Forcing organisations to publicly justify the salary of every manager earning more than £150,000 would damage the NHS, boards have warned.
Prime minister Gordon Brown said this week organisations would have to explain publicly to the health secretary any decision to pay above that level.
Health is going to lose out in a big way if there is an effective £150,000 cap
He said: “Those organisations found to be squandering public funds on over-generous salaries for officials, at the expense of services for people, will be named and shamed.”
Managers in Partnership union chief executive Jon Restell said it was a “pure politics” approach to executive pay.
He said it could become an effective cap on new salaries which would discourage movement between posts and organisations. This would affect recruitment in less senior posts and could make it difficult to attract doctors, who are often paid more, into management.
Mr Restell said: “The government is right to address public anxiety about executive pay. We support things like publishing salaries, which many boards already do.”
But he added: “Health is going to lose out in a big way if there is an effective £150,000 cap. It is going to discourage people from moving and we will see an escalation of gaming, with lots more recruitment and retention premiums and relocation allowances to attract people.”
At Chesterfield Royal Hospital Foundation Trust, whose chief executive Eric Morton was paid £170,000 in 2008-09, chair Richard Gregory told HSJ: “As long as we’ve got good corporate governance systems, justifying pay is not a problem.”
Mr Gregory said “the public sector needs good leaders as much as the private sector” and should not put off people who want good pay.
University College London Hospitals Foundation Trust chair Sir Peter Dixon said: “We should be able to justify what we pay people [and] I can do so at my organisation.” Its chief executive Sir Robert Naylor was paid £250,000 in the last financial year.
He added: “We are very short of good talent to run hospitals and other bits of the health service. Though I don’t think money is the only issue, making it even more difficult doesn’t strike me as sensible.”
Mr Brown said on Monday: “It cannot be right that… in total over 300 staff across public sector bodies are paid more than £200,000. And when Britain is emerging from a global recession which has robbed families of their homes; workers of their jobs and businesses of their trade and turnover - and left others fearing the same - it is time to act.”