The rate NHS staff can claim for travel expenses is to be reduced by almost 20 per cent, which NHS Employers estimates would save the service £20m annually, HSJ has learned.

NHS Employers has confirmed the rate for travel reimbursements will be cut from 67p to 54p per mile from 1 July. The change is being made under a deal with NHS trade unions agreed last year, which came into effect on 1 April.

Under the deal, travel expenses are being tracked and compared every six months to estimates by the AA Motoring Costs guide. It has recently reported a reduction, due to a downward trend in car insurance cost, and vehicles’ loss of value.

The changes apply to more than one million staff under the Agenda for Change pay framework, but do not cover medical staff, who have a separate arrangement.

NHS Employers chief executive Dean Royles said: “This is one of those win-win agreements. Employees are now paying less for work related travel due to reductions in motoring costs.

“As a result, employers will pay fair, reduced expenses and will be able to reinvest savings back into patient services, helping the NHS and its staff manage significant demands on the NHS.”