The Government is being challenged by the organisation representing NHS Trusts in England over its defence of a controversial 1% pay offer to health workers.

NHS Providers said detailed work had been conducted by the NHS around implementing a long-term plan in which it claimed the Government assumed an NHS pay rise in 2021/22 of 2.1%, not 1%.

It comes amid growing anger at the pay offer, with the main nurses’ union setting up a £35 million industrial action fund and another union urging the public to support a slow hand clap next week against the proposals.

Deputy chief executive of NHS Providers, Saffron Cordery, said: “It is very disappointing that the Government has said that a 1% pay rise is all that is affordable when they know that the assumption was that the 2021/22 NHS pay rise would be 2.1% – and that this was covered by the NHS revenue settlement announced by Theresa May in June 2018.

“This settlement was then enshrined in a formal act of Parliament, the NHS Funding Act 2020.

“These assumptions, published in June 2019 were, of course, made before the events of the last 12 months which have significantly strengthened the case for a larger pay rise for NHS staff.

“In a survey of trust leaders for our evidence to the NHS Pay Review Body, 82% of respondents wanted a pay uplift of at least 3%, with only 14% saying it should be 2% or less.

“Some will think that the Government is snatching planned pay rises from the pockets of deserving NHS staff so they don’t have to fund the extra costs of Covid-19, which the Chancellor personally committed he would meet.”

A Government spokesman said more than one million NHS staff continued to benefit from multi-year pay deals agreed with trade unions, which had delivered a pay rise of over 12% for newly-qualified nurses and will increase junior doctors’ pay scales by 8.2%.

He added: “Pay rises in the rest of the public sector will be paused this year due to the challenging economic environment, but we will continue to provide pay rises for NHS workers, on top of a £513 million investment in professional development and increased recruitment.

“That’s with record numbers of doctors and 10,600 more nurses working in our NHS, and with nursing university applications up by over a third.

“The independent pay review bodies will report in late spring and we will consider their recommendations carefully when we receive them.”

Health Secretary Matt Hancock told a press conference on Friday evening that NHS staff had been “carved out” of a pay freeze affecting other public sector employees, and that the Government had to take affordability into account when considering pay.

He said: “We have set out what is affordable given the very significant challenges in public finances.”

Earlier on Friday, the council of the Royal College of Nursing (RCN) said it had decided to set up a £35 million industrial action fund to support its members should they wish to take action.

Unite, which represents tens of thousands of NHS workers, is also warning of industrial action, while Unison said people should stand on their doorsteps and balconies for a mass slow handclap at 8pm next Thursday to show what they think about the planned “derisory” wage increase.

Jonathan Ashworth, shadow health secretary, said: “It’s now clear beyond doubt that Rishi Sunak has snatched away the pay rise staff were promised by Ministers in the NHS long term funding plan.

“Not only is Rishi Sunak cutting the pay of hardworking nurses he’s broken his promise to give the NHS whatever it needed to get through Covid.”

Rehana Azam, national officer of the GMB union, said: “Unless the Government get real and send through a proper option, it’s very probable this will lead to industrial unrest, something no-one wants to see.

“After 10 years of running the NHS down, it’s clear that it’s the same old Tories playing the same old tunes – and NHS staff aren’t going to listen to it anymore.”