The Government has announced that failing Trust leaders will have annual pay rises docked under tough new measures aimed at improving NHS performance and driving progress on cutting waiting lists. Bonuses of up to 10% will also be on offer for top performers under the new ‘carrot and stick’ approach.
Under the new plans, the government will look to learn from some of the most effective businesses in the country to recruit top talent to struggling Trusts - with leadership vacancies in badly performing areas coming with a temporary pay increase of 15%, worth up to £45,000. Pay bands for senior managers will also be refreshed to attract and retain effective leaders within the NHS.
At the same time, failing CEOs could see up to £15,000 docked from their salaries if they run into debt or fail to deliver improvements. This is in addition to any existing processes to tackle poor performance, where persistently failing managers could be sacked if they do not turn things around.
The measures also establish stricter accountability for very senior managers, demanding greater financial rigour across all NHS Trusts and integrated care boards (ICBs) and a drive for productivity. The announcement comes after Health and Social Care Secretary Wes Streeting declared in November there would be “no more reward for failure”.
Health and Social Care Secretary Wes Streeting said: "Some of the best businesses and most effective organisations across Britain and the world reward their top talent so they can keep on delivering. There’s no reason why we shouldn’t do the same in our NHS. We will reward leaders who are cutting waiting times and making sure patients get better services. But bonuses and pay rises will be a reward and not a right - because I’m determined that every penny we invest through our Plan for Change is money well spent. Our carrot and stick reforms will boost productivity, tackle underperformance and drive up standards for patients."
Sir Jim Mackey, NHS England Chief Executive, said: "If we are to consistently reach the standards of care the public rightly expect, it is clear that we need to reward those who are delivering for patients. An important element of driving improvements must be strengthening the link between pay and operational performance at a very senior level - this happens in almost every other sector and there is no reason for the NHS to shy away from it, particularly when we rely on money that comes directly from taxpayers’ pockets. We will be working together with local leaders to improve transparency and ensure progress is recognised, while offering sufficient flexibility to attract talented candidates to the most challenging roles and organisations."
The guidelines setting out new penalties and rewards for Trust leaders will introduce learning from leading businesses in the NHS.
As set out in NHS England’s planning guidance published in January, NHS organisations will need to reduce their cost base by at least 1% and achieve 4% improvement in productivity and efficiency this financial year to deal with demand growth. As part of the plans, the government is also bringing together pay structures for senior managers at ICBs and NHS Trusts to boost consistency and align standards. Any Trust or ICB that fails to comply with the new guidelines will be required to publicly justify its decision in its annual report under a strict ‘comply or explain’ approach.
Isabel Lawicka, director of policy and strategy, NHS Providers, said: “It is vital that the NHS can attract and retain talented leaders. Pay is an important enabler of that. Trust leaders go to work every day determined to do their very best for patients and their local communities but the barriers many face as they try to deliver care are significant.
“Stretched finances, major workforce shortages, crumbling buildings, soaring demand, and deep-rooted health inequalities all have an impact on Trusts’ ability to provide the best care. It is right that NHS Trust leaders are held accountable for delivery and that where there are issues regarding performance, that these are addressed.
“There is a risk, however, that withholding Trust leaders’ pay rises could lead to unintended consequences. At a time when health leaders should be working together to deliver the NHS’ huge transformation agenda, the focus should be on supporting, retaining and recruiting talented leaders.
"There are some positives in the announcement. Salary increases for leaders who take up jobs in the most challenged Trusts are welcome and long overdue. Plans to give leaders the breathing space they need to turn around performance in challenged trusts are also welcome. This is more vital than ever as the government looks to launch and implement the 10-year health plan.
“As ever, the devil will be in the detail. The announcement raises a number of questions including how these complex new pay arrangements will be implemented, the decision to link financial turnover to pay and the crucial role of Trust boards in this process."
