The proposal for National Health Service (NHS) workers includes a one-time bonus worth 2% of salary for 2022-23, along with an “NHS backlog bonus” worth at least £1,250 per person, the Department of Health and Social Care (DHSC) said in an emailed statement.

Trade unions including the Royal College of Nursing, Unison and GMB will recommend the offer to their members. The Unite union said it could not endorse the offer, but would let members decide. Strike action will continue to be paused during talks with members.

Ministers want to draw a line under months of damaging NHS industrial action, which has seen close to 150,000 appointments cancelled so far. An agreement would boost Prime Minister Rishi Sunak’s government ahead of a general election expected next year.

Asked by LBC’s Andrew Marr whether he thought the NHS pay offer was inflationary, Chancellor of the Exchequer Jeremy Hunt said: “I don’t.” The rise “will allow inflation to follow its downward trajectory”, Hunt said.

But the offer raised questions over government funding, and whether the deal would result in a spending squeeze for the NHS at a time of crisis.

“There must be a risk that the NHS is asked to make heroic efficiency savings to absorb these costs, struggles to do so, and instead has to be bailed out in six months or a year’s time,” Ben Zaranko, senior research economist at the Institute for Fiscal Studies think tank said in a statement.

‘Fair deal’

The plans relate to about 1 million staff on the so-called Agenda for Change contract, which covers nurses, ambulance workers, midwives, physiotherapists, porters, cleaners and other workers. Doctors were not involved in the talks as they are on different pay contracts.

“I’m really pleased that after several weeks of constructive talks, the government and the Agenda for Change unions have come to an agreement that will provide a fair deal for NHS staff and put disruptive strike action behind us,” Sunak said in an emailed statement.

Mick Lynch, leader of the RMT transport union, said earlier on Thursday that resolving a dispute in the NHS could “set the tone for settlements in other sectors”.

Train services were disrupted across the country on Thursday, in a week in which junior doctors, teachers, civil servants and London Underground workers also walked out in protests over pay.

Unions Divided

In its statement, the DHSC said the package would see a newly qualified nurse’s salary go up by more than £2,750 from 2021-22 to 2023-24. On top of this they would also receive over £1,890 in one-off payments this year, the department said.

Before Thursday’s offer of a 5% pay rise for next year, the DHSC had only publicly recommended a 3.5% increase.

“The government was forced into these negotiations and to reopen the pay award as a result of the historic pressure from nursing staff,” RCN general secretary Pat Cullen said in an emailed statement. “Members took the hardest of decisions to go on strike and I believe they have been vindicated today.”

Unison’s head of health Sara Gorton said in a statement that the offer would “boost pay significantly this year and mean a wage increase next year that’s more than the government had budgeted for”.

But Unite general secretary Sharon Graham said the government was showing “disdain” for NHS workers. “The offer from government is not one that Unite can recommend to our members, but ultimately it is important that our members make the final decision,” she said in a statement.