David Cameron’s move to restrict the salaries of senior NHS managers will not affect the best paid but could encourage trusts to outsource cheaper labour, HSJ has been told.
The coalition government has said only the top performing 25 per cent of senior managers will receive bonuses in 2010-11.
But the bonus cap applies only to 1,100 people on the very senior managers pay framework, which includes primary care trusts, ambulance trusts and strategic health authorities.
It does not apply to those at acute trusts, foundations or mental health trusts, meaning many of the best paid chief executives in the NHS will be unaffected.
For example, it would not include Guy’s and St Thomas’ Foundation Trust chief executive Ron Kerr, who earned £270,000 in 2008-09 or University College London Hospitals Foundation Trust chief executive Sir Robert Naylor, paid around £252,000 according to the latest Incomes Data Services report.
In 2008-09 the median salary of PCT chief executives was £137,500, compared with £157,500 at foundation trusts and £147,500 in non-foundation trusts.
“Will there be the same performance pot as now or will that also be cut?”
The government has also commissioned a review of public sector pay, including proposals to ban anyone from earning 20 times more than the lowest paid worker in their organisation.
It has not yet been decided whether this will include outsourced workers.
If not, Hay Group director of public sector consulting Peter Smith said trusts would “game play” by outsourcing porters and cleaners so their low salaries are not taken into account. A government source agreed this would be a likely outcome.
The lowest paid worker on the Agenda for Change contract earns £13,653 a year, meaning a manager would need to earn at least £273,000 to fall under the ban.
The pay review is being led by Work Foundation chief executive Will Hutton, who said at the Nuffield Trust strategy summit in April that any growth in the NHS wage bill would lead to 100,000 job losses.
At that time he called for a “new workplace bargain”, where workers agreed to be flexible on where they worked and in which roles, in return for job security.