I greatly value the important work that public servants do in delivering essential public services. Those who work in our emergency services and health services do extraordinary work day in day out and I know we are all grateful for that. However, there is a trade-off between pay and jobs in many public services, and pay restraint is one of the many difficult choices the Government has had to make to help put the public finances back on track.
At Summer Budget 2015, it was announced that the Government will fund public sector workforces for an average annual pay increase of 1 per cent for the 4 years from 2016-17 onwards. At the time, the Office for Budget Responsibility estimated that this policy would protect 200,000 public sector jobs.
It is important to consider not just current pay but also the benefit of public sector defined benefit pensions. Treasury analysis has shown that in recent years public sector remuneration is still at a significant premium when considering the value of pensions.
As the Chancellor has said, public sector pay policy has always been designed to strike the right balance between being fair to our public servants and being fair to those who pay for them. That approach has not changed and Ministers will continually assess that balance.
