Public sector pay increases are coming – will universities and students benefit?

Independent pay review bodies have already recommended pay increases to ministers for teachers and nurses of about 5.5 per cent to keep them in line with increases in the private sector.

As a reminder, UCEA’s final offer for higher education is a £900 uplift from 1 August 2024, and as of 1 March 2025, a pay uplift of 5.7 per cent at the bottom of the spine, tapering down to 2.5% from pay point 38.

Will Reeves’ speech include a way of funding pay rises for higher education public sector workers? It’s doubtful.

Meanwhile in the Sunday Mirror today, Secretary of State for Business and Trade Jonathan Reynolds confirms that he will ask the Low Pay Commision to factor in the cost of living when calculating the suggested level of the minimum wage, under a new remit to be announced on Tuesday.

On the assumption that the current National Living Wage therefore becomes more like the Real Living Wage, we can assume the increase will be worth about 50p an hour.

Will Reynolds remember to find a way of funding pay rises for casual and student staff on the minimum wage being paid by universities and their SUs? It’s doubtful.

He will also instruct the LPC to narrow the gap between the minimum wage rate for 18–20-year-olds and the National Living Wage as a “first step” towards removing the lower rate for younger staff. Will those increases be funded? It’s doubtful.

The increase to the minimum wage is interesting because the Welsh student maintenance package is linked to the minimum wage – undergraduates can borrow 37.5 hours x 30 weeks. But it was struggling to afford that last year.

And let’s remember that in England, Phillip Augar’s recommendation was to use that 37.5 x 30 confection for maximum maintenance, albeit means tested. If we used the Real Living Wage this September, students outside London and away from home on the lowest incomes would be able to borrow £13,500.

They’ll actually be able to borrow just £10,227 – and a smaller percentage get to borrow that every year given the household income threshold over which it starts to taper down has been stuck at £25,000 since 2007.

And I’ve not even mentioned the state of Masters’ loans or the standard stipends issue that UKRI is wrestling with.

These are all early tests for the new government on whether it will forget about students and universities when other departments make decisions. Let’s hope not.