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ICSs must seek permission to bust £170k pay cap for directors

Published on: 20 Apr 2022

NHSE’s executive pay framework sets “operational maximum” pay levels for executive roles on NHS integrated care boards, the statutory NHS body which forms part of each ICS, which vary based on the population covered.

The document seen by HSJ, dated last month, covers ICB executive posts excluding chief executives, who have already been appointed and where the advertised pay ranged up to £240,000.  

It says any ICB wanting to pay above the relevant “operational maximum” – or above a universal ceiling of £170,000 – must “present a pay case” to NHSE and to the Department for Health and Social Care, according to the document seen by HSJ and dated last month.

It warns that paying above the thresholds will delay appointments, stating: “Appointment announcements should not normally be made until the outcome of the pay case has been agreed.

“Where DHSC or ministerial approval needs to be sought, candidates should be made aware that this will lead to a delay in confirming their appointment, in order to manage expectations.”

It also warns: “For clarity, this [central permissions] applies even if the executive is transferring from a previous role on the same salary. It also applies in the case of executives appointed on a part-time basis whose actual pay would fall below the operational maximum or £170k.

“In such cases, the full-time equivalent salary should be used to understand if the proposed salary requires a pay case to be completed.”

Promotional pay can be offered, but if it exceeds the threshold, central permission must be sought “in all circumstances”.

Role complexity ‘around or above’ providers

Separately, the framework document states that a job evaluation by accountancy firm PricewaterhouseCoopers decided the proposed ICB executive role descriptions were “around or above” similar roles in NHS providers in terms of role “complexity”.

It also looked at the comparative flexibility of ICB executive roles, placing finance directors top – considered the “most complex” role – with medical directors and directors of nursing just below.

The complexity of other executive roles, including chief people officer, and chief digital and data officer, fell “immediately below” those.

It noted however that “the actual difference in complexity between roles on the board is not significant (ie all roles are considered within the same career level”).

Evidence to the senior salaries review body last year suggested that, in 2019, some salaries in provider trusts exceeded the proposed ICB caps.

At large acute trusts with a turnover of £750m or more, the median salary for medical directors was £192,500, and the upper quartile value was £209,000. For finance directors at these large trusts, the median was £172,500 and the upper quartile £190,500. This was £163,500 for directors of nursing, with the upper quartile being £168,000.

The guidance also points out that the national pay framework for very senior managers’ is currently under review and expected to be updated later this year, so it covers both ICBs and providers together.

NHSE told HSJ in a statement: “The number of statutory boards is reducing by three quarters compared to a decade ago – going from more than 200 to just 42 – ensuring there are fewer senior management roles.

“Salaries will reflect local challenges, and actually, the people in these roles will have greater responsibility for the health of thousands more people at a reduced cost to taxpayers.”