Civil servants will be given a raise of 2.5 per cent annually for the next five years, under a collective agreement to be signed next week.

Trade union sources told The Times the new agreement will increase the government wage bill by some €60 million during the period, or €12 million a year.

Most of the extra pay will be passed on to the government’s nearly 30,000-strong workforce while former public servants will also see their pensions increase.

The sources said the six unions involved in this deal, captained by the Union Ħaddiema Magħqudin, have already accepted the last offers made by the Government following two years of negotiations.

When contacted, UĦM general secretary Josef Vella confirmed the agreement.

“We are very happy with the deal, particularly in the current international climate,” Mr Vella said.

“Although some details are still to be fine-tuned, I can tell you we have a deal and that all unions seem to be on board,” he said.

Apart from the UĦM, the negotiations were also held with the General Workers’ Union, among others.

Finance Minister Tonio Fenech did not want to divulge any details since, he said, some aspects of the deal still have to be hammered out. However, he confirmed that an overall agreement had been concluded and that all public service employees would be getting a substantial salary increase.

The last public service collective agreement expired way back in 2010.

The new agreement will cover the years between 2012 and 2016, with government employees receiving arrears for this year.

The new collective agreement will also include a number of family-friendly measures including the introduction of flexitime for personal reasons and the facility to take part of the available vacation leave on an hourly basis.