King’s Speech: Five big problems the government has to fix

Decisions on pay rises for NHS staff, teachers, police and prison guards in England have to be taken by the end of this month. This is when the official public sector pay review, external process for 2024-25 must be concluded.

It is estimated , externalby the Institute for Fiscal Studies (IFS) that the government would need to find at least an extra £7bn per year to prevent the wages of these public sector workers falling further behind their counterparts in the private sector.

Data , externalfrom the IFS shows that while average private sector inflation-adjusted wages are around 4% higher than in 2010, public sector wages are still around 2.5% lower.

The average pay for nurses is down 6.5% over that time, teachers’ pay is 9% lower and 15% lower for doctors.

Finding £7bn per year extra would be very challenging given the government’s chosen fiscal rules, which restrain its spending and taxation powers.

But if it fails to do this, it could find its targets to recruit more teachers and nurses even harder to achieve – or even risk provoking further public sector strikes.