency savings” a move critics say will deepen austerity in already strained services.
With inflation still biting and morale low, the pay dispute threatens to reignite the wave of strikes that plagued the previous government. Reeves must now decide whether to prioritise fiscal restraint or avert another winter of discontent.
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