Local authority employers have offered a 1% pay rise to around a million council workers in England, Wales and Northern Ireland, with those on lower salaries receiving slightly more.
The offer follows a similar 1% rise last year, which came after three years of a wage freeze.
The employers, who negotiate on behalf of 350 councils, said the increase would increase the local government paybill by more than £164 million.
Sian Timoney, who chairs the employers' side, said: "There is a broad consensus among councils that there should be a pay offer to staff this year.
"At a time when local government is tackling the biggest cuts in living memory, this offer balances our commitment to increase the pay of our hardworking employees with the responsibility we have to address the significant financial pressures we face.
"We believe that this is a fair deal for employees, given the limits of what we can afford, and a fair deal for the taxpayers and residents who use and pay for the vital services which local government provides."
The offer applies to staff ranging from librarians, refuse collectors and cleaners to social workers and architects.
The pay offer does not apply to chief executives, senior officers, teachers or firefighters, who are covered by separate pay arrangements.
Brian Strutton, national officer of the GMB union, said council workers will be "dismayed" at being offered another below inflation pay rise.
"The extra for the lowest paid is welcome but is worth only a few pence on the hourly rate. It still leaves the local government workforce as the poor relations of the public sector, and councils can afford more because they are squirrelling away hundreds of millions in reserves. We will now be consulting GMB members who I expect will say it's not good enough."
Unison said it will consult more than 600,000 of its members over industrial action, describing the 1% offer as "meagre."
Around 50,000 of the lowest paid local government workers will receive a rise that is slightly above inflation, while the remaining 90% of the workforce will receive 1%, said Unison.
The 1% offer will apply to more than one million workers including teaching assistants, planners, administrators, social workers and engineers, representing a cut in basic pay of almost 20% since the coalition came to power, according to the union.
Head of local government, Heather Wakefield, said: "It is outrageous that the vast majority of local government workers have effectively been offered another pay cut.
"Although the long overdue modest rise for the lowest paid workers is welcome, this offer is another slap in the face for the vast majority of local government workers.
"Just this week we learned of the scandal of cabinet ministers happily approving pay rises of up to 36% for their own special advisers, while condemning thousands of other public sector workers to poverty pay.
"Unison has seen a growing number of workers forced to rely on food banks and in-work benefits as a result of continuous pay freezes."
Unite national officer for local government, Fiona Farmer, said: "This final offer falls well short of our aspirations and does not meet our goal for £1 an hour across the board for local government workers.
"This paltry offer of 1% is a pay cut in real terms as the RPI rate of inflation is running at 2.8% - and it will continue to cement poverty pay for thousands working for local councils.
"We will be consulting our members with a recommendation to reject this offer and industrial action by our members is very much on the cards.
"After yesterday's Budget which was geared to prosperous and the well-off , this offer from the employers adds insult to injury.
"Local government employees have borne the brunt of the coalition's austerity policies for the last four years, which have seen services used by some of the most vulnerable in society savagely cut back. Enough is enough."