Mail wins crackdown on greedy NHS fat cats
Hospital chiefs banned from retiring for a day ... then returning on even higher pay
JEREMY Hunt will today seek to end the scandal of fat cat pay in the NHS, warning the deals received by some health service chiefs are unjustifiable.
The Health Secretary’s crackdown follows revelations by the Daily Mail’s Investigations Unit about the tricks used by some NHS managers to boost their pay to obscene levels.
Reporters carried out the most comprehensive audit ever of trust accounts and found executives were using loopholes to claim huge perks and exploit the NHS pension scheme.
Hospital bosses gave themselves £35million in pay rises during the worst funding crisis in a generation.
Last night sources close to Mr Hunt said action was being taken ‘in light of the Daily Mail’s ongoing investigation into the revolving door’ that allows NHS staff to technically retire for 24 hours before retaking their jobs.
Jeremy Hunt will today unveil a package of tough measures to end the scandal of NHS fat cat pay.
The Health Secretary is warning that the salary and perks pocketed by some executives are unjustifiable.
His crackdown follows a series of revelations from the Daily mail’s Investigations Unit that senior executives are secretly using loopholes and other tricks to claim huge perks and exploit the NHS pension scheme.
Despite the worst funding crisis in a generation, hospital bosses have handed themselves £35million in pay rises.
A source close to mr Hunt said the action was being taken in the light of the Daily mail’s reporting, adding: ‘These kind of retire and come straight back deals are indefensible and have got to stop.’
The tough measures will be contained in a letter from mr Hunt to hospital trusts and clinical commissioning groups today. It will include:
The closure of a loophole that allows NHS managers to ‘retire’ for 24 hours in order to claim a tax-free lump sum from their pension on top of their salary;
Hospitals will be barred from giving generous pay rises to managers who opt out of the NHS pension scheme;
A national framework for top hospital pay will be introduced with the aim of reducing the number of managers paid more than the Prime minister from the current level of 598;
mr Hunt will also order a crackdown on the use of agency staff and private consultants in the NHS – warning it is not financially sustainable.
The Health Secretary said: ‘The NHS needs to make every penny count, so it is right to question why so many staff are paid more than the Prime minister.
‘I recognise that there are some great leaders in the NHS and people who do a good job for patients should be rewarded fairly.
‘But the NHS is a public service and needs to show restraint on handing out generous pay packages as a matter of course.’
There was an outcry when the mail highlighted a number of ruses used by some to boost pay to astonishing levels.
Beneficiaries included Peter Herring, who returned to his £185,000a-year job as chief executive of the Shrewsbury and Telford Hospital after ‘retiring’ for a day.
The move allowed him to claim a £252,000 tax-free lump sum from his pension pot before heading straight back to work. Under the new rules managers will have to agree to an undertaking that they will not return to work in the NHS if they take part of their pension.
If they do later take a job with the NHS their pay will be capped so that the combined value of their pay and pension is not worth more than their salary when they left. Hospi- tals will also be barred from awarding big pay rises to bosses who opt out of the NHS pension scheme.
The move is attractive to some managers who have already accrued seven-figure pension pots, particularly following reductions in the amount that can be saved tax-free.
Lorraine Lambert, chief executive of South Tyneside NHS Trust, opted out of the NHS pension scheme as her pension pot approached the then tax-free limit of £1.5million.
To ‘compensate’ her, she received a £20,000 salary increase, taking her pay to £185,000 a year.
Hospital boards have also been ordered to review executive pay at every hospital in england in order to establish the scale of the problem.
Tricia Hart, chief executive of South Tees Hospitals NHS Foundation Trust, received a package worth £1.25million in 2013-14.
This was made up of a salary of at least £220,000 and pension-related benefits of more than £1million, the trust’s annual report shows.
The Department of Health does not have direct control over hospitals operated as foundation trusts, which now make up the majority.
Trusts wanting to pay managers more than the £142,500 salary of the Prime minister will have to write to mr Hunt explaining why they think the move is justified. more than a fifth of all directors in the NHS currently earn more than David Cameron.
And hospitals will be warned that contracts must include new ‘less generous’ redundancy terms.
A government source said the NHS had to show it understood the public mood on pay.
‘It is a public service and must show restraint’