The government announced on Thursday that most public sector workers covered by independent pay review bodies will receive above-inflation pay awards for 2025–26. Key elements of the settlements include:
- Doctors, Dentists & Teachers (England): A 4% increase, with resident doctors also receiving a one-off £750 supplement bringing their average pay rise to 5.4%.
- Nurses, Midwives & Other NHS Staff (England): A 3.6% uplift under the Agenda for Change framework.
- Prison Officers (England & Wales): A 4% rise aligned with teachers and doctors.
- Civil Servants: A 3.25% increase for staff, including senior grades.
- Armed Forces: A 4.5% rise for junior ranks and 3.75% for senior officers.
With headline inflation at 3.5% in April and forecasts of 3.2% over the coming year the pay awards represent modest real-terms gains for most groups. The Treasury had originally budgeted for a 2.8% average increase, so the higher settlements will largely need to be met from existing departmental budgets.
Funding Pressures and Union Responses
- Education Sector: The Department for Education has found an additional £615 million to cover teachers’ pay but expects schools to offset some costs through “improved productivity and smarter spending.” The National Education Union cautioned that unfunded increases could force cuts to classroom resources and support staff, although it described the rise as “broadly acceptable.”
- Health Service: NHS England has pledged to protect frontline care by reducing temporary staffing costs, eliminating duplication and streamlining services. However, the Royal College of Nursing called a 3.6% rise “grotesque” and warned that the award will be “entirely swallowed up” by living-cost pressures unless additional funding is provided. The British Medical Association also criticized the doctor pay deal as insufficient and is balloting junior doctors on potential strike action.
Political Context
Last year’s pay settlements ranging from 4.75% to 6% ended a wave of public sector strikes but drew criticism for their budgetary impact. Opposition parties have accused the government of conceding too much to unions and warned of further industrial action if the financial settlements fail to match inflation and rising living costs. Shadow ministers have called on the government to clarify how the extra pay will be financed without undermining service delivery.
As public sector workers and their unions digest the details, pressure is mounting on ministers to ensure that pay increases translate into improved morale and retention, rather than service reductions or fresh disputes over funding.
