THE UK Government has agreed to give public sector staff a pay rise – but Rishi Sunak’s decision not to borrow to fund the increase could leave departments forced to find an extra £3 billion from existing budgets.

It comes after a year of strikes across the public sector, as rocketing inflation sees workers’ pay packets shrink.

Prime Minister Rishi Sunak accepted recommendations from all pay review bodies on Thursday – with teachers to receive a 6.5% boost, junior doctors 6%, police and prison officers 6% and armed forces personnel 5-6%.

Aside from the pay rise for armed forces personnel, the changes will not affect public sector staff in Scotland.

Confirming the changes, Treasury minister John Glen told the Commons: “The action we have taken today is the most responsible way forward, striking a balance between the demands of our public sector workers and the needs of our country and economy.”

Shortly after the announcement Sunak gave a press conference in Downing Street, where he confirmed that there will be no further Government borrowing to fund the pay rises.

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Instead, non-UK citizens will be charged more to access healthcare and visa fees will go up significantly for those hoping to work in, study in, or visit the UK.

The Prime Minister told a Downing Street press conference: “What we have done are two things to find this money.

“The first is we’re going to increase the charges that we have for migrants who are coming to this country when they apply for visas.

“And indeed, something called the immigration health surcharge, which is the levy that they pay to access the NHS.

“So all of those fees are going to go up and that will raise over a billion pounds.”

With more money needed to fund the pay rises, Sunak insisted “it’s not about cuts” but about “reprioritising”.

“So we are asking departments to reprioritise to support public sector workers and that will mean in other areas – it’s not about cuts, it’s just about focusing on public sector workers’ pay rather than other things,” he insisted.

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Sunak also offered a warning to trade unions and workers still involved in strikes and industrial action.

“Now there’s a clear message here,” he said. “There are always choices. Budgets are not infinite. When some ask for higher pay, that will always create pressures elsewhere.

“It is now clear momentum across our public services is shifting. The vast majority who just want to get on with their life’s calling of serving others are now returning to work.

“Today’s offer is final. There will be no more talks on pay. We will not negotiate again on this year’s settlements and no amount of strikes will change our decision.”

Unite union general secretary Sharon Graham condemned the Government for its approach.

“By accepting the PRB (pay review body) recommendations and then not funding them, the Government is putting its departments between a rock and hard place," she said.

“They now have to choose between paying workers a half-decent salary or cutting services in already underfunded public services.

“If the Government wanted to, it could well afford to pay public sector workers properly, while maintaining and indeed improving funding for schools and hospitals.

“It could start by looking at the money made by profiteering companies that have been driving up inflation.”

The National’s editor Laura Webster will join political economist Richard Murphy to discuss the implications of today’s announcement, and bust common Tory economic myths about the public sector, live on Facebook, Twitter and YouTube from 4pm. Join live and put your questions to the expert.