The government has abandoned plans to force 1 million NHS staff to give up a day’s holiday in return for a salary increase that will mark the end of a pay cap that has existed since 2010.



Ministers have stopped insisting on an extra day’s work a year as a precondition of a deal that, if accepted, will give health service personnel in England a 6.5% rise over the next three years. Details of the package are due to emerge on Wednesday after months of talks between the government and leaders of 14 trade unions representing all non-medical NHS staff.



Under the deal nurses, midwives, paramedics, healthcare assistants and other staff will receive 3% in 2018-19, 2% in 2019-20 and 1% in 2020-21. It will cost the Treasury about £4.2bn over those years to try to neutralise an issue that proved difficult for Theresa May to handle in last year’s election campaign and which promoted threats of the first ever strike by NHS nurses angry at seeing their income fall in real terms. She coined the phrase “there is no magic money tree” when challenged by an NHS nurse over the pay cap during an edition of Question Time.



Key figures on both sides negotiating the pay offer feared that, unless the government removed its insistence that staff forfeit one of their 27 days of annual leave to help finance the deal, it could lead to union members rejecting it and scuppering any sort of agreement being reached.



Frontline NHS staff reacted negatively when the Guardian revealed on 9 March that ministers had made an extra day’s work a “red line” precondition of any deal. John McDonnell, the shadow chancellor, called the suggestion “mean-spirited”.



A senior NHS source claimed that NHS Employers, which represents NHS trusts in issues involving staff terms and conditions, had put the idea of removing a day’s leave on the table and that some unions had agreed to it. However, the Treasury, which had insisted that any NHS pay deal would have to be part-financed by greater productivity, was also thought to have been involved.



“Jeremy Hunt took it off table during a meeting with Janet Davies, the chief executive of the Royal College of Nursing, as they felt staff had been working so hard over winter it would be counter productive,” the NHS source said.



The 14 unions are poised to recommend the deal to their members at a meeting on Wednesday of the NHS staff council. Sara Gorton, the head of health at Unison, which represents about 400,000 staff, has been leading negotiations for the unions.



It is hard to predict how union members will respond to the proposed deal, even though their leaders will endorse it. They have seen their real-terms income fall by an estimated 14% as a result of having a pay freeze imposed on them in 2011 and 2012 and then seen their salaries rise by just 1% in the five years since.



Doctors and dentists have their own pay review body and conduct their own separate negotiations from the 1 million-strong non-medical workforce, who are all covered by a longstanding pay talks framework called Agenda for Change.

