Why It is time to close the NHS pay gap - from the bottom up

Published: 11/4/2002, Volume II2, No. 5800 Page 23

Are NHS chief executives paid too much? One in four chief executives running an acute trust now has a six-figure salary, according to the latest data. In this week's cover feature (pages 28-32), Nigel Dudley, consultant in elderly medicine at St James University Hospital, Leeds, accuses trust remuneration committees of paying chief well in excess of annual limits set by the Department of Health. He believes that in doing so they ignore government policy on fair pay for all in the NHS.

The morality - and legality - of ignoring the guidance is a complex affair. A simpler question is whether the highest earners in NHS management deserve the rewards they reap. This week, NHS chief executive Nigel Crisp warned managers who might have been tempted to unwind after a particularly exhausting race to meet end-of -year targets that there will be little let-up in the pressure. Activity must not be allowed to drop.

One community trust chief executive believes recompense is needed for the pressures of working in 'a highly political red-hot atmosphere'. The attrition rate of NHS leaders - Incomes Data Services statistics show almost 20 per cent of UK trust chief executives left their posts or were replaced last year - is a good reason to pay them decently while they do the job, many argue. Is jam today the only way to entice - and retain - public sector managers who are aware that their careers may be sacrificed on the political altar?

Another chief executive who leads a large teaching hospital trust describes his pay as 'derisory' compared with the far more glamorous money offered by the private sector.

He believes government policy - and the blurring of lines between the private and public sector - means the cash benefits of life at the top will become even more contentious. As franchising becomes flesh, the extent of opportunities for the private sector will become clearer and it is nigh on impossible to control the remuneration of a relatively tiny group of people possessing the skills to do a highly specialised and peculiarly demanding job.

Now signs are emerging of divisions among NHS chief executives. As the new breed of primary care trust chief executives adjust to an unfamiliar landscape, for some the everyday pressures may be eased by pay packets of over£100,000. In February, the DoH announced a maximum salary of£107,500 for those leading PCTs, and a minimum of£78,635. One head of a large city teaching hospital trust contrasts the£133,000 salary advertised for the head of Leeds Teaching Hospitals trust (one of the UK's largest, with a£500m budget) with the salaries for those running PCTs on about a third of the budget.

Meanwhile, anecdotal evidence, and HSJ's jobs pages, suggest a widening gap between board-level posts and the ranks of middle management, with the salaries for business and service managers hovering around£30,000. The question of whether this offers adequate incentive to spur on tomorrow's future leaders has rarely been examined. Nor is it easy to find data by which to judge the varying levels of responsibility carried by these armies of 'frontline' managers.

Overall, the picture of managers' pay is complex and littered with anomalies: in short, unsatisfactory. But the frank discussion needed to determine what price is right for the variety of jobs in NHS management is stifled by a public arena in which managers will always lose the popularity vote. And pay increases which bust DoH guidance do little to support the concept of shared endeavour on which the NHS was founded.

So what is to be done? A year ago this week, Nigel Crisp wrote to the chief executives of acute trusts, PCTs and health authorities promising pay arrangements for senior managers which would 'provide fair, consistent and effective rewards and incentives for high standards of performance and commitment'. He also pledged a more effective framework for developing a new core contract for managers. But it was not clear - and still is not - whether this would include new fixed pay scales.

Mr Crisp's political masters must match their rhetoric about a culture of public sector enterprise with a fair, well-funded and transparent system to attract and retain managers of the calibre the NHS so desperately needs. Whatever the system brought in to determine pay levels for senior managers, junior colleagues should not be overlooked.

Nor should the rest of the service. In the long term, the only sustainable solution is to close the gap between senior managers and the rest of the NHS from the bottom up.