Some NHS workers have been warned to expect future pay rises worth less than 1% as the health service acknowledged future tussles with unions.
Sir David Nicholson, NHS chief executive, told the House of Commons Health Committee that Chancellor Alistair Darling's 1% pay cap will be treated as a maximum rise, not a "right for everybody".
He told MPs there will be a "trade-off" between salaries and jobs, suggesting unions will be faced with between wage restrictions or redundancies for their members as the health service struggles with "extraordinarily challenging" tighter budgets.
Mr Darling announced the 1% cap on public sector salaries for the two years after 2011 in his Pre-Budget Report last month, and Sir David told MPs: "It is not meant to be what the settlement is. Clearly, we will be negotiating and discussing hard with the trade unions to see what we can get for the NHS as a whole."
Last year he warned the NHS would have to save £15-£20bn between 2011 and 2014, as he expected the health service budget to be frozen after rises in the 2009 and 2010 financial years exceeded 5%, but stressed tight budgets should not increase treatment waiting times.