NHS unions have received a new pay offer and an announcement is expected this afternoon, Sky News understands.

The offer is believed to centre around a one-off payment this financial year and a revised pay offer for 2023-24.

It follows progress in talks involving unions representing nurses and ambulance staff, after mass strikes across the NHS led to the cancellation of thousands of hospital appointments.

The Royal College of Nursing (RCN) last month agreed to suspend industrial action while it entered into “intensive” negotiations with ministers.

Cost of living latest: NHS unions offered new pay deal

Unison, GMB and Unite also agreed to halt strike action by ambulance workers this month, saying they had been assured there was additional investment available for pay rises this year and next year, outside the current budgets.

Hunt teased government’s ‘more generous offer’

Chancellor Jeremy Hunt was optimistic of a breakthrough on Thursday, telling Sky News that pay negotiations were making “encouraging progress”.

He also said the government is willing to make a “more generous offer” to public sector workers taking industrial action, as long as any settlement is not inflationary.

“We will only offer what we can afford to fund. But what we’ve said is that we are willing to make a more generous offer than was settled by the independent processes last year, providing it’s not inflationary,” he told Times Radio.

“We’re working very hard to find a solution that is acceptable to the unions. I think those discussions are going very well. But nothing has been announced yet.”

Union members will need to agree to the proposed pay rise before the strikes are officially called off.

Earlier this month, the Department of Health and Social Care told the NHS pay review body, which recommends how much all health workers should be paid, a maximum pay rise of 3.5% for 2023-2024 would be affordable.

The government is now expected to go above this offer for the next financial year on top of offering a lump sum for the current financial year – which has been at the heart of the dispute.

Steve Barclay, the health secretary, has been arguing for a one-off payment for nurses for months but was met with pushback from Number 10, Sky News understands.

The RCN was originally calling for an above-inflation pay rise of 19.2% as nurses said they have had a real-terms pay cut of 20% since 2010, but its leader Pat Cullen said she was willing to meet the government “halfway” at around 10%.

Tens of thousands of nurses from the RCN went on strike for the first time in their more than 100-year history just before Christmas, then again in January and February.

The move in England to suspend walkouts followed a similar postponement in Wales.

In Scotland, NHS nurses have been offered a 6.5% pay rise, plus a lump sum payment, for 2023-2024.

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The IFS director, Paul Johnson, says there was nothing in Jeremy Hunts budget on public sector pay

‘Money will have to be found’

Many other disputes are still ongoing, with junior doctors staging a three-day strike in England this week in a separate row with the government over pay.

The British Medical Association (BMA) wants pay restoration as it says the wage for junior doctors has fallen 26% since 2008-09, with newly qualified medics making less than a barista in a coffee shop.

The government has said that is “completely unaffordable”, but the independent Institute for Fiscal Studies has warned it will have to find money from somewhere to increase public sector pay or face consequences in its services.

Speaking after analysing Mr Hunt’s spring budget, IFS director Paul Johnson said the government’s argument there was no money was “implausible” after expensive measures, like a boost to childcare, were announced in the budget.

He added: “You can’t keep cutting the pay of teachers, nurses and civil servants, both in real terms and relative to the private sector, without consequences for recruitment, retention, service delivery, morale and – as we have seen yesterday and today – strikes.

“Money will have to be found from somewhere.”

Despite taking place against the backdrop of mass strikes, Mr Hunt’s budget made no mention of the ongoing public sector pay disputes.

Unions accused him of “sticking two fingers up to workers” after he announced tax cuts for wealthy pensioners, having insisted the country can’t afford to pay key workers more.