Government to extend public sector pay rise cap by a year

Budget 2013: The government has extended its 1% cap on public sector pay rises by a year to 2015/16.

The cap applies to the civil service and workforces with pay review bodies, which Chancellor George Osborne said will be tasked with determining appropriate levels of award based on their affordability and individual recruitment and retention needs.

The Chancellor first announced a pay rise cap, which would follow a public sector pay freeze, in his 2011 Autumn Statement.

He said that some public sector employees have continued to receive annual pay increases of 7% or more, despite public sector pay contraints, due to progression pay arrangements.