Civil service unions have reacted with anger after being told that the Government is planning to limit pay rises from Whitehall departments to between 1% and 1.5%.
Officials described the move as an “insult” to thousands of civil servants whose pay has been capped at 1% for years.
Unions said civil servants face another year of below-inflation rises after suffering an average real-terms pay cut of 15% against RPI inflation since 2010.
Prospect deputy general secretary Garry Graham said: “Despite nearly a year of promises to listen, today’s pay guidance is nothing short of an insult to thousands of hard working public servants. The reality for many civil servants is now long hours, declining living standards and uncompetitive pay.
“In contrast to the NHS, local government and the expected outcomes for the pay review bodies, it is clear that the civil service and related bodies are being singled out as the poor relations in terms of pay, and civil servants are facing another year of painful real-terms pay cuts on top of the 15% cut they have already suffered since 2010.
“This announcement will outrage civil servants but it will also anger their employers who are seeing the damaging effect that government pay policy is having on recruitment and retention of dedicated and hardworking staff.
“Prospect will be making this case to government and we are clear that that where agreement cannot be reached on pay and our members wish to take action they will do so with the full support of their union.”
Lucille Thirlby, assistant general secretary of the FDA, which represents senior staff, said: “The latest pay guidance issued by the Treasury confirms that for the civil service, the pay cap is very much still in force. Pay awards between 1% and 1.5% do not represent pay ‘flexibility’ as the Government claims, nor do they recognise the huge challenges currently facing our civil service.
“In the crucial run-up to Britain’s exit from the European Union and the big challenges ahead in delivering first-class public services, civil servants should be valued for their commitment, dedication and hard work, but instead are being treated as the poor relation of public services.
“The Chancellor is covering his ears and refusing to face up to the reality that the current pay policy is not fit for purpose.
“With the recent NHS pay deal we have seen what can be achieved when ministers, employers and unions engage in genuine dialogue to address workforce and pay issues.
“This positive outcome was the result of months of talks, yet the Treasury has imposed this pay guidance without any meaningful engagement with staff representatives. It’s time ministers in the civil service stood up for their staff in the way that others have done around the Cabinet table.”