Hello, sorry you haven't had many replies, you could try posting in employment matters as I know there are many NHS HR bods that hang out there?
What I would say is that being promoted by a jump of 3 bands really is quite unusual, in my NHS career I've seen on a handful of occasions someone making a 2 band jump (e.g. a Band 3 to 5) but that would usually be where there's a clear rationale e.g. they've been working as an unqualified assistant and have just got their degree/clinical qualification so can start work as a HCP, or I've seen someone be promoted 2 or 3 times in fairly rapid succession (over the course of a few years) but I don't think I've ever seen a 3 band jump in one go. So in one sense I would say you are being a bit U in having this expectation BUT I fully understand that you've been doing a lot of the work of this Band 7 role on a voluntary basis on the understanding this would then be repaid by some investment/recognition in you further down the line and now this hasn't materialized which must be a real kick in the teeth for you, totally not U there.
I am reading between the lines here so apologies if I've got this completely wrong, but in order for a non clinical job to reach Band 7 in the NHS job evaluation scheme it has to have quite significant managerial responsibilities, things like line managing others, being responsible for a budget, doing long term strategic planning for the department, as well as doing more complicated and difficult work than at the lower levels and being more independent and less supervised. In line with this the expectation is that the person has good academic qualifications up to masters degree level and/or that they have very significant on the job experience and training to enable them to do that job - so I can see why they may be saying that 'on paper' you aren't qualified for the job.
Now it may or may not be that that is genuinely still a requirement for the particular job in your department, quite often managers out of lack of time or laziness don't want to really think about what they now need and rewrite/redesign the job, and just use the old job description sometimes years old, which may not reflect the now reality of the situation. It may also be that from your perspective you've been covering the Band 7's work but actually your manager has been covering things like the staff management, senior level meetings etc which they would normally get the Band 7 as their deputy to do, so feels as though you aren't truly doing the full role and hence why they still want to bring someone else in. I doubt he's seeing this from your point of view, he is probably just thinking about how much easier his life would be if he had both you now that you have been trained up and are more experienced, plus another senior/experienced person to do all the work - he's basically thinking he can have his cake and eat it 
.
What I would do is try and approach your manager a bit strategically on this and suggest some ways in which things can be organised so as to benefit both you and him and maybe even save some money for the department which can then be spent in other ways. So if for instance at the moment the structure is that you have your manager at (I'm guessing) 8A or B, the Band 7 job and then you as a Band 4, he could change the structure to have him at 8A, a Band 5 or 6 deputy's job which you could apply for and then a Band 3 which you would supervise. He would still have to do a lot of the higher level management work in this scenario, but if you were freed up from all the low level admin work by having a band 3 there, you could take a lot off his hands to help him (I'm sure you can articulate this) and there would still be a budget surplus that could go into training or new kit or other budget areas to make the department run more smoothly and effectively. Basically sell the benefits to him as in the short term doing this will be a PITA for him to sort out in terms of paperwork. You can also subtly imply that you are looking to develop your career so if there aren't opportunities for you in the department you will be looking to move on and so he'll be left without any trained experienced staff which will also be a problem for him...
Good luck!