Government workers have been presented with a new - and final - pay offer in a bid to break the deadlock.

The move comes after a three-year pay deal was rejected by members of the Prospect and Unite unions.

It was the third offer to be rejected and would have involved a 4% increase this year, followed by 2.5% next year and 2% in 2026-27.

Now the Public Services Commission (PSC) has tabled a new, two-year deal - and says this will be its final offer.

It follows a meeting with Prospect and Unite the Union last week when it was acknowledged that the last offer was rejected due to members’ concerns regarding the third year, suggesting it might result in an increase below inflation.

In a statement, the PSC said it ‘respectfully disagreed’ with that view, and the stringent conditions outlined in the offer for the third year would have provided ‘financial clarity for both staff and accounting officers’.

But it added: ‘Nevertheless, the Commission has decided to present a new, two-year offer.

‘This decision reflects the Commission’s desire to find a resolution as quickly as possible, particularly since staff have not received any pay increase for the current year.

‘Moreover, accounting officers are increasingly finding it challenging to engage in effective financial planning.’

The PSC is proposing to make a final offer to increase the salary of PSC employees by 4% in 2024-25 and 2.5% in 2025-26.

These percentage increases would apply to certain allowances and local agreements.

The PSC said it had favoured a three-year deal, which it said had provided financial clarity. As a result, it had been willing to offer a higher percentage than what was budgeted for in year two.

‘Changing to a two-year deal means that this assurance has been removed and therefore the two-year offer is less attractive to the Commission,’ it said.

‘Consequently, any revised offer for a shorter period must sit within the budgetary provisions and be more affordable.’

In addition, the PSC plans to harmonise the annual leave entitlement for all PSC staff who accrue 10 years’ service, taking it from 28 days to 30 days per year as from April this year.

It has also agreed to establishing a joint working group with Prospect and Unite to look at some of the broader and more complex issues in regard to PSC terms and conditions and policies.

The PSC said it is unable yet to provide a firm date for the payment of arrears but expects this to be processed in January, February, March, or possibly April.

Prospect and Unite have been advised of the PSC’s revised offer and the PSC said it would like the unions to progress to a ballot.