Rishi Sunak preparing for fresh concessions to end public sector strikes

Rishi Sunak is preparing to make fresh concessions to end months of debilitating public sector strikes, as negotiations with teachers began and junior doctors agreed to formal talks.

With No 10 now keen to see all the disputes resolved in the coming weeks, talks between teaching unions and the Department for Education started on Friday and are expected to continue through the weekend. On Friday night the Department of Health and Social Care said the British Medical Association representing junior doctors has accepted an offer of pay talks.

But strikes by the University and College Union planned for next week will go ahead after the union’s higher education committee voted to continue with industrial action and declined to put proposals from employers to a vote by members.

The health secretary Steve Barclay’s pay offer to NHS unions on Thursday underlined that the government is now prepared to compromise after a months-long standoff in which ministers insisted there was no extra money for the current financial year.

NHS staff including nurses, porters and ambulance crews were offered a one-off bonus of up to 8.2% for this year and a pay rise of 5% from April, with more for the lowest paid – a deal that the government hopes will encourage other unions to come to the table.

Most NHS unions involved in the dispute are recommending the offer to their members, who will have to approve it in a vote.

Questions continued to swirl on Friday about how the NHS increase will be paid for, however, with discussions being held between the Department of Health and Social Care (DHSC) and the Treasury. It is believed the British Medical Association has also agreed to formal negotiations on similar terms following three days of strikes by junior doctors this week.

DHSC had previously only been funded for a 3.5% rise, and it is unclear where the extra money will come from. A DHSC source conceded that efficiency savings were likely to be part of the answer.

“We do expect efficiencies to be part of that, and that’s fine: Steve would rather money went on paying nurses, rather than being wasted in parts of the department – but it wouldn’t have any impact on patient care,” the source said.

The shadow health secretary, Wes Streeting, rejected that, saying: “I don’t think it’s plausible for the health secretary on one hand to say there won’t be cuts to frontline services but on the other fail to explain where the money is actually coming from.

“He can’t tell us where exactly the money is coming from and I just don’t think he is being serious.”

NHS leaders fear they could face a major funding hit to cover the rise, as has happened in previous years, and are pressing the government for greater clarity. NHS England has previously said there is nothing left to cut as it has already made all the efficiency savings possible, and it has a budget shortfall of up to £7bn for 2023-24, which its finance chief, Julian Kelly, said could result in “stringent choices” about investment, including for elective surgery, cancer performance, emergency pressures and mental health.

Sally Gainsbury, an expert on NHS finances at the Nuffield Trust, said there was no room in the NHS budget to fund the pay rises, nor was there extra in the DHSC budget as it had already asked the Treasury for an additional £6.2bn extra this year to cover ongoing Covid-related costs.

She estimated that the 5% consolidated pay offer would cost about £3.5bn, “roughly £2bn higher than the plans assume”.

A Downing Street source said Sunak had scrutinised the NHS offer personally. “He’s all over the numbers: he would not have signed off on something that was not affordable,”, they said. “I think everybody wants to put these strikes behind us.”

Teaching unions and the Department for Education (DfE) issued a joint statement on Friday saying their talks would focus on teacher pay, conditions and workload reduction.

The National Education Union (NEU), which held two days of strikes in England this week, said it would “create a period of calm for two weeks” and hold back from announcing further industrial action to allow talks to go ahead, ending an impasse with the DfE.

The parties, including the National Association of Head Teachers, the Association of School and College Leaders and the NASUWT, have agreed a vow of silence on the progress of negotiations through the media.

It is understood that teaching unions were warned that limited resources were available across government to settle public sector strikes, suggesting it was in their interests to pursue a rapid resolution of their own dispute.

A key sticking point for the teaching unions is whether any pay deal would have to be funded through existing schools budgets, echoing the concerns of health unions about the funding of the NHS deal.

Before Friday night’s news of formal talks was announced, Vivek Trivedi, a co-chair of the British Medical Association’s junior doctor committee, told BBC Radio 4’s Today programme he was optimistic discussions would begin in the coming days. “It’s disappointing that it’s taken strike action to have meaningful discussion but it’s promising that they’re able to move forward and I only hope we’re able to do that in our own dispute,” he said.

Junior doctors are expected to be offered a similar deal to the other NHS unions, but ministers want to see the BMA suspend strike action and drop its claim for a 35% rise to restore years of lost earnings.

This week’s junior doctors strike took an even greater toll than earlier industrial action from nurses and ambulance workers, with more than 175,000 appointments and procedures rescheduled to protect emergency, critical and urgent care.

Streeting urged the government to come to an agreement with junior doctors, but warned that Labour would not be willing to fund the full 35% pay increase that the BMA had asked for. “I wish I could promise that a Labour government would deliver full pay restoration overnight, but the truth is we can’t,” he said.