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Treasury Is Unlikely To Come Up With More Money To Break Strike Deadlock

Nurses during a strike in December 2022 (Alamy)

4 min read

The treasury does not plan to grant additional money to departments to fund public sector pay settlements, the possibility of which unions say are a condition of agreeing to negotiations that would end strikes, PoliticsHome understands.

A Treasury source told PoliticsHome that they are not directly involved in any departmental talks with unions or employers when it comes to resolving the strikes, and that any pay decisions will need to be paid for from within departmental settlements, after calls for extra funding emerged from talks between unions and ministers on Monday. 

It is unclear whether Barclay and Chancellor Jeremy Hunt have any time scheduled to discuss pay deals, but earlier this week, Hunt said that ministers “don’t want to agree to a settlement that would further fuel inflation or be unaffordable”. 

“We need to find that middle ground and I hope that’s what happens with these talks,” he added. 

Union sources believe that it is now in the Treasury's gift to shift unions' position by granting additional funding that would end strikes, following relatively positive talks on Monday between unions and ministers of key departments facing strikes, including health, education and transport. 

Meetings between unions representing NHS staff and Health Secretary Steve Barclay in particular were felt to have gone well overall, despite outrage from Unite lead negotiator Onay Kasab over a suggestion that enhanced pay for staff should be achieved through "productivity savings" rather than increased budgets. 

One union source familiar with what was said in the meetings told PoliticsHome there had been “progress” and the “tone has changed” from the Department of Health, but agreed there was unlikely to be further movement without a change in position from the treasury. 

Unison head of health Sara Gorton told The Guardian that Barclay had asked unions to help him put forward a case to the Treasury for additional funding for pay settlements, a challenge she said they readily accepted. 

It has been reported that one of compromises being considered by Barclay is offering backdated pay for this year in the next pay settlement for 2023/24. While the union source said this had been brought up by unions in Monday's talks, Barclay “didn’t want to get into any detail”, because “for that to happen there has to be some movement from Treasury”. 

Nurses next plan to walk out on the 18 and 19 January. Ambulance workers are due to "reluctantly" go on strike on Wednesday unless “government can come up with the goods”, according to Gorton. 

“Ministers know unless they come up with some hard cash for a pay boost for what’s left of the current financial year, there can be no resolution to the dispute. And there must be talks soon to agree the increase health workers are due from April,” she added in a statement.

The Prime Minister’s official spokesperson declined to give any details of whether backdating pay to January in the next pay round was an option under consideration by government, but did suggest that a fresh round of talks could be in the works soon. 

They said “constructive meetings” had been held on Monday, particularly with health unions. 

"The Health and Care Secretary says he wants to take away some of those suggestions and do further work, and hopes to have further meetings with unions in the coming days to discuss this,” the spokesperson added.  

Ahead of further strikes this week, the government has announced a controversial new bill that will limit the effectiveness of strike action.

The legislation, introduced to Parliament on Tuesday, proposes to extend a minimum service law to five new areas including the NHS, education, fire and rescue, border security and nuclear decommissioning.

The law would allow employers to set out the workforce they need, preventing employees on the list from being able to strike with protection from unfair dismissal.

"Whilst we absolutely believe in the right to strike we are duty bound to protect the lives and livelihoods of the British people," Business Secretary Grant Shapps told MPs in the Commons. 

"We're introducing legislation focusing on blue light emergency services and delivering on our manifesto commitment to secure minimum services on the railways as well."

But a union source was sceptical that the anti-strike law would curb further industrial action. 

“The only way this is going to be solved is by the government shifting,” they said. 

 “Beating unions with the stick is not the way to solve it.” 

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