Public sector pay

About 5.7 million people are employed in the public sector in the UK.

Recent developments

On 27 October 2021, the Autumn Budget and Spending Review 2021 announced that public sector workers would receive “fair and affordable” pay rises across the 2022/23 to 2024/25 Spending Review period. This ended the one-year public sector pay freeze, that had been put in place in the 2020/21 Spending Review. This had affected all public sector workers except NHS staff and low paid workers.

Pay awards were predicted to be around 3% this year, but in the context of high inflation the pay awards announced over summer 2022 were around 5% on average.

How public sector pay is determined

The mechanism varies across the public sector:

• Pay awards for about 45% of the public sector – including the armed forces, the police, teachers, the Senior Civil Service and the NHS –are decided by Government Ministers and based on the recommendation of eight Pay Review Bodies (PRBs).
• Pay awards for the Civil Service are decided by individual departments based on remit guidance issued by the Cabinet Office.
• Pay awards for local government workers are agreed in negotiations between employers and trade unions through the National Joint Council for Local Government Services.
• For devolved public sector bodies, pay policy is set by the devolved administrations.

Trends in public sector pay

In April 2022, median weekly earnings for full-time employees in the public sector were 12% higher than those in the private sector. The gap had been narrowing prior to the pandemic, but increased again in 2020, partly because of greater use of furlough in the private sector.