• Investigation reveals highest payments for interim managers in the NHS
  • An interim chief operating officer cost his trust the equivalent of £700,000 per year
  • In some cases interims have been contracted “off payroll”

An investigation has revealed some of the highest interim manager payments by NHS trusts, including a chief operating officer who cost his trust the equivalent of £700,000 per year.

Research by HSJ has also identified an interim chief executive who cost £2,333 for each day worked, and an estates director who cost £300,000 for nine months’ work.

In some cases, executives have been contracted “off payroll”, despite NHS Improvement telling trusts in 2016 that board members needed to be on payroll to conform with tax rules.

Trusts told HSJ they needed to fill vacant posts – many of which are chief operating officers – for interim periods, as there were a limited number of candidates with the right skills and experience.

Some of the highest rates came at trusts with severe difficulties at the time.

Mark Gordon, a former Royal Marines commando, cost £410,000 for seven months as interim chief operating officer at St George’s University Hospitals Foundation Trust over the financial years 2016-17 and 2017-18. If the contract had lasted for a full year, it could have reached £700,000.

St George’s also paid £300,000 for Richard Hancock to work for nine months as director of estates, facilities and capital projects in 2017-18. He also cost £360,000 for the 2016-17 financial year.

The trust said it recognised the level of interim executive pay at the time was “extremely high”. It said this has changed under a new chair and chief executive, with all executive and divisional director posts now being held by substantive members of staff.

It is unclear what proportion of the fees will have gone to recruitment agencies.

HSJ was able to collect data on interim pay from the 2017-18 annual reports of more than 200 NHS trusts, and has highlighted cases where the interim was paid a rate equivalent to more than £200,000 per year (see details below).

Two other troubled trusts – Southern Health FT and East Kent Hospitals University FT – had interim chairs who were paid at rates more commonly associated with executive directors.

Since October 2016, all off payroll interim appointments of very senior managers at rates of more than £750 a day have had to be approved in advance by NHSI, unless they are for FTs which are not receiving interim support or in breach of their licence for financial reasons. FTs not required to comply were “strongly encouraged to comply,” said NHSI.

However, it said it only looks at the governance process followed to appoint the interim – such as whether alternatives such as secondments have been considered – and does not approve pay rates.

A spokesman said: “As trusts agree the rates for their interim very senior management appointments themselves, it is important that they follow the expected procedures around governance and that they ensure they spend their resources appropriately.”

Rates above the equivalent of £150,000 a year for on payroll interim senior managers in NHS trusts also have to be approved by NHSI, together with the Department of Health and Social Care and the Treasury. In this case, the approval process does look at the level of pay and the rationale for it. Although financially healthy FTs do not require formal approval, NHSI, the DHSC and the Treasury will “express views” on any appointment above this level.

High cost interims

Jon Scott, chief operating officer at Barking, Havering and Redbridge University Hospitals Trust for four months, at a cost of £110,000. He was on payroll. Estimated annual equivalent rate: £330,000.

Bernie Bluhm, chief operating officer at East and North Herts Trust, cost £135,000 for six and a half months. The trust said this was on payroll and it was “regrettably necessary” to make a short term appointment which was supported by NHSI. Estimated annual equivalent rate: £249,000.

Mark Gordon, chief operating officer at St George’s University Hospitals FT, cost £410,000 for seven months. He was contracted off payroll but left in April 2017, the last month board members could remain off payroll in certain circumstances. Estimated annual equivalent rate: £700,000.

Richard Hancock, director of estates, facilities and capital projects at St George’s University Hospitals FT, cost £300,000 for nine months in 2017-18. He was contracted off payroll. The trust said estates had been highlighted as a “must do” priority in its previous Care Quality Commission report. Estimated annual equivalent rate: £400,000.

Chris Bown, chief executive of Barking, Havering and Redbridge University Hospitals Trust cost £70,000 for six weeks in 2017-18, equating to £2,333 per day. The trust said he was paid for longer than the period worked, due to the permanent chief executive returning to work earlier than expected, meaning the costs equated to £391,000 on an annual basis. He was contracted off payroll, but this was permitted as the permanent chief executive was still the “office holder.” The trust said there was a “pressing need to find the necessary high calibre of experienced senior executives at comparatively short notice, at a time of significant challenge.” Mr Bown has since returned to the trust on payroll for a 12 month fixed term contract, for £215,000.

Mark Powis, chief operating officer for 10 weeks at Sheffield Children’s FT, costing £50,000. The trust cited high demand for experienced individuals available at short notice and said Mr Powis had working knowledge of, and relationships with, its local partners. Estimated annual equivalent rate: £240,000.

Darren Cattell, director of finance for four months at Medway FT, costing £80,000. The trust said this was a fixed term on payroll appointment and reflected the national shortage for this skill set. Estimated annual equivalent rate: £240,000.

Eileen Doyle, director of clinical services for seven months at South West London and St George’s Mental Health Trust, costing £130,000. She was on payroll and the trust says she provided “highly skilled expertise” while it sought a permanent COO. Estimated annual equivalent rate: £215,000.

Tim Lynch, chief operating officer for six months at University Hospitals of Leicester Trust, costing £100,000. He was on payroll and the trust said the costs included a month in lieu of notice and expenses, so his annual equivalent rate was £155,000.

Peter Carter, chair for four and a half months at East Kent Hospitals University FT, costing £80,000. The trust said NHSI was “supportive of the appointment”. Estimated annual equivalent rate: £213,000.

Alan Yates, chair of Southern Health FT for three months, at a cost of £55,000. He also received £90,000 for five months work the previous year. Southern Health FT said the amounts were negotiated and approved by NHSI and that Mr Yates was “a highly regarded interim chair.” Estimated annual equivalent rate: £220,000.