The Department of Health has opened the door to more flexibility in very senior managers’ salaries, in response to growing concern that pay rules are being fudged and gamed.

The current system pegs salaries in primary care and ambulance service trusts and strategic health authorities to strict bandings by population and post.

But the DH has announced it will look at introducing a system of job evaluation, which could allow pay to be adapted to market rates.

It follows HSJ’s revelation that the rules are being “fudged”, with excessive use of recruitment and retention premiums. Job descriptions are also being ignored as trusts struggle to attract and hold on to managers.

An independent review commissioned by the DH, published alongside its response, said managers had described the overuse of premiums as “gaming”.

“If salary levels were related in a direct way to the market, the need for such a high RRP [recruitment and retention premium] would diminish,” it said.

Pay challenge

The present system is opaque and potentially leaves employers open to equal value pay claims, the review said. It called for a job evaluation based system to be put in place for 2009-10.

The DH submission to the senior salaries review body said it wanted to “avoid inflationary pressures” but accepted “the introduction of job evaluation may reduce the proportion of very senior managers (particularly in London) who are on pay protection or excessive levels of recruitment and retention premia”.

However, it rejected the time-scale, saying it would first review the costs of the change and consult the public sector pay committee.