Leaders of more than a million NHS workers are to recommend a pay offer worth between 6.5% and 29% over three years.
The proposed deal, agreed at a meeting between 14 unions and NHS employers, signals the end of the Government’s controversial public sector pay cap.
Under the deal, the pay of the lowest-paid staff, such as porters and cleaners, will increase by 15%.
Sara Gorton, head of health at the Unison union, said seven years of pay restraint had led to a staffing crisis across the country.
The deal covers health workers in England but is expected to be mirrored in Wales, Scotland and Northern Ireland.
Half of NHS workers are at the top of their pay band so will receive a 6.5% increase.
The other half will get between 9% and 29%, with midwives and physiotherapists among those in line for the biggest increase.
The GMB is the only union to recommend rejection of the deal, saying it fell below the expected increase in inflation.
Danny Mortimer, chief executive of NHS Employers, said the Government will invest £4.2 billion over three years to fund the pay hike.
He said: “To support long-term attraction and recruitment, starting salaries for all our non-medical staff groups will also see increases, which will help to make these roles more attractive for people considering a career in the largest employer in Europe.”
Under the deal, hospital caterers, cleaners, porters and other staff on the lowest pay grade would get an immediate pay rise of more than £2,000 this year – an increase of between 11% and 13%.
This would mean that, from April 1, every NHS worker in England would be paid at least £8.93 an hour, which is 18p above the voluntary living wage of £8.75.
This would take the lowest full-time rate of pay in the NHS to £17,460.
Under the proposals, band one would be scrapped by April 2021 and all staff moved to the next pay scale.
The lowest salary in the NHS would then be £18,005.
Over the three years, more than 100,000 of the lowest-paid health workers would be in line for wage increases of between 15% (£2,300) and 17% (£2,600).
Unison’s Sara Gorton said the NHS was facing a staffing crisis, adding: “The agreement means an end at last to the Government’s self-defeating and unfair 1% pay cap.
“It won’t solve every problem in the NHS, but would go a long way towards making dedicated health staff feel more valued, lift flagging morale, and help turn the tide on employers’ staffing problems.
“If health workers accept the offer, everyone’s wages will go further, and the lowest paid would get a significant income boost. Starting salaries for nurses, midwives and other health professionals would also become more attractive to people considering a career in the NHS.”
Health and Social Care Secretary Jeremy Hunt said: “NHS staff have never worked harder and this deal is recognition of that – alongside some important modernisation of the way their contracts work.
“Over one million employees on Agenda for Change contracts – including the lowest paid NHS workers – will get pay rises that see their starting salary increased from £15,404 to £18,005 in 2020/2021.
“The starting salary of a nurse will rise to £26,970, which will have a significant impact on retention and recruitment issues.
“We will also extend shared parental leave rights to all staff, and employers and unions have made a commitment to reducing sickness absence through a better shared focus on staff health and wellbeing, all of which will be welcomed by staff after a very tough winter.”
Royal College of Nursing associate director of employment relations Josie Irwin said: “Members campaigned hard to put an end to the years of poor pay rises and this deal is a significant move in the right direction from a government still committed to austerity.
“When there are 40,000 unfilled nurse jobs in England alone, it should begin to make the profession more attractive to nurses of today and tomorrow alike.
“Starting salaries will be higher and current nursing staff will reach the top of their pay bands much faster than before, without changes to their leave entitlement or unsocial hour payments. With this agreement, the Government and NHS has acknowledged that the greatest rise in productivity will come from a healthy and motivated workforce.”
The GMB union, which represents thousands of ambulance crews, paramedics and other health workers, said it would recommend rejection of the deal because it was a real terms pay cut for the most loyal, longest-serving NHS workers, with RPI inflation forecast to increase by 9.6% over the next three years.
Since 2010, paramedics have lost an average of more than £14,000, midwives £18,000 and staff nurses £14,500 because of the pay cap, said national officer Kevin Brandstatter, adding: “Jeremy Hunt’s promise of jam tomorrow is simply not good enough for NHS workers who, during the past eight years, have faced the biggest pay pinch in living memory.
“Long-serving, dedicated health service workers have had thousands of pounds swiped from their pay packets since 2010 by the Government’s cruel and unnecessary pay cap.
“After all that suffering, is a below inflation pay rise the best they can offer?
“If it is, GMB will have to recommend that our members in NHS and ambulance trusts reject it.”
Unite national officer for health Sarah Carpenter said: “At long last, after years of pay austerity, there has been a significant recognition that this harsh pay regime imposed on hard working and dedicated NHS staff can no longer be sustained.
“Unite welcomes many aspects of this deal, on which we will be consulting our membership over the next couple of months. However, we regard this as the start, not the end, of the journey for true pay justice for NHS staff, which we will campaign for with vigour in the coming months and years.”
If the agreement is accepted, the extra funding for English health budgets will go through the Barnett formula into budgets in Wales, Scotland and Northern Ireland.
This will allow unions, devolved governments and employers to hold discussions on whether and how they want to implement the framework agreement for their health staff.
Health unions will now consult with their members over the pay offer, with the results known in June.
If the proposals are accepted, the pay rise should be in people’s July wage packets, backdated to April.