In case you've just joined us, here is a quick recap of public sector pay increases announced today:

• More than a million public sector workers, including teachers, doctors, and police officers, in England and Wales will receive 6% or more pay rises
• Teachers will get a 6.5% increase, while junior doctors, consultants and dentists will receive 6%, and police and prison officers will receive 7%, following the government accepting the recommendations of eight independent pay review bodies
• Rishi Sunak said it would be funded by government departments finding savings and increasing visa charges and the NHS surcharge for migrants
• He called on unions to call off strikes and said there will be no more negotiation on pay
• Labour has questioned if the government will cut money for school and hospital building to fund the increase, while the Liberal Democrats accused Sunak of taking a "wrecking ball" to public services

Hazel Shearing
Education correspondent

The government says it will give schools extra funding for the 6.5% pay rise, so it doesn't have to come out of head teachers' budgets.

That means finding an additional £525m in 2023-24 and £900m in 2024-25.

There won't be any additional spending or borrowing for this. Instead, that cash is going to come from the Department for Education's existing budget.

Where will ministers find it?

Well, the deal with the unions has been reached on the basis that money won't be taken from schools' core budgets.

So there won't be any cuts to Special Educational Needs (SEND) funding, for example, or funding needed to make sure school buildings are safe.

The National Education Union - the only one of the four unions involved this dispute that has been on strike - says the deal guarantees the extra money will not be diverted from what it called frontline services, including SEND and further education.

The Association of School and College Leaders, meanwhile, says it understands "a proportion of the money will come from unspent allocations that would normally be clawed back by the Treasury".

Right now, we know more about where the money won't be coming from, rather than where it will.

Junior doctors have begun a five-day walkout today, and two of those striking have been speaking to the BBC after the government announced what it calls its "final offer" on public sector pay by offering them a 6% rise.

It falls far short of the 35% that doctors have been demanding.

Speaking at the picket line at University College Hospital, Dr Alex Gibbs said: "Obviously, that's far off what we're asking for and I think when you consider the impact of the strike so far, I think to settle for that questions why we striked in the first place."

Dr Rebecca Lissmann, who works in maternity care, says she wants to provide excellent care but the job is intense with too many shifts unfilled. She says that "needs to change."

Hugh Pym
BBC News Health Editor

The British Medical Association has confirmed that the 6% pay award this year for junior doctors in England won't be enough to suspend their strike action.

They have pushed for a phased move towards a 35% pay rise compensating, they say, for the impact of inflation over 15 years.

Ministers have said that pay demand is unacceptable. There have been no talks in the weeks ahead of the latest strike and further negotiations seem highly unlikely.

The BMA chair of council, Prof Phil Banfield says: “This offer is exactly why so many doctors are feeling they have no option but to take industrial action, as they have suffered years of below-inflation pay awards and once again the government and the DDRB [pay review body] have both failed to address that in this year’s uplift."

Anthony Reuben
BBC News

Image source, EPA

Ministers have repeatedly warned that borrowing money to increase pay for public sector workers would increase inflation.

In the private sector there is a clear way in which putting up pay could increase prices. If a company making hats increases workers' salaries, then it may need to charge customers more in order to do so.

But that doesn't work for public sector workers, who are employed directly by the government. If teachers at state schools are paid more, for example, sending children to state schools will still be free to parents. Taxes may have to rise, but we'll return to that.

Another possible cause of inflation is the amount of demand for goods and services in the country. The idea is that if there is a fixed amount of stuff available to buy - and people have more money to spend - prices go up.

This is where these pay rises could come in to play.

But Ben Zaranko from economic think tank the Institute for Fiscal Studies says it's not a huge effect.

He estimates, external that giving a 6% pay rise instead of a 3% pay rise to the approximately 2.5 million workers covered by the pay review bodies would mean spending about £5bn. That is less than 0.2% of the size of the UK economy.

You can read more here.

Image source, PA Media

We've got some comments on the pay deals being offered from Chancellor Jeremy Hunt now, who said ministers are sending a message the government wants to "pay people who are doing a really important job - fairly".

"But we can’t fund that in an award that is inflationary. So we are not going to fund it by extra borrowing," he told broadcasters earlier, after being asked about the offers.

Peter Saull
Political Reporter

One notable feature of today’s announcement is the lack of overt criticism from Labour.

Leader Keir Starmer said the offers would be “subject to negotiation” and he would “not wade into that.”

In the Commons earlier, shadow chief secretary to the Treasury, Pat McFadden, raised concerns about the impact on public services – and the wider economic backdrop.

But no senior Labour figure has said that the party would have acted any differently if it were in government.

By accepting the recommendations from the pay bodies in full, ministers have blunted a potential line of attack; that they were ignoring a process that’s independent of party politics.

Image source, Reuters

Now for some political reaction to the announced pay rises for public sector workers.

First up: Liberal Democrat Leader Ed Davey, who has issued an impassioned statement calling on Rishi Sunak to "come clean" with the public about the "savage cuts" facing local hospitals and schools.

Green MP Caroline Lucas has also taken aim at the prime minister. "Sunak gives with one hand & takes away with another," she writes on Twitter, external. Lucas goes on to accuse the PM of inflicting "untold damage to the public services & people he claims he's helping."

Meanwhile several Tory MPs have taken to social media to sing the praises of Education Secretary Gillian Keegan and Sunak.

"Delighted to see already that strikes have been suspended and teachers can go back to doing what they love," tweets , externalStuart Anderson, MP for Wolverhampton South West. "Good news for all public sector workers, without damaging efforts to bring down inflation."

There is relative quiet on the Labour frontbench at present.

Speaking at the Unite union's policy conference in Brighton, Sir Keir Starmer said that the recommendations of the pay review bodies would be "subject to negotiation" - but added: "If Labour cannot break the suffocating hold of low wages we will have failed."

Hazel Shearing
Education correspondent

Further teacher strikes in England will be off the table if union members accept this 6.5% pay rise.

It's a big moment in a pay dispute that has been rumbling on for months. Many schools have had to close over the course of seven national strikes by members of the National Education Union since February.

With the prospect of more strikes on the horizon next term, there's been no end in sight - until now.

In a joint statement with the prime minister and the education secretary earlier, leaders of all four teaching unions said they would go back to their members and recommend they accept the new offer.

The statement says the pay rise is "properly funded", and that schools will get extra money to fund it.

That will be crucial for members considering the offer. Unions have been calling for any pay rise to be fully funded, so that schools do not have to take money out of existing budgets to pay for it.

The Department for Education says money will be reprioritised in order to make this happen. It didn't go into specifics, but said schools' core budgets would be protected.

The 7% pay increase for police officers is a step in the right direction, but still falls short, the Police Federation of England and Wales says.

​The association pointed to a report published earlier this year by the independent think tank Social Market Foundation which said police officers had endured a 17% real terms pay cut since 2000.

“It is important that government also provides new money for the pay award so that chief officers do not have to cut essential services to the public to fund it," says national chair Steve Hartshorn.

“Hearing today’s news, I have no doubt that police officers will have mixed feelings – on the one hand, they will be pleased that the pay award was not as bad as some media outlets had speculated, but also disappointed that it doesn’t fully take account of inflation, as they and their families struggle with increased utility, mortgage and food costs," he adds.

He says the association will "continue to push for fair pay awards that take full account of inflation and recognise and reward the unique status of police officers".

Almost half of public sector workers are covered by pay review bodies, including police and prison officers, the armed forces, doctors, dentists and teachers.

The pay review bodies are made up of economists and experts on human resources, with experience in both the public and private sector and are appointed by the relevant government department.

They hear evidence and then make recommendations on pay rises. Their recommendations are not legally binding, meaning the government can choose to reject or partially ignore the advice, but it is usually accepted. More here.

Image source, PA Media

The head of the Unite union - the UK's biggest union with members in both the public and private sectors,- said: "By accepting the pay review body recommendations and then not funding them, the government is putting its departments between a rock and hard place.

"They now have to choose between paying workers a half-decent salary or cutting services in already underfunded public services," said general secretary Sharon Graham.

"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."

Rishi Sunak has said he would not increase taxes or borrowing to fund the public sector pay increase, instead government departments will have to find savings. Visa charges and the NHS surcharge for migrants will also increase.

In an unusual turn of events, a joint statement has been issued, externalby the prime minister, education secretary and education unions.

They say the 6.5% pay increase for teachers and school leaders "recognises the vital role that teachers play in our country".

They also applaud the rise ensuring that teaching will "continue to be an attractive profession".

Rishi Sunak, Gillian Keegan, and the general secretaries of four education unions - the NEU, ASCL, NAHT and NASUWT - said the government’s offer is "properly funded for schools".

The statement also says:

• The government has committed that all schools will receive additional funding above what was proposed in March - building on the additional £2bn given to schools in the Autumn Statement
• The government will provide a hardship fund of up to £40m to support schools facing the greatest financial challenges
• The four unions will now put the deal to members, with a recommendation to accept it
• This deal will allow teachers and school leaders to call off strike action

Image source, Downing Street

A little earlier, PM Rishi Sunak gave a press conference at 10 Downing Street on the public sector pay rise. Here's a little recap of what he said:

• The prime minister said he accepted the pay review bodies' recommendations in full
• He said he would not fund the pay rise by borrowing more or increasing taxes, and that government departments have had to find savings
• He urged all union leaders to accept the pay offers and call off strikes
• Sunak announced all teaching unions have suspended all planned strikes and recommended to their members an end to their pay dispute
• He said today's offer is final and the government will not negotiate over pay as "no amount of strikes will change our decision"
• The prime minister describes it as a "fair deal for workers and fair deal for British taxpayers"
• He tells the BBC he will increase visa and NHS charges for migrants to help fund the rises

To help pay for the 5% pay rise for the armed forces, the government is planning to cut back on civil service recruitment in the Ministry of Defence until March 2025.

The general secretary of Prospect union - which has more than 32,000 civil service members - said: "Freezing civil service recruitment in the Ministry of Defence is a disastrous error that risks putting our nation's security at risk.

"The department already has thousands of vacancies, and many of these civil servants work directly supporting the effort to win the war in Ukraine.

"It's time the government recognised the value of its public services and allocated the money required to maintain them properly."

Our colleagues in the politics team have been looking through the written ministerial statements that have been shared.

They note that there are also some other increases:

• Senior civil servants 5.5%
• Managerial and prison governors 5%

The Labour Party is asking if this pay increase is being paid from cuts to hospital and school building programmes.

Shadow treasury minister Pat McFadden asked in the Commons: "What is the government's estimate of the impact on public services of funding the rises in this way that he has set out?"

He continued accusing the government of failing and declared the general election "cannot come soon enough".

Treasury minister John Glen replied: "The decisions we have made today mean no new borrowing, no cuts to the front line, no new taxes and no negative impact on inflationary pressures."

The pay rise for doctors will not end the dispute, nor will it retain doctors and stop them from going abroad, says the British Medical Association (BMA) chair.

“We need to sit down and see whether this will allow us to go into negotiations. It could be a reasonable starting point for us to progress the dispute," Professor Phil Banfield tells the World at One on BBC Radio 4.

He also says Rishi Sunak's statement that he would no longer negotiate shows a "fundamental lack of understanding of the situation and the dire straits the health service has been in for many years".

He went on to further criticise the government's reluctance to negotiate, saying: "I don't believe that the government is doing all that it can, what it has announced is going to pile the cost of this on to the very workers that are tasked with maintaining the public sector."

Junior doctors in England are currently staging a five-day walkout in England.

Image source, PA

Mary Bousted, general secretary of the National Education Union, told Sky News she'd be recommending members "bank" this offer.

She said: "It's the biggest pay award the independent review body has ever made and importantly we've secured guarantees on how it will be funded, which means frontline services will not be affected

Bousted said the latest offer of 6.5% was the "biggest pay rise they've had in years" although it was still below inflation, and did not rule out future strike action.

She said: "We will continue to campaign for teachers to gradually restore their pay to the levels they were at in 2010... This is a good start... But we would never rule out strike action in the future.

"If members accept this deal then the dispute we have currently with the government on pay is over for this year. That's the end of this dispute, yes."

Prime Minister Rishi Sunak said the rises would not be funded by borrowing more or increasing taxes.

The chief secretary to the Treasury, John Glen, said schools will receive an additional £525m in 2023-24 and £900m in 2024-25 to cover the costs and this money will come from within the department's existing budget.

Asked where the money would come from to fund others, Sunak said he would be asking government departments to re-prioritise their focus on pay - raising fears of cuts across public services.

He also said the government would raise over £1bn by "significantly" increasing charges for migrants coming to the UK when they apply for visas and the levy they pay to access the NHS.

Glen told MPs the government would cut back on civil service recruitment in the Ministry of Defence until March 2025 to help fund the rise for the armed forces.