Workers on Agenda for Change contracts have been told that the government has agreed the recommendation from the NHS Pay Review Body for a 3.3% pay increase for the 2026/27 annual pay review.

Health minister, Wes Streeting, said: ‘We have listened to the workforce and understand the difficulties they face when pay awards are not delivered on time.'

In response, Dean Royles, interim chief executive of NHS Employers, said: ‘This early acceptance by the government of the Pay Review Body's recommendations will ensure that for the first time in many years, all NHS Agenda for Change staff will receive their annual pay uplift at the very start of the pay year in April. In previous years it has been as late as September or October, so this will be welcomed by many. A fair and timely award is also essential for retaining experienced colleagues and attracting new talent into the NHS.

‘However, NHS employers continue to navigate an increasingly challenging financial environment while maintaining high-quality patient care. NHS trusts are right now in the midst of submitting their medium-term financial, service and workforce plans. They will have prepared for the award being less than the 3.3% that has been announced, so it is essential that the funding of the award is clarified as soon as possible.'

The announcement has come under fire from healthcare unions, who highlight that with the RPI rate of inflation standing at 4.2%, the pay increase amounts to substantial real terms pay cut.

In response, Unison head of health Helga Pile, said: ‘Hard-pressed NHS staff will be downright angry at another below-inflation pay award. Yet again, they're expected to keep delivering more while effectively being given less, as pay slides behind living costs. Having an increase on time for once is only small comfort.'

She added: ‘Ambitions to make the NHS the country's best employer'are doomed to fail if it can't even compete with high street supermarkets whose staff are on at least the real living wage.

‘Nurses, healthcare assistants, occupational therapists, ambulance staff, porters and all the other essential health staff need proper investment in their pay.'

Unite has also denounced the latest pay "deal" imposed by government. General secretary Sharon Graham said: ‘It beggars belief that a Labour government should seek to ride roughshod over the health unions when deciding on NHS pay. For too long, NHS workers have been overworked, underpaid and undervalued.

 ‘Today's announcement will simply increase the problems of low pay that has seen thousands of healthcare workers leave, worsening the recruitment and retention crisis in our NHS.'

She added: ‘Unite is very concerned over rumours that there is a separate negotiated settlement separately for junior doctors. No details exist, but if this is better than for Agenda for Change staff, this is a major issue that will simply heighten anger in the sector and increase the risk of industrial action. Unite will not stand by and allow our members to become part of a two-tier system.'

RCN general secretary and chief executive, Professor Nicola Ranger, said: ‘A pay award below the current level of inflation is an insult. Unless inflation falls, the government is forcing a very real pay cut on its NHS workers. This knife-edge gameplaying is no way to treat people who prop up a system in crisis.

‘We will compare and contrast this announcement with the awards for the rest of the NHS and the public sector as a whole before deciding a way forward. Nursing staff will not tolerate the disrespect of other years, when we were bottom of the pile.'