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Treasury admits some workers could be denied 1% pay rise

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Unions reacted with anger today after the Treasury warned there should be ‘no expectation’ that every worker will receive a pay rise in line with the 1% ceiling George Osborne set for public sector pay.  

  • Treasury letter says public sector pay rises should be “targeted” to address “recruitment and retention pressures”
  • Some workers could receive more than 1% while “others could receive less”
  • Unison retorts: “Its difficult to see how much targeting you can get from a miserly 1% without resulting in hundreds of thousands not getting a pay rise at all”


In a letter to the pay review bodies, chief secretary to the Treasury Greg Hands said today that the government intended pay rises to be applied in a “targeted manner”.

In his July Budget following the general election, chancellor George Osborne revealed the government would continue public sector pay restraint for four more years, limiting pay rises to 1%per annum.

Mr Hands’ letter to pay review body chairs seen by LGC’s sister title Health Service Journal, adds: “The government expects pay awards to be applied in a targeted manner to support the delivery of public services, and to address recruitment and retention pressures.

“This may mean that some workers could receive more than 1% while others could receive less; there should be no expectation that every worker will receive a 1% award.”

Mr Hands added that without further pay restraint public sector investment and jobs could be put at risk.

The letter also repeated warnings from Mr Osborne that the government would pursue reform of pay, terms and conditions and would consider legislation where necessary.

Responding to the letter, Unison general secretary Dave Prentis said: “It is clear from this letter that the government’s promise of a 1% pay rise for public sector workers was all smoke and mirrors.

“There was no substance to [Mr] Osborne’s claim and NHS staff will be bitterly disappointed to hear many of them may not even get an extra penny for five more years.”

He added: “It is difficult to see how much targeting you can get from a miserly 1% without resulting in hundreds of thousands not getting a pay rise at all.

“Ministers’ acknowledgement of saving at least £8bn with the pay caps and freezes imposed on public sector pay proves it is nurses, healthcare assistants, porters and paramedics who are still paying for a deficit they have nothing to do with.”

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