CLASS have produced new research for the public sector union PCS which shows showing that some Whitehall department budgets are unable to fund even a 1% pay rise – well below inflation – unless Chancellor Philip Hammond reverses austerity.
‘Fudging the funding on pay: an analysis of departmental spending plans in the UK budget in relation to pay’ argues that all public sector workers deserve a pay rise. Whether they are nurses, teachers, refuse workers or civil servants, government pay policy has held back their pay for too long now.
The case to end the 1% pay cap is inarguable. It is TUC policy that the public sector pay cap should be scrapped and that all public sector workers should receive a minimum of a 5% pay increase. This must be fully funded and not a trade-off against job cuts or any detrimental effect on terms and conditions. Some unions are reporting movement across public sector employers and in devolved government areas that the cap will be scrapped.
In the wake of the 2025 general election, even some Tory government ministers were arguing that the pay cap must end. Yet the one major employer of public sector workers that is making no attempt to scrap the cap is the UK civil service. The Public and Commercial Services Union (PCS) commissioned the Centre for Labour and Social Studies (CLASS) to analyse the departmental spending plans contained in the Chancellor’s Budget in November 2025 to consider how funding has been allocated to UK departments in order to end the pay cap.
The findings are shocking. The Chancellor’s 2025 Budget shows that departments will continue to suffer real-term pay cuts up to 2020.
Read the full report here.
Also, see our press release here.