Shared Commitment to Addressing Public Sector Pay Erosion through Constructive Engagement

HM Government of Gibraltar and all public sector Unions acknowledge the genuine concerns that have arisen in recent years regarding the erosion of public sector purchasing power, driven by global inflation and successive economic shocks. All parties agree that this reality must be addressed responsibly and collaboratively, in the interests of public servants and the wider community.

The parties recognise that this year’s public sector pay award, announced in the 2025 Budget, represents only the beginning of a process to correct that imbalance. Nonetheless, it is an important step: the second largest public sector pay rise in Gibraltar’s history. It is also agreed that the parties would have wanted the 2025/26 proposal to go further, had financial constraints not limited scope.

While constitutional and fiscal constraints restricted the breadth of consultation in this year’s process, all parties recognise the need for deeper, earlier engagement in future. The Unions have been briefed on the Government’s intention to approach public sector pay over a longer horizon and have welcomed the commitment to sustained, structured dialogue.

To that end, all parties commit to a clear timeline of constructive monthly meetings, beginning in September 2025 and continuing up to the 2026 Budget session, with the shared goal of restoring real-terms value in public sector pay. A revised roadmap of milestones will be shared and agreed with the Unions, forming the basis of future negotiations.

Above all, all parties remain committed to ensuring that Gibraltar’s public servants are supported, valued, and fairly rewarded for the vital work they do, now and in the years to come.