THE public sector pay rise in Glasgow will be worth almost £100m to workers in the city.

Finance Secretary, Derek Mackay, lifted the pay cap that has been in place for nearly a decade in his budget this week.

Glasgow has the highest concentration of public employees in Scotland, working in the council services, schools and the health service.

There are 125,000 public employees in the city according to official government statistics.

The average earnings is £25,480 for public staff in Glasgow with the majority at the lower end of the earnings scale, who will receive the 3% rise.

It means the pay rise is worth on average £764 a year taking the total cash increase to £95.5m for staff in the city.

The extra cash in pay packets could help boost the city’s economy but unions and business leaders warn that other pressures could reduce the impact of the increase.

Mr Mackay said in his budget speech that the the policy of 3% for workers under £30,000, and 2% for those above up to £80,000 will be “the framework applied to public sector pay negotiations”

Unions have said this means is not yet completely certain all the workers will get the full pay rise.

Brian Smith, Unison Glasgow, branch secretary, said: “We don’t yet know if the money will come to everyone.

“For council staff that is subject to negotiations between council bosses and unions, although politically it would be difficult not to apply it.

“If it does apply then it’s a better pay policy than before but it is still just below the current standards of living.

“It is better than last week but it doesn’t address the current cost of living.”

The health service is the biggest public sector employer in the city across hospitals, health centres and GP practices.

Nurses leaders welcomed the extra cash their members would have to spend but warned other tax changes could take the extra cash back from some.

Theresa Fyffe, Royal College of Nursing Scotland Director , said: “The Scottish Government has clearly listened to nursing staff who’ve been campaigning for fair pay.

“The announcement will go some way to addressing the years of pay restraint, however, we have yet to see the detail on how this pay award will be funded.

“We have been clear that the NHS cannot be expected to fund this from existing budgets.

“We also have to understand the implications of changes to income tax on members to be clear on the real benefit of the proposed increase.”

Business leaders said while some will get a welcome pay rise the impact on the economy could be neutral.

Stuart Partick, chief executive of Glasgow Chamber of Commerce said: “ The higher paid staff will be giving back much of the pay rise in tax increases and many private sector workers will see a tax rise too so will be spending less.

“It is a standstill budget. It looks like what is being given with one hand is being taken with the other.”

The pay rise however will put strain on the council budget as the cash for a pay increase has to come from the council budget.

It is estimated that it could cost between £20m and £30m a year for the council likely to wipe out any reduction in the level of cut to the budget grant it receives.

It will certainly be more than the amount raised by a maximum £3% council tax rise which will only generate around £7m.

The City Council has been planning for cuts of around £60m and it is not expected to fall significantly enough to avoid cuts.

James Kelly, Glasgow Labour MSP echoed the union’s concern.

He said: “Buried in the small print it turns out that around 243,000 public sector workers, are not guaranteed a pay rise.

“Derek Mackay seems to expect councils to deliver a real-terms pay rise when he is slashing their budgets.”

Meanwhile the Scottish Fiscal Commission (SFC) said a combination of slow wage growth and inflation meant that real household disposable income is unlikely to increase until 2020-21.