May softens public sector pay restraint

Theresa May's pay increase has not been welcomed by everyone. Credit: PA

As I said on Monday, the government is signalling that the 1% pay cap on public sector pay is dead.

But Tuesday's announcement does not augur a great salary bonanza for all the public servants on whom we depend to keep our country safe, healthy and civilised.

First of all, half the 2% pay rise for police officers will not be consolidated or made permanent - it is a reward for their exceptional performance over the past year.

Second, prison officers will receive 1.7%, which means pay rises for police and prison services are both below the 2.9% rise in inflation announced, meaning, in real terms, their pay is still falling.

Third, there is no extra money from the government to fund these rises: it will all have to be found from existing services resources (which will prompt an ouch).

Prison officers will get a rise. Credit: PA

All that said, the Treasury has explicitly stated: "In some parts of the public sector, particularly areas of skill shortage, more flexibility [on pay] may be required."

This is as much as we will hear before the budget that the 1% pay cap is the proverbial dead parrot.

The Treasury says: "There will still be a need for pay discipline."

The government is not going out of its way to make friends in the public sector.