The contract agreement for 2018/19 had already agreed a 1% pay increase, but in a written statement to parliament health and social care secretary Matt Hancock said a further 1% would be added to GP remuneration and practice staff expenses, which would also enable practices to increase the pay of practice staff.
The recommended minimum and maximum scales for salaried GPs will be increased by 2%, but not until 1 October 2018. The GP trainers' grant and GP appraiser fees will be increased by 3%, also from October.
Junior doctors will receive a 2% increase in basic pay and a 2% increase to the flexible pay premia from 1 October 2018.
The decision came despite the fact that the independent Doctors’ and Dentists’ Review Body (DDRB) recommended that GPs should receive an increase of 4% in a bid to tackle recruitment and retention problems in the profession.
Mr Hancock's statement said that an additional 1% pay increase could be available from 2019/20, 'conditional on contract reform'. This would be on top of any funding increase negotiated as part of the contract.
Mr Hancock added that he intended to ask NHS England to take a 'multi-year approach to the GP contract negotiations with investment in primary care linked to improvements in primary care services.'
He said: 'Following this one year pay rise, we want to open up a wider conversation on pay and improvements. This is the start of a process whereby we will seek to agree multi-year deals in return for contract reforms for consultants and GPs.'
The written statement added: 'GPs face a significant challenge in numbers and we need to recruit large numbers over a short period, meaning any pay rise needs to be balanced against our aim for a growing number of practitioners.'
The DDRB report that was published today recommended that GPs receive a 4% pay rise.
It said there should be a minimum 2% increase in pay for GP partners and a 2% rise for salaried GPs and the GP trainers' grant. However, it also recommended an additional increase of 2% for partners, salaried GPs and the trainers' grant as a way of encouraging GP retention and recruitment.
The report said: 'We believe that if sufficient number of GPs are either to be recruited from overseas or encouraged to remain in the service longer than they otherwise would have done, a pay response is required now. Such a response needs to be significant and go beyond our recommended base increase for the pay remit group as a whole.'
The BMA said the pay award was 'deeply concerning' and that GPs should receive a pay rise of at least 4%. In its evidence to the DDRB it called for GP funding in 2018/19 to deliver a 2% pay rise on top of the RPI rate of inflation - which was running at 4% at the time.
GPC chair Dr Richard Vautrey said: 'It is deeply concerning that the government has chosen not to honour the findings of its own independent pay review body across the entire NHS, but specifically for GPs.
'The nation's beleaguered family doctors and their hard working staff should be receiving at the very least, a 4% pay rise, as recommended by the pay review body, simply to keep services for patients running.
'For a decade GPs have seen their real terms pay cut by over 20%, resulting in many GPs leaving the profession and doctors not wanting to become GPs. For the new secretary of state to commit, only last week, to addressing the workforce crisis in general practice and raise hopes of investment in primary care, to now dash those hopes, will signal to dedicated GPs and their staff that they are not valued.'
The deal announced applies to GPs in England. The Welsh contract deal for 2018/19 included an interim 1% pay increase for GPs that would be reviewed following publication of the DDRB recommendations. A Welsh government spokesperson confirmed that it was reviewing the DDRB's report and that the health secretary would make an announcement in due course.
GPs in Scotland, who moved onto a new contract in April this year, must also wait to see if the Scottish government backs the report's recommendations.
BMA Scotland chair Dr Peter Bennie said: ‘This presents a real opportunity for the Scottish government to demonstrate how much they value the profession and take a different approach [to England].
'It is a chance to reverse the trend of below-inflation pay restrictions that have devalued doctors, even as we work above and beyond expectations in order to keep NHS Scotland going. The Scottish government must demonstrate that they are truly serious about tackling the problems of recruitment, retention and morale that are having such a damaging effect on our NHS.’