With the Daily Mail putting the boot in over executive pay, it’s no wonder leadership roles are becoming so hard to fill, writes Jon Restell
Who would be an NHS chief executive, asked news presenter Jon Snow, master of ceremonies of the HSJ Awards in 2013.
His tone was half admiring, half pitying. It was a topical point.
A year later it was still a hot topic when the King’s Fund exposed the full extent of leadership vacancies in the NHS and explained that such vacancies matter, especially in the most challenged NHS trusts, because they create strategic instability, waste money, reduce staff morale and affect the quality of patient care.
Fast forward to this election campaign and Snow’s question holds good and deserves a serious answer.
‘The Mail deserves a push back on the way it distorts basic pay facts’
Unfortunately, you won’t find one in the Daily Mail’s reporting amid its ridiculous campaign on NHS executive pay. Few people in the country would survive the Daily Mail treatment, in which ordinary life gets twisted into something outrageous.
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Exposing the expositions
The Mail deserves a push back on the way it distorts basic pay facts, especially lumping in pension costs willy nilly.
‘There is a failure to distinguish between permanent staff and interim managers’
One trust has already explained that one “exposed” pay rise in fact concerned a promotion from nurse director to chief executive - presumably the Mail pays people more when they make editor?
Such pay rises do incur a charge in a final salary pension scheme, but it is a hefty tax bill paid by the employee - and in the new career average scheme, they become irrelevant.
Another target for the Mail was employees drawing their pension benefits while remaining in work. Anyone is entitled to draw their pension at retirement age, by which point employees have paid in full through their contributions; it costs the scheme nothing.
Comparing apples and oranges
The other main distortion is the failure to distinguish between permanent staff and interim managers.
The reality for permanent board staff is very different from the daily fees of interim managers, annualised for your disgust by the Mail.
‘NHS executive pay has consistently remained in proportion to average salaries in the NHS’
Income Data Services conducts the most reliable annual survey of NHS executive pay. Its latest report, published 3 March, gives pay rates for executives for the year up to March 2014.
It shows that pay for chief executives across all NHS trusts ran at a median of £167,500, boosted to £172,500 when extra earnings such as benefits and bonuses were added to basic pay.
Pay varied from £277,500 for the highest paid to £77,500 for the lowest. The highest paid running acute and specialist trusts and the lowest running care trusts.
For other executive board members, median total remuneration for medical directors was £175,000, finance directors £127,500 and nurse directors £107,500. By the way, the average salary for an NHS manager is £48,000.
Pay in proportion
These are good salaries, but they are a long, long way from the Mail’s picture and, as Will Hutton’s high pay report demonstrated, NHS executive pay has consistently remained in proportion to average salaries in the NHS. There has been no executive soar away, as seen in other parts of the economy.
So the Mail’s campaign distorts the truth about hard working and dedicated NHS managers.
The shelf life of the average chief executive is just over two years and consequently there has been some growth in starting salaries as trusts bid up each other for a dwindling pool of suitable candidates.
‘There has been a near total politicisation of managerial pay in the last 10 years’
But most executives do not get pay rises - because their non-executives are too frightened and have withheld even token pay rises for years - and a tiny handful of bosses get bonuses.
The Mail does, usefully, draw attention to the comparatively high costs of interim management, but fails to say why, namely, that board vacancies are running at 20 per cent. One-third of NHS providers have at least one board level post not permanently filled.
Providers who have failed to recruit permanently for the second or third time of asking must use interim management. Such measures always have a place to plug short term gaps, but long term, we need to recruit and retain more permanent managers.
These jobs should be among the most attractive prospects in the country; they offer a chance to deploy a diverse range of management skills and experience in the cause of patient care. So why do fewer and fewer people want them?
The King’s Fund report identified a blame culture, excessive regulation and unrealistic expectations of what can be achieved in short timeframes.
I would add the failure to respect managers and the near total politicisation of managerial pay in the last 10 years.
‘Government, system leaders and providers need to start afresh with their leaders’
It should also be said that these problems affect more and more leaders at all levels in all professional groups in the NHS.
Government, system leaders and providers - and I urge non-executives to take the lead - need to start afresh with their leaders.
Give managers respect for the jobs they do - the chickens are coming home to roost after decades of manager bashing; set executive pay fairly and objectively, and not presentationally; make performance management in these jobs realistic; and tackle the blame culture that infects the NHS, from the health secretary down.
Without such action, the price of unstable NHS leadership will be much higher than interim fees.
Jon Restell is chief executive of Managers in Partnership