The government’s decision to impose a pay deal on NHS staff will nevertheless cost the service an extra £150m a year, NHS Employers has told HSJ.

The organisation’s chief executive, Dean Royles, said further talks with NHS trade unions could be “an opportunity” to develop a sensible approach to staff pay, terms and conditions.

But he highlighted the need to secure a deal with the British Medical Association in current negotiations on changes to doctors contracts, saying: “The issue around doctors contracts is now pressing, we have to move forward with that.

“Given we have made changes to domestics, nurses, physios and scientists on their contractual terms we have to try and land a deal with doctors before we can have a serious discussion about further changes that might then take effect.”

Last month the government rejected recommendations by the NHS Pay Review Body for a 1 per cent cost of living rise to all staff. Instead ministers imposed a two-year deal with a 1 per cent, non-consolidated rise for staff at the top of their pay bands while those in receipt of incremental pay increases were told they will receive no separate cost of living rise.

Health secretary Jeremy Hunt has offered unions a deal to consolidate a 1 per cent rise for staff over the next two years in exchange for a freeze on incremental progression in 2015-16. Unions have reacted angrily to the move and are consulting members on what action to take.

Mr Royles said the issues surrounding the government’s pay deal and whether unions will negotiate an incremental freeze or other savings should be viewed separately to wider talks on the future of pay, terms and conditions.

He said: “What we have said as NHS Employers, is that given the context of pay restraint is there an opportunity here to have a further discussion with unions about how we come out of this period sensibly.”

He said these discussions could be “creative” and involve issues such as a living wage, service change and more flexible ways of working.

“I think one of the things that is in stark relief is that people can increasingly see the sort of financial pressure organisations are under,” he said adding: “We are seeing an increasing number who are becoming financially challenged, who are recruiting staff but using surpluses to do it, pension and national insurance contributions going up - that is the context we face. It gets starker everyday about the need for change.”