Title

PAY

A 2% pay rise will help retain hard-pressed staff

Councils want to pay staff more, but they can only afford 2%, writes Heather Jameson.

The chancellor's Budget last month left local government with more questions than answers – and one of the biggest questions was: where next for public sector pay?

Philip Hammond may not have direct control over local government pay packets, but the chancellor's actions often set the tone for local government pay. Instead of clarity over how he would bring an end to the wider public pay ‘cap', the Budget offered a fudge with Hammond merely vowing to examine nurses' pay and to fund the recommended rise.

This week's announcement that local government employers will offer a headline 2% increase this year and next is likely to be met with mixed emotions across the sector. It is both not enough and too much.

After several years of 1% increases amid stagnant inflation rates, a 2% rise looks generous. Local authorities will hit the chancellor's 2015 commitment to raising the National Living Wage to £9 by 2020 – a £2 increase for the lowest paid in the five years since the announcement, while the jump from £5 to £7 took 13 years.

But a 2% rise is still a real terms pay cut, with inflation currently running at 2.8% CPI. The mortgage rate increase has hit housing – both owner-occupied and the rental market – and food inflation is currently at 4.1%.

In reality, local government workers still deserve more. Delivering essential local services against a backdrop of austerity, soaring demand and dwindling staffing levels, frontline workers deserve more than town halls can currently afford.

And therein lies the problem. Attracting staff in local government is becoming harder as stress levels rise. It only takes a Lidl or a Tesco to open locally to create an exodus in care staff who can earn more money with less stress, stacking shelves for a living.

From social workers to senior managers, local government staff are feeling the strain as the sector seeks creative ways to mitigate cuts.

But in truth, 2% is as much as many councils can manage to add to their pay bill without forcing themselves into a financial crisis. For years councils have wanted to pay staff more in order to keep them – they just haven't had the cash.

PAY

Driving devolution

By Heather Jameson | 03 September 2026

Prime Minister Andy Burnham may have set up No10 North as the engine room for devolution and is firmly in the driving seat, but who will be the engineers? He...

PAY

Councils bulk buying housing from developers to ease pressures

By Paul Marinko | 03 September 2026

With the housing market stalled, councils are bulk buying homes intended for private sale at huge discounts in a bid to ease their temporary accommodation co...

PAY

Let's start with prevention

By Jack Shaw | 03 September 2026

Jack Shaw looks at how government can make homelessness prevention a whole-place responsibility and says there are already ‘glimpses of what this can achieve’.

PAY

Only a pragmatic approach to service delivery will bring effective change

By Justin Galliford | 03 September 2026

Insourcing battles will not help overstretched councils, says Norse Group chief executive Justin Galliford.

Heather Jameson

Popular articles by Heather Jameson