Inappropriate payments to trust directors caused by ‘exceptional events’

An acute trust has said “exceptional events” led to inappropriate payments to board members which triggered a finance investigation and regulatory action.

In its 2020-21 annual report, published last month, the Royal Cornwall Hospitals Trust said a “small number of exceptional events” led to its remuneration policy “not always being followed correctly”.

The report stated the recipients were “unaware of the errors” and “action has been taken to recover any payments made in error or made any payments that were omitted”.

However, the trust refused to provide further details of what the “exceptional events” involved or whether any money lost had been recovered, despite a previous independent report finding “reasonable grounds to suspect” inappropriate decision-making and potential loss of funds at the trust.

A spokeswoman said: “We have met all requirements on the publication of individuals’ remuneration and would not disclose additional personal information.”

In May, HSJ revealed RCHT was taking action after a finance investigation found thousands of pounds had been “incorrectly” paid to board members during 2020-21. The investigation, carried out by independent investigator Carole Taylor Browne, was launched following whistleblowing concerns from staff, and concluded RCHT managers may have “acted in the interest of individuals rather than in accordance with trust policy”.

New performance-related pay framework withdrawn

The payments were made at a time when the trust — which was in special measures between October 2017 and March 2020 — operated a performance-related pay framework for executive directors.

The trust said the framework, created during 2019-20, was established “in line with other trusts who have been in special measures”. However, it failed to include the framework’s creation in its 2019-20 annual report, despite this being a requirement. The trust told HSJ this was an “oversight”.

According to the 2020-21 annual report, the trust’s remuneration committee subsequently withdrew the framework in November 2020. Speaking at RCHT’s annual general meeting this month, committee chair Sarah Pryce said the committee “determined that actually we no longer needed the performance-related pay scheme” as the trust had since been taken out of special measures.

RCHT declined to share a copy of its framework and did not provide examples of other special measures trusts with similar frameworks, when asked by HSJ. 

The RCHT spokeswoman said the framework was “in line” with requirements in the NHSE guidance on pay for very senior managers in trusts and foundation trusts.

NHSE has not responded to HSJ’s questions about performance-related pay frameworks for executive directors at trusts in special measures. 

HR director given £70k payout

RCHT’s 2020-21 annual accounts also reveal its former HR director was paid £71,000 after she quit the trust earlier this year.

Kerry Eldridge left the trust a few months after a controversial restructure of her department.

According to a tweet by Ms Eldridge, the recruitment for her new role began in January and she announced her appointment in late March. She left the trust on 20 April and joined Cornwall Care as its HR director the following month.

However, RCHT’s accounts show she received £71,000 pay in lieu of notice. PILON allows an individual’s employment to be terminated immediately without them needing to complete their notice period.

HSJ asked RCHT why Ms Eldridge was given PILON and if the trust was aware she was starting a new job shortly after leaving the trust. The trust said it did not comment on “individual employment matters”.

A spokeswoman added: “Exit payments for senior staff are agreed by the remuneration and appointments committee in line with an individual’s contract of employment.”

The remuneration committee was chaired by trust chair Mairi McLean until July 2020, when she was replaced by Ms Pryce. Ms McLean remains trust chair.