Primary care trusts are being forced to bend official pay rules to fill board level posts at a time when recruitment problems are predicted to deepen.
Strict pay rules are making PCTs increasingly reliant on “creative recruitment practices” such as one-off allowances and recruitment and retention premiums which boost pay by up to 40 per cent, according to the government’s senior salaries review body.
£89.6k - Median total earnings of staff in Agenda for Change band 9. This is now 1 per cent higher than the median total earnings of executive directors
In some regions, payments for those taking on additional responsibilities breach the permitted limit, which is 10 per cent of salary, the report published by the body last week says.
The report suggests such practices may become even more common following the government’s announcement last week that very senior NHS managers’ pay will be frozen in 2010-11.
It says: “The extensive use of RRP and other supplements suggests to us that the current pay framework is increasingly out of line with salaries required to attract applicants of the appropriate quality.”
It reports fears by PCTs that there would be “recruitment problems in the future if pay awards continued to be at a low level or if there is a pay freeze”.
Part of the problem is that NHS and foundation trusts are not covered by the very senior managers’ pay framework - foundation trust chief executives earn around £24,000 more a year than their average PCT counterparts.
In addition, those covered by very senior managers’ pay sometimes earn less than the staff who report to them on Agenda for Change contracts. The 2.25 per cent Agenda for Change uplift is likely to create further overlaps.
This is encouraging some organisations to advertise very senior manager jobs on Agenda for Change contracts.
The review body says when the senior pay framework was introduced in 2007 there was “overlap” between it and band 9 - the top band in the Agenda for Change payscale.
The median total earnings of staff in band 9 - £89,600 - are now 1 per cent higher than the median total earnings of executive directors and the overlap is now apparent from the middle of band 8.
Pay data collated by the body shows the pay of PCT finance directors and corporate affairs directors can be up to £40,000 lower than staff on Agenda for Change band 8c, 8d and 9 rates.
To address this, the body recommends a 2.25 per cent pay increase from this April for very senior managers whose total salary is less than £80,000.
That was rejected by health secretary Andy Burnham last week when he confirmed senior NHS managers - along with GPs, dentists and the highest paid hospital doctors - would get no pay increase for 2010-11.
Managers in Partnership chief executive Jon Restell told HSJ the government’s decision to “ignore” its own advisory body raised questions about “whether it was sensible” for politicians to be involved in decisions over pay, particularly at election time.
He said the body’s recommendation would cost just £40,000 nationally, but had been ruled out for political expedience.
The review body report says it also has “particular concerns” about potential recruitment problems for London PCTs as the senior pay framework links pay to the size of organisations and London PCTs are smaller.
It predicts recruitment problems as longstanding London senior managers - whose contracts and pay predate and therefore exceed the framework - leave their posts and need to be replaced by managers working at a lower rate.
A London PCT chief executive told HSJ: “It’s always difficult to bring new people into London because of the cost of living… it tends to restrict us to the same talent pools”.
HSJ understands some PCTs feel NHS London is making matters worse by interfering when salaries are being set for vacant posts.
Frank McKenna, head of NHS and health services at recruitment consultancy Harvey Nash, said: “Experience would seem to suggest that a number of other SHAs have been somewhat more flexible.”
He added: “The difficulty we have at the moment is [very senior managers’ pay] acts as a deterrent to those in mental health or the acute sector to want to go back into primary care. It feels very passive, rather than a focus on how we move talent around in the NHS.”
The Department of Health hopes a job evaluation framework will fix many of the problems, but this is “unlikely to be implemented until the third quarter of 2010 at the earliest”, the report says.