Unions warn PM over public sector pay deals

Keir Starmer is on a collision course with unions after playing down the chance of real-terms pay increases for public sector staff in forthcoming negotiations, prompting widespread warnings of a crisis in recruitment and staffing.

- Peter Walker, Pippa Crerar, Rowena Mason

While No 10 is not ruling out some settlements above inflation, such as for junior doctors, the prime minister warned unions to be prepared for disappointment before imminent findings from pay review bodies.

In response, unions representing health staff and teacher said insufficient pay awards risked exacerbating crises in recruitment and retention for both sectors, with the main teaching union saying education in particular was "at breaking point".

Speaking on a visit to Washington DC for the Nato summit, Starmer was asked whether, with many calls for above-inflation awards in the coming public sector negotiations, he would "give the unions what they want".

"No, is the answer to the last bit of that question," Starmer replied.

"Obviously, there are a number of pay settlements to be gone through on an annual basis. But the finances are in a very poor state, I think that is obvious. And that's why we've been careful in what we said going into the election, and we'll be careful what we say coming out of it.

"In terms of the overall audit, what I've done at the moment, as you'd expect, is to prioritise the most significant and the most important." Public sector pay is likely to be one of the most immediate and public manifestations of the new government's struggle to manage 8 expectations when it comes to improving services amid a highly constrained fiscal situation.