The Treasury Department warned that the increase in NHS employees' compensation must be paid from the existing budget and paid from the existing budget.

An independent independent compensation review body is reportedly provided for teachers and NHS staff in England, which will report a higher salary increase recommendation than the ministers have suggested.

Both the NEU and NASUWT Teaching Union threaten the strike if the school does not have additional funds to pay for teachers’ salary increases. Royal Nursing College (RCN) also warned that it will not accept salary awards for resources from the frontline.

However, the Guardian learned that the Treasury said it would be unclearly funding the increase in pay through borrowing, which means that the additional salary increase must come from cutting to other budgets.

Government sources said the government had a precedent to accept recommendations from the compensation review agency but did not make a final decision.

"Unlike the previous government, we are not going to get more money from the market to pay for these things," one source said.

If Rachel Reeves' budget exceeds the budget's consent, then unions can still strike if the Treasury insists that this rises from existing schools or NHS budgets.

It is understood that there are two compensation review agencies, one for teachers’ compensation agency and one for NHS employees’ salary, which is higher than the 2.8% compensation reward of the government budget. This will be about 4% for teachers, compared to about 3% for NHS staff, according to The Times.

Keir Starmer said he hopes the government can work with NHS staff to find a pleasant solution to avoid strike action. When asked about the possibility of a strike, he said: “I don’t want to see a strike action, I don’t think anyone wants to see a strike action.

"Of course, here we are in a healthcare environment and all the employees are working very hard. The last thing they have to do is to have a dispute again. We settled the dispute, and we are working with the NHS. That's because the way we work with the NHS allows us to put the waitlist down and make other announcements today."

"I think what we're proving here is - I hope we prove - if you work with NHS staff, you'll get better results than the last government that fights them. So we put doctors and nurses on the frontline, not pickets, and not a better way for everyone to think everyone likes to do business."

The government's initial budget in December was strongly criticized by trade unions. The British Medical Association has said it was a "salary erosion" for medical staff, unanimously calling it "almost higher than the cost of living".

As one of her first actions as prime minister, Reeves accepted the recommendation of the compensation review agency to increase the 5.5% in all public sector occupations, stressing that at the time “the cost of non-settlement is the cost of further industrial action, which is the challenge we face in recruiting retained doctors and nurses and teachers and the challenges of good recruitment.”

Nursing Minister Stephen Kinnock confirmed on Monday that the government has received recommendations. “We are all about putting more money into the workers’ pockets, but we also have to make sure we keep a balanced book and we have to work on the payroll in the public sector,” he said.

"So, of course, we will consider these suggestions carefully. But, of course, I also urge colleagues in our union movement to interact with us constructively and recognize the reality of financial situation."

A HM Finance spokesperson said: “Just as we are considering part of the usual process recommended by the independent compensation review agency, we will respond in due course.

“Last year, the government accepted a comprehensive advice from an independent compensation review agency, providing the first meaningful real clause in several years.”

Both Unison and RCN said they were consulting members about votes on industrial action.

"This level of reward will leave things powerless. We need direct negotiations with the government, rather than the regular payroll review agency process for the era payroll reward. Any payroll reward must be fully funded, so keeping resources away from frontline services is bad for employees and patients, and bad for patients."

“There are so many ministers who need to show that they value the workforce,” said Unison Health Head Helga Pile.