The chancellor has said an update on nurse pay will be coming by the end of this month, following leaks that Pay Review Body (PRB) recommendations were well above what the government budgeted for.
Rachel Reeves, who took up post as the exchequer earlier this month, said over the weekend that the public did not know “how bad” some aspects of the economy were.
“We will do it in a proper way and make sure the sums add up”
Rachel Reeves
However, the new chancellor indicated that she understood the need for public sector pay rises and promised an update by the end of July, now less than two weeks away.
A new pay deal for nurses, midwives, and other NHS staff on Agenda for Change contracts was due on 1 April.
However, delays by the previous government in triggering the process of creating a deal now mean a new one is now very late and could still be months away.
“[Public sector workers] provide a huge service to our country, and we will set it out in the proper way later this month,” Ms Reeves told the BBC on Sunday.
“People won’t have long to wait, they will see that before the end of this month,” she said.
“Later this month, we will make announcements around public sector pay when we do the full analysis of public finances and public spending.”
Ms Reeves said she wanted to be “honest” with the public about the dire state of the economy, inherited from the previous government, and described it as a “mess”.
She added: “I was clear during the election that the scale of the challenge would be immense.”
According to reports in The Times, the PRBs for NHS and education workers – which recommend pay deals ot the government – are rumoured to have suggested a 5.5% pay rise recommendation.
Ms Reeves was asked if, given her ominous comments about public finances, and the fact her party only budgeted for a 3% rise, she would be able to meet the rumoured 5.5% figure.
Speaking to the BBC, she said: “I really value public service workers in our schools, in our hospitals, in the police.
“At the moment, we are looking at those PRB recommendations and doing analysis and we will work with public sector workers on that.
“We also know that there is a cost to not settling, a cost of further industrial action, a cost in terms of the challenge we face of recruiting and retaining doctors and nurses, teachers as well.
“We will do it in a proper way and make sure the sums add up,” said Ms Reeves.
She accused the Conservatives of failing to address the problem, adding: “We are in a position where the previous government gave a mandate to the PRBs but they haven’t properly factored in the cost of it.
“That is what this review will be about, looking at the state of the public services and the public finances.
“But also there is a cost of not settling, the cost of this ongoing industrial action, failing to recruit and retain doctors, nurse and teachers has an impact on our economy.”
The Royal College of Nursing (RCN), one of several organisations that submits evidence to the NHS PRB, told Nursing Times that it had received no confirmation about the pay deal recommendation.
An RCN spokesperson said: “The pay award must be fair and begin to turn around a broken NHS.
“We will always give nursing staff a vote on whether they accept it,” they added.
Ms Reeves, in her interview with the BBC, reiterated Labour plans to put money into building infrastructure across the UK.
These plans included giving local authorities house building targets, building energy infrastructure from central government and carrying out the party’s manifesto pledge of rail renationalisation, she said.