The Government has unveiled a new performance-based pay system for NHS leaders, as part of a push for reform across the health service.
Under the new system, trust CEOs that are cutting waiting times and delivering improvements could be rewarded with bonuses of up to 10%, however those that are failing on these targets will have pay rises docked.
The changes will also temporarily increase pay by up to 15% in badly performing areas, up to £45,000, to try and recruit top talent at struggling trusts.
Pay bands for senior managers will be refreshed to attract and retain staff within the NHS.
The plans will also aim to establish greater accountability for senior managers across ICBs, as well as trusts, with their pay scales brought together to ‘boost consistency and align standards’.
Any ICB that does not comply with the new guidelines will be required to publicly justify its decision in its annual report under a ‘comply or explain’ approach, the Department of Health and Social Care (DHSC) added.
Health 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.’
Matthew Taylor, chief executive of the NHS Confederation, said that managers play a ‘critical role’ in ensuring the efficiency and effectiveness of NHS services and he welcomed the commitment to invest in leaders and ensure rewards ‘reflect the challenges they face’.
‘Effective leadership is crucial for reforming the NHS and ensuring its sustainability, and excellent leaders are going to be essential in achieving the government’s ambitions to improve performance and reform services,’ he said.
‘It is positive that there are plans to incentivise CEOs and senior managers to take on the most difficult jobs. It is vital that the most talented and best qualified leaders are encouraged and rewarded for turning around the most struggling organisations. We therefore welcome the challenged organisation recruitment premium as well as the proposals to recognise exceptional contributions.’
However, he added concern that some of the measures could be seen as ‘punishing’ NHS leaders.
‘The challenges facing NHS organisations can sometimes be due to historic or systemic issues rather than poor leadership,’ he said. ‘We must also be cautious when implementing new or existing policies around withholding pay if CEOs are deemed to fall short performance-wise, to ensure we do not undermine new incentives to encourage high performing leaders to take up roles in struggling organisations.’
ICBs were told in March they must cut their running costs by around 50% by October 2025 and to focus on reducing duplication when making cuts.
Last week it was revealed that the ICB running cost envelope will be reduced to £18.76 per head, and that this target must be reached by the end of Q3 in 2025/26.
Earlier this week, Bristol, North Somerset and South Gloucestershire (BNSSG) ICB has revealed plans to merge with Gloucestershire ICB as part of efforts to make cuts to the system.
