Overview

• Independent pay review bodies have recommended a nearly 4% pay rise for teachers and close to 3% for NHS workers, exceeding the government's 2.8% budget allocation.
• The Treasury has mandated that any additional pay costs must be offset through efficiency savings within existing departmental budgets.
• Unions representing teachers and NHS staff have warned of potential strikes if the pay awards are not fully funded by the government, rather than through budget cuts.
• Last year’s public sector pay rises contributed to a £15 billion borrowing overshoot, intensifying fiscal pressures on the government.
• Ministers are expected to accept the pay review recommendations, but the decision risks reigniting widespread industrial action across key public services.