Public sector pay freeze ended

In his Budget last week, Chancellor Rishi Sunak announced the end of the public sector pay freeze.

Sunak said that the UK economic recovery is “firmly back on track” following the pandemic, paving the way for a pay rise for millions of public sector workers.

With around 5.7 million public sector workers, the news will be welcomed.

Public sector pay rises were “paused” by the Chancellor this time last year for the 2021/22 fiscal year. Excluded from the pay freeze were NHS workers and those in the public sector earning less than £24,000 a year.

Also announced in the Budget was an increase in the minimum wage for two million workers aged 23 and over. Their pay will rise from £8.91 to £9.50 an hour from 1st April 2022.

This rise in the so-called “national living wage” means a full-time worker will receive more than £1,000 a year more, with their earnings rising by 6.6%.

However, these pay rises will be reduced by recently announced National Insurance increases (to boost NHS and adult social care funding) and cuts to the temporary Universal Credit uplift.

The rising cost of living due to increased price inflation will also dampen any pay rises.

Announcing the decision to end the public sector pay freeze, Mr Sunak said in a statement:

“The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay.

“Along with our Plan for Jobs, this action helped us protect livelihoods at the height of the pandemic.

“And now, with the economy firmly back on track, it’s right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise.”

Most frontline public sector workers see their pay rises determined by independent pay review bodies, which make recommendations to government ministers.

The scale of any public sector pay rise will depend on the level of government funding provided to each group.

A growing number of Budget announcements made ahead of the statement in the House of Commons resulted in Commons Speaker Sir Lindsay Hoyle suggesting government ministers should resign for previewing Budget measures in the press.