Health secretary launches crackdown on NHS executive pay

As part of a wider crackdown on staffing costs, Mr Hunt has written to leaders of every hospital trust and clinical commissioning group demanding they review the pay of senior NHS managers and report back to the Department of Health.

This is expected to feed into a wider review of senior NHS managers pay ahead of new benchmarked rates to be set at a later date covering senior managers and those on “very senior manager” pay frameworks.

Each trust has been asked to justify to the DH why any new very senior manager should be paid more than the prime minister (£142,500). The department said more than a fifth of all NHS directors earn more than the prime minister’s salary.

The letter also instructs NHS trusts and CCGs to have a stronger focus on off-payroll executives, which it says should be paid maximum daily rates.

HSJ has been told by the DH these rates will be set out later this year following the review of NHS pay in collaboration with the Treasury.

Other changes include a cap on redundancy for newly appointed very senior managers. This was part of the deal with Agenda for Change unions to end the pay dispute earlier this year and will see a maximum redundancy available of £160,000.

Mr Hunt is also considering new rules to prevent NHS staff retiring and returning to work in the NHS. Proposals include making sure managers who return to the NHS after accessing their NHS pension pot will be barred from being paid a higher salary than before they retired, including the deduction in pension contributions.

Other proposals including making staff agree they will not be re-employed if they access their NHS pension.

HSJ understands the government will “require” senior managers to be more open about how much they earn by forcing the NHS to publish data on senior executive pay.

Increasing the pay of very senior managers who opt out of the NHS pension scheme will also be abolished.

The government is likely to face opposition from senior management figures including the Managers in Partnership union, which has previously criticised ministers for belittling senior managers and risking further shortages at senior levels in the NHS.

In the letter, Mr Hunt said: “Reforming the way we pay for NHS staff is a very high priority and must include a review of the pay of the most senior staff in the NHS – chief executives and executive directors.

“Although these staff do important jobs and deserve to be fairly rewarded, it is vital that we do not lose sight of the need to ensure that executive pay remains proportionate and justifiable.

“I recognise that there are some great leaders in the NHS and people who do a good job for patients should be rewarded fairly. But the NHS is a public service and needs to show restraint on handing out generous pay packages as a matter of course.”