Changing the pay rates of public sector workers, including NHS staff, to reflect regional differences would be an "unworkable, divisive nightmare", union leaders warned on Sunday.

Unison said health workers were already suffering a pay freeze, job and budget cuts as well as huge reorganisation in the wake of the Government's controversial health reforms.

In evidence to be submitted tomorrow to the NHS pay review body, Unison will say: "The current UK-wide pay system, which sets a floor pay rate for the NHS and allows for adjustments in high cost areas or local areas with particular recruitment difficulties has proven itself as a robust, effective pay system that adequately follows geographic variations in the UK labour market."

The government is pressing ahead with plans to introduce regional pay in the public sector, sparking union warnings of massive wage cuts for employees in some parts of the country.

Unison, which holds its annual health conference in Brighton this week, said the current pay system, Agenda for Change, took many years to develop and implement and was recognised as the tool to deliver fair pay.

Christina McAnea, Unison's head of health, said: "The Department of Health's evidence on regional pay is built on sand. For a government that says it wants to cut paperwork, introducing regional pay would be a massively expensive, bureaucratic nightmare, designed to cause huge disruption and conflict.

"Regional pay would cause skills shortages in so-called low cost areas with nurses, midwives and specialised staff being hard to recruit and retain, hitting the care of patients.

"The government wants to introduce a market ethos into the NHS but most private companies abandoned regional pay scales years ago as divisive and unworkable.

"The NHS is already struggling to find billions in so-called efficiency savings and with no extra money promised to fund higher cost areas, the money would have to come from existing budgets."

Unison will say in its submission: "Market-facing pay would lead to a reduction in public sector pay in some areas of the UK and further entrench low pay in those areas. Reducing public sector pay will not stimulate economic growth but take demand out of the economy.

"Private sector labour markets do not provide an appropriate framework on which to map NHS pay. Modelling NHS pay on private sector pay outcomes would replicate the private sector's market failures, distortions and inequalities. These failures have led to rapidly rising income inequality and a gender wage gap.

"The differential between highest and lowest earners and between men and women is larger in the private sector than the public sector. Income inequality has also grown between London and the rest of the country over the last decade.

"Reducing NHS pay rates in low income areas will widen this gap as the private sector competes for staff in a labour market with a reduced 'going rate.'

"NHS staff have already borne the brunt of a pay freeze, face further pay restraint and pensions reforms. NHS staff morale and motivation have been harmed by these policies, as well as fears over job security. More attacks on pay and conditions will do further damage - and will impact on recruitment and retention."

Andy Burnham, Labour's shadow health secretary, who will address Unison's conference this week, said the Government's plans were "flawed on every level", adding: "First, it fails the economic test, making it harder to control costs and reinforcing the North-South divide.

"Second, it fails the heath policy test. Differential pay will bring instability to the NHS, with the risk of one area poaching staff from another. It makes it harder to bring the best staff to the more deprived parts of the country where the health challenge is often greatest.

"Third, it fails the fairness test. Paying people differently for the same work is difficult to justify. Indeed, it is often harder to work on the NHS front-line in more deprived parts of the country.

Welsh Labour Health Minister, Lesley Griffiths, said: "Our stance on introducing regional pay is clear - we do not support it. We view it as Tory code for cutting the pay of NHS workers in Wales.

"The Tory-led UK Government has given the NHS Pay Review Body a remit to consider the introduction of regional pay for NHS staff in England.

"However, in a joint letter with the Scottish Government, I have recently informed the NHS Pay Review Body that we will not be providing a remit to them to consider this issue for Wales."