After 12 hours of negotiations, representatives of NHS employers and unions reached agreement this week in the dispute over local pay that threatened to disrupt the health service. A formula has been agreed which meets the government's objective for local negotiations while preserving a place for national agreements.

In the first year of the two year agreement NHS trusts will negotiate their own pay deals. In the second year, minimum pay rates will be uprated nationally on the basis of a calculation of the average local rates. The government wanted to shift towards all pay being agreed at local level. …