The deal, which was negotiated by health unions and NHS Employers, means the top regular user rate will now be 44p, a 4p increase, and the top standard user rate will be 58.3p, an increase of 5.3p.

The passenger allowance will also increase from 2p to 5p, the cycle rate from 6.5p to 10p, and public transport rates from 23p to 24p.

Dr Peter Carter, RCN chief executive and general secretary, said: ‘This agreement is a step in the right direction and forms part of a bigger picture in delivering a better deal for nurses.

‘The RCN is still calling on the government to abandon plans to increase fuel costs by 2p a litre in October and ease the financial burden on dedicated health care workers.'

NHS Employers said it planned to review the whole system of calculating mileage and travel allowances and then review the allowances on a regular basis.

emma.bower@haymarket.com

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