CCG managers allowed to keep £200,000 pay-offs

An independent investigation ordered by NHS England has found the payments were in line with “prior contractual requirements” and were not affected by the cap for public sector redundancies, which came into force on 1 April 2015.

Standard terms and conditions for NHS staff’s redundancy payments provide for one month’s pay for every full year worked. However, this is capped at 24 months’ pay with an annual earnings ceiling of £80,000, effectively creating a maximum cap of £160,000 for any one redundancy.

Most executives employed as very senior managers had this cap incorporated into their contracts, alongside workers on Agenda for Change contracts. However, it appears this was not done uniformly, leaving the possibility that some managers could still be entitled to higher payments.

Tony Bruce, former accountable officer of East Staffordshire CCG, and Wendy Kerr, the CCG’s former chief financial officer, left the organisation in March 2018. According to the CCG’s annual report, Mr Bruce received £259,689 for loss of office and Ms Kerr was paid £202,183. This was on top of their salaries and resulted in Mr Bruce receiving a total of between £385,000 and £390,000 in 2017-18 and Ms Kerr between £315,000 and £320,000.

The pair were made redundant when a combined management team was set up to cover all of Staffordshire’s CCGs. HSJ reported last year that Mr Bruce is now drawing his pension, and is listed as a management consultant and coach on his LinkedIn profile. Ms Kerr is a lay member for finance and performance at West Leicestershire CCG where she is described as recently retired.

Both were in position at the CCG when it entered into a controversial community services contract with Virgin Care. HSJ reported last month that Virgin Care had pulled out of this arrangement.

The NHS Employers website states the new redundancy arrangements, including the cap, cover employees on Agenda for Change terms and conditions, who are subject to formal redundancy consultation, which started after 31 March 2015. The cap limits the salary which can count towards redundancy to £80,000. Prior to this, staff made redundant could receive up to two years’ full pay, depending on length of service.

NHS Employers said it could not comment on individual cases. “The government is currently consulting on regulations which will cap exit payments, including redundancy, at £95,000. These regulations will, if implemented, apply to all NHS staff in England,” it added. These proposals explicitly cover CCGs, as well as all trusts and arms’-length bodies.

Managers in Partnership said the usual position was for section 16 of Agenda for Change – which covers redundancies – to be incorporated into employment contracts for senior staff.

NHS England said in a statement: “The independent review found redundancy payments made by East Staffordshire CCG were in line with prior contractual requirements in force at the time of the Health and Social Care Act. Since then, new capping arrangements have been introduced across the public sector.”

Ministers have criticised high pay-offs for public sector workers, with former Treasury minister Priti Patel saying taxpayers should not have to fund “huge payoffs when well-paid people get made redundant”.

Updates: This story was updated at 15:22 on 28 May to include a paragraph on Virgin Care. It was also updated at 15:35 to change the amount in the headline to £200,000. An earlier version referred to £300,000 but, as this amount contains salary, this was changed to avoid confusion.