NHS staff should be denied any pay rise until an agreement is reached to renegotiate terms and conditions for more than 1.3 million workers, the Department of Health has said.

In an unexpected move, NHS pay review bodies have been asked to tie any pay rise in 2014 to changes in national pay contracts for staff covered by the Agenda for Change pay framework, as well as doctors and dentists.

The department wants to amend staff contracts in order to make them more affordable. Changes to bring in more seven day working, as well as crack downs on out of hours pay enhancements, sick pay and incremental salary rises have previously been mooted.

However, the length of time required for NHS Employers and unions to reach agreements on starting negotiations would make it impossible for staff to receive any pay rise in April next year. The pay review bodies are likely to take a final decision on pay for 2014-15 early next year.

The government’s move has angered health unions which told HSJ they would not negotiate “with a gun held to our head”.

In its submission to the review bodies the DH said any increase should “be made dependent on the partners reaching agreement” on reform to both doctors’ contracts and Agenda for Change.

It suggested unions and NHS Employers be “invited to report on progress in their evidence next year, effectively deferring any award”.

This is despite chancellor George Osborne saying in his December 2012 Autumn Statement that public sector pay would rise by 1 per cent in April 2014 and indicating in this year’s comprehensive spending review it would rise by a further 1 per cent in 2015.

A deal was reached on revised terms and condition between the 15 Agenda for Change unions and employers as recently as February. However, a HSJ survey of human resources directors in May found 95 per cent believed further pay savings were needed.

NHS Employers is about to embark on negotiations with both consultants and junior doctors to change their contracts but this latest threat to pay risks a deterioration of the relationship ahead of the talks.

Christina McAnea, head of health at Unison and joint chair of the NHS Staff Council, said: “What they have done is inflammatory. They must have known how unions would react. We are not going to negotiate while a gun is held to our head for a paltry 1 per cent pay rise; our members will not react well to that.”

She said unions had shown they were willing to discuss changes to terms and conditions but the government and employers were now “trying to scare us back around the negotiating table”.

Employers had repeatedly failed to implement savings already built into Agenda for Change, such as an ability to assess whether incremental pay rises are given, Ms McAnea said. “Anything which is hard work or they have to put some effort into they don’t want to know. Incremental pay rises, for example, have never been automatic and we have made it even clearer in February to link them to performance,” she added.

In its submission the DH said: “At the very simple level, employers can either pay fewer staff more or more staff less. Increasing demand means employers need staff to improve performance and productivity.”

It said the current deal for NHS staff could leave employers at a disadvantage when competing against independent sector providers. “The extent to which the impact of competition will be felt by NHS providers is not yet clear, but we expect that many may find themselves in full or partial competition over the next few years,” the submission added.

Mark Porter, chair of the British Medical Association council, said the vast majority of doctors had “seen real terms cuts in their income year on year”. He added: “The continued erosion in the real value of contracts for doctors has now reached a critical point.”