Mackey: Pay bill growth list was 'intended to start a discussion'

Chief executive Jim Mackey issued a statement to clarify its position following the NHS financial reset announcements last week by NHS Improvement, NHS England and the Care Quality Commission.

The reset document included a list of 63 trusts which, it said, according to NHS Improvement’s analysis, had seen “significant growth” in their pay bill “in excess of inflation and pension effects” since 2014.

HSJ has reported that it was understood that where trusts could not justify this growth to NHS Improvement, they would be required to make additional savings, and that some had been told their control totals may be revised.

However, Mr Mackey’s statement says that it is “incorrect to suggest that providers will be penalised financially over pay growth”. He also said it would be “unworkable and unsafe” to suggest that the entire “excess” identified in the document, of £356m, should be cut from pay spending.

HSJ understands NHS Improvement is expecting some savings as a result of addressing “excess” pay to be delivered this financial year, and some in 2017-18.

Mr Mackey said in a statement: “There are legitimate reasons why individual providers may have reported recent growth in pay costs, taking on new services or addressing concerns raised by the [CQC] for example. We will work with providers and the CQC to identify where savings can be made without compromising patient safety.

“This national benchmarking is intended to start a discussion with individual providers to understand fully what has caused the growth we have seen, and to decide if any action needs to be taken locally. They are not being targeted for cuts.

“As we have stated before, there will be no arbitrary changes made to control totals for this year. Any agreed financial rebalancing will be done with safety in mind, based on plans developed and agreed by the provider board and with NHS Improvement and CQC support.

“Access to sustainability and transformation fund allocations will be contingent on meeting the agreed control totals, not cutting staff. This is not a financial penalty, instead it tilts the balance in favour of providers that are doing the right thing.”

The excessive growth figures in the document were based on comparing trusts’ pay growth since 2014 with expected pay inflation over the period. The difference was halved to give a “potential pay growth opportunity” for the second half of 2016-17.

Chief executives of several of the trusts listed have criticised the process and analysis, as HSJ has reported. Among their comments were that the analysis did not account for where there is a historical baseline of poor staffing, increases in activity, or changes to services.