May to use final leadership days to give public sector staff £2bn pay rise

Public sector workers including teachers and police officers are to be given a £2 billion pay rise, it has been reported.

The Treasury will unveil the biggest public sector pay rise for six years on Monday before Theresa May's tenure as Prime Minister comes to an end, according to The Times.

Two million workers will receive above-inflation salary increases, the paper said, amid concerns the private sector is pushing ahead on pay.

Police officers are set to receive a 2.5% pay rise, soldiers a 2.9% increase and teachers and other school staff 2.75%, while dentists and consultants will get 2.5% and senior civil servants 2%.

The Treasury is expected to say that, barring some extra funding for schools, the money will have to come from existing budgets.

Public sector pay rises were capped at 1% after the Conservative-led coalition came to power in 2010, but the cap was scrapped last year.

The rises to be announced next week do not apply to other public sector staff, such as more junior civil servants and nurses, whose pay is dealt with separately, The Times added.

Jonathan Cribb, a senior research economist at the Institute for Fiscal Studies, told the paper: "These public sector pay rises are higher than last year's and considerably higher than the 1% for many years before that.

"It is the highest nominal pay increase since the coalition. But these increases are still slower than pay rises that are happening on average in the private sector.

"With the partial exception of schools, there seems to be no new money to fund these pay rises, meaning savings will have to be made elsewhere."

The announcement will come during Mrs May's last days in office, with either Boris Johnson or Jeremy Hunt taking over the top job.

During the leadership contest, frontrunner Mr Johnson refused to commit to a pay rise for public sector workers despite an apparent policy pledge by one of his key backers.

Health Secretary Matt Hancock had said the public sector would be "shown some love" if Mr Johnson won, but the former foreign secretary made no spending pledge.

"Of course he's right, we are going to make sure that we properly fund our public services," Mr Johnson said.

"It's very important when you're in charge of a great public service, whether it's the police or transport, you've got to make sure – or local government – you've got to make sure that you understand their cares and their needs."