The government has announced pay rises for police and prison officers which breach the 1% public sector pay cap.
Prison officers will get a 1.7% rise while police will get a 1% pay rise plus a 1% bonus for the year, paid for from existing departmental budgets.
No 10 also signalled the end of the 1% pay cap, saying they recognised the need for more flexibility in future.
But the TUC said the pay rises being offered were “derisory” and would not address staff shortages.
And Steve White, chairman of the Police Federation of England and Wales, warned the announcement will leave many officers “angry and deflated”.
“We were not greedy in what we asked for,” Mr White added. “Officers have been taking home about 15% less than they were seven years ago.”
The federation had asked for a 2.8% increase to basic pay, while the Prison Officer’s Association had called for a 5% increase.
The announcement of the settlements for England and Wales from the government came on the day UK inflation rose to 2.9%.
The BBC’s assistant political editor Norman Smith said pay restraint had been the “backbone” of the Conservatives’ austerity agenda since 2010 and Tuesday’s move was symbolically very significant.
But he said the size of the increase, and how it would be paid for, was likely to be highly controversial.
How much will it cost?
By Anthony Reuben, BBC Reality Check
The government has decided to lift the 1% pay cap on the public sector, although at the moment we don’t know by how much, except for the police and prison officers.
How much it would cost is a tricky question. In the case of the police and prison officers, the money is apparently coming from existing budgets, but that means that there will have to be cuts elsewhere or reserves will be run down.
The Institute for Fiscal Studies reckons that an extra 1% pay for the entire public sector would cost about £1.8bn a year, although it would get some of that back in income tax and National Insurance.
But there are other savings that need to be taken into account, for example, some have argued that raising pay in the NHS would stop staff leaving and reduce absence, so reducing the use of more expensive agency staff and saving money.
The Treasury announcement comes after weeks of speculation the five-year pay cap may be lifted in response to growing worries about its impact on staff recruitment and retention and morale in the public sector.
Chancellor Philip Hammond had been expected to address the issue in his Autumn Budget amid calls from Labour, and some Tory MPs, for help for million of workers who have suffered years of real-terms pay cuts.
Public sector pay was frozen for two years in 2010, except for those earning less than £21,000 a year, and since 2013, rises have been capped at 1% – below the rate of inflation.
The higher increases for rank-and-file police and prison officers, which are backdated to 1 September, are based on the most recent recommendations of independent pay review bodies. However, the pay rise will have to be taken from existing department budgets.
Treasury minister Liz Truss said hard-working public sector workers deserved to be “fairly rewarded”.
While pay discipline would need to continue for many years, she said, ministers would give special consideration in future awards to areas of the public sector where there were staff shortages.
She added: “We will continue to ensure that the overall package for public sector workers recognises their vital contribution and ensures that we can deliver world class public services, while also being affordable and fair to taxpayers as a whole.”
Although next year’s pay settlements for other parts of the public sector, such as the NHS, have yet to be decided, a No 10 spokesman confirmed that the existing pay cap was at an end.
However, the pay boosts are still below the level of inflation, which measured by the Consumer Prices Index rose to 2.9%, from 2.6%, in August. The figure is the joint highest in five years.
‘Asking for justice’
The Prison Officers Association said its members had “endured” a £4,000 cut in their pay since 2010 and would not tolerate any further cuts to their living standards.
Speaking before the Treasury’s announcement, the association’s general secretary Steve Gillan said any below-inflation pay rise would be unacceptable as its members played a “vital role in keeping society safe” and had to feed their families and pay their mortgages.
“We are not asking for any special favours, we are asking for justice”.
TUC general secretary Frances O’Grady said “this below-inflation pay offer is pathetic”.
“Public sector workers have suffered seven long years of real pay cuts, and are thousands of pounds worse off. Today’s announcement means bills will continue to rise faster than their wages.”
Unison said it was a “tiny step in the right direction but not nearly enough”.
The head of Unite, Len McCluskey, has warned that unions could stage a mass walkout over pay later this year, even if the legal thresholds for industrial action in strike ballots are not met.
Ministers have also been warned that they need to fund the pay rise in full since police forces have budgeted for a 1% rise and without extra money, jobs are at risk.
Liberal Democrat leader Sir Vince Cable said: “It is good to see the government finally recognise that the public sector pay cap is no longer sustainable.
“The cap must now be lifted across the board so all public sector workers are given the pay rise they deserve.”