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Doctors and teachers will be given a 4% pay rise after the government accepted recommendations from independent review bodies.

The salary increases, announced by ministers on Thursday afternoon, are 2.8% above what the government had originally budgeted for.

The 4% rise is just above the current rate of inflation, which increased from 2.6% in March to 3.5% in April.

It will apply to all doctors and teachers in England and Wales.

But both the British Medical Association (BMA) and National Education Union (NEU) have threatened further strike action following the announcement, claiming the increases do not account for historical pay freezes.

Other NHS workers in England, including nurses, midwives, and physiotherapists, will get a 3.6% pay increase effective from 1 April, Health Secretary Wes Streeting said.

He added that junior doctors would be offered an average increase of 5.4% as a result of a further £750 top-up.

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Senior civil servants will get a 3.25% pay increase, the Cabinet Office added, but there are still changes to be made to higher salary bands within the civil service.

Prison officers and managers will get the same 4% pay rise as doctors and teachers, Justice Secretary Shabana Mahmood said.

Military personnel are being offered a 4.5% rise following their own independent pay review. Senior military officers will get a slightly lower boost of 3.75%, with Defence Secretary John Healey saying the changes “recognise their dedication to keep Britain secure at home and strong abroad”.

Unions say offers are ‘woefully inadequate’

The government’s proposals on pay have been met with anger among healthcare unions, with the BMA describing its offer for doctors as “woefully inadequate”.

Professor Philip Banfield, chairman of the BMA council, said doctors are already considering striking again.

“Doctors’ pay is still around a quarter less than it was in real terms 16 years ago and today’s ‘award’ delays pay restoration even more, without a government plan or reassurance to correct this erosion of what a doctor is worth,” he said.

Other NHS workers who belong to either the Royal College of Nursing (RCN) or GMB unions are being asked to vote on whether they will accept their offers or not.

RCN general secretary and chief executive Professor Nicola Ranger warned pay increases have already been “entirely swallowed up by inflation and do nothing to change the status quo – where nursing is not valued, too few enter it and too many quit”.

Schools will have to fund 1% themselves

While education unions have been less resistant, the NEU, which is the largest teacher union, threatened to “register a dispute” with the government if it does not fund all of the pay rises itself – as they are currently being offered as part of existing school budgets, which they insist are needed for pressing matters outside staffing.

Schools will be given an additional £615m towards the pay increases this financial year, but they will be expected to find the final 1% of the 4% rise themselves – “through improved productivity and smarter spending”.

Education Secretary Bridget Phillipson said: “I believe schools have a responsibility, like the rest of the public sector, to ensure that their funding is spent as efficiently as possible.”

General secretary of the TUC Paul Nowak said further negotiations with the government would be needed to resolve outstanding issues.

He said his and other unions want to “work with the government to address the recruitment and retention crisis gripping our public services”.

“Ministers need to talk directly to unions to address the root causes behind dedicated and experienced public servants quitting their professions,” he warned.

“We need a clear, jointly-agreed long-term strategy to improve public-sector pay, alongside other crucial issues such as better working hours, more manageable workloads and enhanced flexible working options.”

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New Look owners pick bankers to fashion sale process

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New Look owners pick bankers to fashion sale process

The owners of New Look, the high street fashion retailer, have picked bankers to oversee a strategic review which is expected to see the company change hands next year.

Sky News has learnt that Rothschild has been appointed in recent days to advise New Look and its shareholders on a potential exit.

The investment bank’s appointment follows a number of unsolicited approaches for the business from unidentified suitors.

New Look, which trades from almost 340 stores and employs about 10,000 people across the UK, is the country’s second-largest womenswear retailer in the 18-to-44 year-old age group.

It has been owned by its current shareholders – Alcentra and Brait – since October 2020.

In April, Sky News reported that the investors were injecting £30m of fresh equity into the business to aid its digital transformation.

Last year, the chain reported sales of £769m, with an improvement in gross margins and a statutory loss before tax of £21.7m – down from £88m the previous year.

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Like most high street retailers, it endured a torrid Covid-19 and engaged in a formal financial restructuring through a company voluntary arrangement.

In the autumn of 2023, it completed a £100m refinancing deal with Blazehill Capital and Wells Fargo.

A spokesperson for New Look declined to comment specifically on the appointment of Rothschild, but said: “Management are focused on running the business and executing the strategy for long-term growth.

“The company is performing well, with strong momentum driven by a successful summer trading period and notable online market share gains.”

Roughly 40% of New Look’s sales are now generated through digital channels, while recent data from the market intelligence firm Kantar showed it had moved into second place in the online 18-44 category, overtaking Shein and ASOS.

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Coca-Cola brews up sale of high street coffee giant Costa

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Coca-Cola brews up sale of high street coffee giant Costa

The Coca-Cola Company is brewing up a sale of Costa, Britain’s biggest high street coffee chain, more than six years after acquiring the business in a move aimed at helping it reduce its reliance on sugary soft drinks.

Sky News can exclusively reveal that Coca-Cola is working with bankers to hold exploratory talks about a sale of Costa.

Initial talks have already been held with a small number of potential bidders, including private equity firms, City sources said on Saturday.

Lazard, the investment bank, is understood to have been engaged by Coca-Cola to review options for the business and gauge interest from prospective buyers.

Indicative offers are said to be due in the early part of the autumn, although one source cautioned that Coca-Cola could yet decide not to proceed with a sale.

Costa trades from more than 2,000 stores in the UK, and well over 3,000 globally, according to the latest available figures.

It has been reported to have a global workforce numbering 35,000, although Coca-Cola did not respond to several attempts to establish the precise number of outlets currently in operation, or its employee numbers.

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This weekend, analysts said that a sale could crystallise a multibillion pound loss on the £3.9bn sum Coca-Cola agreed to pay to buy Costa from Whitbread, the London-listed owner of the Premier Inn hotel chain, in 2018.

One suggested that Costa might now command a price tag of just £2bn in a sale process.

The disposal proceeds would, in any case, not be material to the Atlanta-based company, which had a market capitalisation at Friday’s closing share price of $304.2bn (£224.9bn).

At the time of the acquisition, Coca-Cola’s chief executive, James Quincey, said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide.

“Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand.

“Costa gives us access to this market with a strong coffee platform.”

However, accounts filed at Companies House for Costa show that in 2023 – the last year for which standalone results are available – the coffee chain recorded revenues of £1.22bn.

While this represented a 9% increase on the previous year, it was below the £1.3bn recorded in 2018, the final year before Coca-Cola took control of the business.

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Coca-Cola has been grappling with the weak performance of Costa for some time, with Mr Quincey saying on an earnings call last month: “We’re in the mode of reflecting on what we’ve learned, thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the Costa business successfully.”

“It’s still a lot of money we put down, and we wanted that money to work as hard as possible.”

Costa’s 2022 accounts referred to the financial pressures it faced from “the economic environment and inflationary pressures”, resulting in it launching “a restructuring programme to address the scale of overheads and invest for growth”.

Filings show that despite its lacklustre performance, Costa has paid more than £250m in dividends to its owner since the acquisition.

The deal was intended to provide Coca-Cola with a global platform in a growing area of the beverages market.

Costa trades in dozens of countries, including India, Japan, Mexico and Poland, and operates a network of thousands of coffee vending machines internationally under the Costa Express brand.

The chain was founded in 1971 by Italian brothers Sergio and Bruno Costa.

It was sold to Whitbread for £19m in 1995, when it traded from fewer than 40 stores.

The business is now one of Britain’s biggest private sector employers, and has become a ubiquitous presence on high streets across the country.

Its main rivals include Starbucks, Caffe Nero and Pret a Manger – the last of which is being prepared for a stake sale and possible public market flotation.

It has also faced growing competition from more upmarket chains such as Gail’s, the bakeries group, which has also been exploring a sale.

Coca-Cola communications executives in the US and UK did not respond to a series of emails and calls from Sky News seeking comment on its plans for Costa.

A Lazard spokesperson declined to comment.

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TikTok puts hundreds of UK jobs at risk

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TikTok puts hundreds of UK jobs at risk

TikTok is putting hundreds of jobs at risk in the UK, as it turns to artificial intelligence to assess problematic content.

The video-sharing app said a global restructuring is taking place that means it is “concentrating operations in fewer locations”.

Layoffs are set to affect those working in its trust and safety departments, who focus on content moderation.

Unions have reacted angrily to the move – and claim “it will put TikTok’s millions of British users at risk”.

Figures from the tech giant, obtained by Sky News, suggest more than 85% of the videos removed for violating its community guidelines are now flagged by automated tools.

Meanwhile, it is claimed 99% of problematic content is proactively removed before being reported by users.

Executives also argue that AI systems can help reduce the amount of distressing content that moderation teams are exposed to – with the number of graphic videos viewed by staff falling 60% since this technology was implemented.

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It comes weeks after the Online Safety Act came into force, which means social networks can face huge fines if they fail to stop the spread of harmful material.

The Communication Workers Union has claimed the redundancy announcement “looks likely to be a significant reduction of the platform’s vital moderation teams”.

In a statement, it warned: “Alongside concerns ranging from workplace stress to a lack of clarity over questions such as pay scales and office attendance policy, workers have also raised concerns over the quality of AI in content moderation, believing such ‘alternatives’ to human work to be too vulnerable and ineffective to maintain TikTok user safety.”

John Chadfield, the union’s national officer for tech, said many of its members believe the AI alternatives being used are “hastily developed and immature”.

He also alleged that the layoffs come a week before staff were due to vote on union recognition.

“That TikTok management have announced these cuts just as the company’s workers are about to vote on having their union recognised stinks of union-busting and putting corporate greed over the safety of workers and the public,” he added.

Under the proposed plans, affected employees would see their roles reallocated elsewhere in Europe or handled by third-party providers, with a smaller number of trust and safety roles remaining on British soil.

The tech giant currently employs more than 2,500 people in the UK, and is due to open a new office in central London next year

A TikTok spokesperson said: “We are continuing a reorganisation that we started last year to strengthen our global operating model for Trust and Safety, which includes concentrating our operations in fewer locations globally to ensure that we maximize effectiveness and speed as we evolve this critical function for the company with the benefit of technological advancements.”

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