The government is considering adopting a system where pay of people like teachers and nurses is linked to the cost of living, and private sector pay, in the area where they live.

But there are already signs that putting such an idea into practice will not be easy. A separate plan by a consortium of NHS Foundation Trusts to consider regional pay and conditions has already run into fierce opposition from the unions.

A group of 20 hospitals are considering new ways to cut budgets and avoid losing about 6,000 jobs in south west England.

Nigel Edwards of the King's Fund told the Today programme's Nicola Stanbridge that he believed the consortium run the risk of "opening pay inequalities within their organisation".

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