Angry trade union bosses tonight warned of fresh NHS and school strikes after ministers recommended a 2.8 per cent pay rise for millions of public sector workers.

In its submissions to a series of pay review bodies, the Government set out its proposed limit for salary increases for 2025/26.

This included for teachers, NHS staff and senior civil servants, who were among public sector workers given pay rises of between 4.75 per cent and 6 per cent this year.

In its evidence to pay review bodies, the Treasury noted how it had accepted 'difficult trade-offs' to deliver the 'first real terms pay increases for several years' for 2024/25.

Turning to the 2025/26 recommendations, the department pointed to the Office for Budget Responsibility's (OBR) forecast of CPI inflation at 2.6 per cent for 2025/26.

It also said there was an OBR expectation of 'moderate' wage growth, at 3 per cent, across the wider economy over the next financial year.

But trade union leaders branded the recommendation of a 2.8 per cent pay rise for 2025/26 as 'deeply offensive' and disputed whether it would match inflation.

Daniel Kebede, general secretary of the National Education Union, said: 'A 2.8 per cent increase is likely to be below inflation and behind wage increases in the wider economy.

'This will only deepen the crisis in education. We need an above-inflation increase as part of a series of urgent steps to achieve the major pay correction needed to restore the pay lost and tackle teacher shortages.'

He noted how NEU members had 'fought to win the pay increases of 2023 and 2024' and said his union was 'putting the Government on notice'.

'Our members care deeply about education and feel the depth of the crisis,' he added. 'This won't do.'

Helga Pile, UNISON's head of health, said the recommendation of a 2.8 per cent pay rise was 'not what NHS workers wanted to hear'.

'Staff are crucial in turning around the fortunes of the NHS,' she added.

'Improving performance is a key Government pledge, but the pay rise proposed is barely above the cost of living. 

'Letting the discredited pay review body decide how much cash is needed for updating Agenda for Change pay scales isn't a smart move.

'Nor is insisting the costs of next year's wage rise and modernising the pay bands come from the same pot.

'NHS staff will end up with less, especially as money will have to be spent to keep the lowest paid above the legal minimum.'

She noted that 'problems with the pay scales have led to lots of local strikes' and warned a 'decision to push tackling the outdated pay structure back into next year means there could well be more'.

Professor Nicola Ranger, general secretary of the Royal College of Nursing, said: 'The Government has today told nursing staff they are worth as little as £2 extra a day, less than the price of a coffee.

'Nursing is in crisis - there are fewer joining and too many experienced professionals leaving.

'This is deeply offensive to nursing staff, detrimental to their patients and contradictory to hopes of rebuilding the NHS.

'The public understands the value of nursing and they know that meaningful reform of the NHS requires addressing the crisis in nursing.

'We pulled out of the pay review body process, alongside other unions, because it is not the route to address the current crisis.

'That has been demonstrated today. Fair pay must be matched by structural reform. 

'Let's open direct talks now and avoid further escalation to disputes and ballots – I have said that directly to the Government today.'

The British Medical Association said the Government had shown a 'poor grasp' of unresolved issues from two years of industrial action and urged the pay review body to 'show it is now truly independent.'

Chairman of the council Professor Philip Banfield said: 'For this Government to give evidence to the doctors' and dentists' pay review body believing a 2.8 per cent pay rise is enough, indicates a poor grasp of the unresolved issues from two years of industrial action.

'It is far below the current rate of inflation experienced by doctors in their daily lives and does not move significantly closer to restoring the relative value of doctors' pay lost over the past 15 years.'

The Department of Health said it had set aside 2.8 per cent to fund recommendations for the NHS pay review body and the doctors' and dentists' remuneration board remit groups.

'DHSC view this as a reasonable amount to have set aside based on the macroeconomic data and forecasts and taking into account the fiscal and labour market context,' the department said in written evidence to the NHS pay review body.

The Department for Education said a 2.8 per cent pay rise for teachers next year would 'maintain the competitiveness of teachers' pay despite the challenging financial backdrop the Government is facing'.

In written evidence to the school teachers' review body, it said: 'The Department's view is that a 2.8 per cent teacher pay award would be appropriate for 2025/26.

'This level of award would maintain the competitiveness of teachers' pay, despite the challenging financial backdrop the Government is facing.'

It would follow a 5.5 per cent pay award for 2024/25 that has meant a combined increase of over 17 per cent over the last three pay awards, the department said.

This pay proposal for 2025/26 could see that rise to over 21 per cent in four years, it added.

The Cabinet Office also suggested pay increases for senior civil servants should be kept to no more than 2.8 per cent.