The health secretary has said he hoped for a resolution to the pensions dispute which this week triggered the biggest public sector walkout in generations “by the end of this year”.

Speaking to the annual Healthcare Financial Management Association conference in London last week, Andrew Lansley said even within the “cost ceiling” and other limits to the government’s offer, there was “scope for flexibilities to be used”.

“That’s why we are in active discussions and my colleagues will be having that discussion with the trades unions again today,” he said.  

He added: “I do very much hope that by the end of this year we will have an agreement in place. I hope from your point of view that literally by the new year you should be in a position not only to see what the contribution rate changes look like for the next financial year, but also what the shape of an agreement for pensions long-term will look like.”

The health secretary said he had participated in those discussions with the trades unions himself, because he “wanted there to be no doubt that I understood where they were coming from”.

“I have to say that after those conversations I and my colleagues made an improved offer, a substantially improved offer, recognising some of the things that had been said to us,” he added. “The unions said [they did not] think the accrual rate that was then on offer was sufficient for us to be confident that low- and medium-earning staff in the NHS would continue to be able to retire on a pension at least as good as the one they’re expecting now, albeit that they work longer or pay a bigger contribution.

“So a one sixtieth accrual rate does achieve that, and the adjustment to the cost ceiling allowed that.

“They also said we don’t think the short transition is right. They wanted a longer transition, and in particular we responded to that by making it clear outside the cost ceiling that we’re prepared to fund protection such that anybody within 10 years of their expected pension age will be able to retire on the pension they expect at the age they expect.

“There’s something like 400,000 staff across the NHS who are within 10 years of their current expected age.”