Nicola Sturgeon will scrap the one per cent cap on public sector pay rises when she sets out her legislative plans for the year ahead, according to reports.
The SNP Leader will announce the measure on Tuesday when she reveals her 2017-2018 programme for government.
Earlier this year, the SNP announced the pay cap would be lifted to ensure public sector workers get a “fair deal”.
Speaking to the Sunday Herald, a Scottish government source said: “The programme for government will make clear that the time has come to ditch the one per cent pay cap for the public sector.
“The cap will go from next year and future pay policy will take account of the cost of living.
“We need to ensure that future pay rises are affordable, but we also need to reflect the circumstances people are facing, and recognise the contribution made by workers across the public sector.”
The interim Scottish Labour party leader, Alex Rowley, described the move as a welcome “U-turn”.
The UK Government is under pressure from Jeremy Corbyn’s party to ease pay restraint for public sector workers.
A Labour bid to scrap the pay cap for NHS Scotland staff was defeated in Holyrood in May.
The First Minister will also announce reforms in health, education and a “bold” vision for the economy.
Ms Sturgeon will also set out “significant” measures to improve the quality of housing and protect the environment.
Ahead of the announcement, Ms Sturgeon said: “This programme for government is our plan to shape the kind of Scotland we all seek – an inclusive, fair, prosperous, innovative country, ready and willing to embrace the future.
“It includes major reforms in education, health and justice, new opportunities for our communities and important measures to safeguard the environment and improve the quality of housing.
“Crucially, this programme for government also sets out a bold and forward-looking economic vision – sending a clear message to our people, businesses, schools, colleges and universities, and to the wider world: Scotland’s ambition is to be the inventor and the producer, not just a consumer, of the innovations that will shape the lives of our children and grandchildren."
Additional reporting by PA
