Government confirms 'efficiencies' will have to be found to pay for teaching and NHS staff pay rises

22 May 2025, 17:22

Pat McFadden has confirmed 'efficiencies' will have to be found to cover a 4% pay rise for teaching and NHS staff.

Millions of public sector workers are to receive a pay boost as Chancellor Rachel Reeves has accepted recommendations in the latest review of public sector pay.

Cabinet Minister Pat McFadden revealed to LBC's Tom Swarbrick how the government plans to pay for these pay rises.

He said: "Some of it's budgeted for and some of it will have to be found from efficiencies within big departments."

"I think in big organisations like the education system, they get a budget for a few years, but they're also, quite rightly, under a constant quest to get the best value for money in the systems that they run. And that is how these awards will be funded," he added.

Mr McFadden said that they think the rises are "fair", adding: "We really value the doctors, the nurses, the teachers, the public service workers who will get these pay awards."

"These public services are hugely important to the way the country works. The workforce that run them are hugely important to that", he said. "So we want to have pay awards that are fair to the public service workers themselves and fair to the taxpayers who fund them."

Teachers and doctors are set to receive a 4% pay rises, while the government confirmed NHS workers in England on Agenda for Change contracts, covering most staff apart from doctors, dentists and senior managers, have been offered rises of 3.6%.

Junior and resident doctors are to receive a 4% boost, plus a £750 payment.

Meanwhile, armed forces will see the biggest pay boost of 4.5%, followed by a 4% rise for consultants, teachers, and prison officers.

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Civil servants are to receive a 3.75% salary bump, and nurses and other NHS staff will get a 3.6% rise.

The increases have been announced after the government accepted recommendations from pay review bodies higher than the 2.8% it previously budgeted for.

Unions had threatened action if pay awards were not increased, arguing 2.8% was too low.

But the Treasury has previously said rises above this will have to be funded through savings from existing budgets.

The education department has announced £615 million in additional funding to help cover the cost of pay rises this year.

But it has said schools will be asked to fund the first 1% of pay awards through "improved productivity and smarter spending".