Senior NHS leaders could receive bonuses of up to 10 per cent of their salary, or face pay cuts of up to £15,000, under a major overhaul of executive pay by the Department of Health and Social Care.
Announced today [15th May], the government’s performance-based NHS pay reform framework is aimed at cutting waiting times, improving patient care, and driving greater accountability within healthcare leadership through introducing pay reform to those earning up to £299,250 annually.
NHS Chief Executives who deliver measurable improvements and reduce backlogs will be financially rewarded, while those in charge of failing trusts may see their pay docked by as much as £15,000 or even face dismissal if standards are not met.
Health Secretary Wes Streeting said the pay reforms are designed to ensure taxpayers’ money is spent effectively, describing the approach as “carrot and stick”, a management technique that uses both rewards and punishments to motivate people.
He 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”, he said.
He continued: “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.”
In addition to performance-related pay, the government will refresh the entire pay band system for senior managers to attract and retain effective leaders. Temporary salary uplifts of 15 per cent, worth up to £45,000, will be offered to attract top talent into struggling NHS trusts with leadership vacancies.
The most senior leaders will also be subject to a “comply or explain” rule – requiring public justification in annual reports if they do not adhere to new standards.
Sir Jim Mackey, Chief Executive of NHS England, backed the reforms, stating that linking pay to performance is standard in most sectors and should apply to the NHS, given its reliance on public funding.
He stated: “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.”
The changes follow some of the most ambitious efficiency targets in NHS history, introduced to help achieve these goals and improve patient care. According to NHS England’s Planning Guidance published in January, organisations must reduce their cost base by at least 1 per cent and improve productivity by four per cent this financial year to tackle demand growth.
The announcement has drawn criticism from the senior Tories, with Shadow Health Secretary Edward Argar condemning the plan – arguing it prioritises management perks over patient care.
Argar said: “NHS executives are being handed generous rewards for meeting targets they were already expected to deliver.”
He continued: “At a time when families are being squeezed by Labour’s reckless and irresponsible Jobs Tax and Winter Fuel Payments being snatched from vulnerable pensioners, it’s hard to justify funnelling public money into bonus pots for senior managers, rather than frontline care.”
The changes follow the Health Secretary’s announcement in November outlining that reforms would no longer reward failure in NHS leadership. The measures will take immediate effect as part of the government’s Plan for Change, which aims to cut elective waiting times from 18 months to 18 weeks through a mix of investment and overhaul.
Featured image via Simon Dawson / No 10 Downing Street
