The union for health and care managers

Home  >  News & Campaigns  >  Features  >  VSMs: NHS faces boardroom exodus without fair rewards
Wednesday 19 April 2023

NHS faces boardroom exodus without fair rewards for senior staff

By Craig Ryan

Staff shortages, plunging morale and shrinking pay packets are pushing more and more board-level NHS managers towards the door. A fair pay award would help to stabilise NHS leadership – just when the service needs it most

Yellow 'You Matter' sign

One senior manager, a veteran of 35 years NHS service, put it starkly: “You could always see a way back before. Not now: no hope, no value. Ten years of falling behind has to stop.”

While not all bad, MiP’s annual survey of board-level members makes grim reading for anyone who cares about leadership in the NHS. Many findings are similar to last year: low morale, alarming staff shortages, frustration about pay, despair over spiralling workloads. But a worrying fatalism has crept in, and anger too, particularly at the casual denigration of NHS management by ministers and their allies in the media.

In January, MiP’s newly-formed focus group of board-level managers met to consider the survey results and the union’s evidence to the Senior Salaries Review Body (SSRB) for 2023. Afterwards, MiP chief executive Jon Restell described the mood: “Board-level managers are burnt out, fed up and seriously considering their options,” he said.

A significant loss of senior leaders

Since 2020, the SSRB has made pay recommendations for around 2,000 very senior managers (VSMs) in NHS trusts and ICBs, and 500 executive senior managers (ESMs) working for NHS England and other arm’s-length bodies.

The SSRB has shown more appetite for serious analysis than the NHS Pay Review Body, which covers Agenda for Change staff, and more willingness to tell hard truths to the government. Last year, it politely brushed aside government claims that an executive pay rise wasn’t affordable, pointing to “evidence of depressed morale” and “a risk of a significant loss of senior leaders”.

But MiP’s soundings suggest the SSRB has had little impact so far. Almost half of members report recruitment and retention problems with VSMs/ESMs in their organisation – operational, digital, financial and clinical management seem worst affected – and three-quarters say morale has worsened further over the last year. “[Vacancies] are attracting far fewer applicants and those that do apply have less experience and need training,” wrote one survey respondent. Another warned that staff are being promoted to board-level jobs “well before they are ready”, with a negative impact on teams and productivity.

Simultaneously, the NHS faces a looming “retirement bulge” among senior leaders. NHS England reckons that 40% of board-level managers are already eligible for retirement, and MiP’s survey found that two-thirds were thinking about bringing their retirement forward.

But perhaps most striking is this: fewer than one in five executives haven’t seriously considered leaving the health service in the last year. The NHS has a senior management cadre where it’s the norm to have have one eye on the exit.

Fair pay for senior staff

It’s not hard to see why. “Executive pay has declined over the last decade, while pensions tax is undermining another key part of the package,” explains Restell. “Having moved heaven and earth during the pandemic, senior managers now face Herculean challenges with elective recovery, more re-organisation and dangerous staff shortages. Worse still, the same politicians who thank NHS managers in private for their efforts then relentlessly attack them in public.

“Senior staff need to be paid fairly for the work they do,” he adds. And if the work is less rewarding – as MiP members are clearly indicating it is – pay becomes a more important factor.

No MiP member expects to earn top private-sector dollar, but let’s remind ourselves of the staggering differences. FTSE 250 firms – so-called ‘mid-caps’, including household names like Aston Martin, Direct Line and Dr Martens – have average turnover and staffing levels similar to those of a medium sized NHS trust. The average salary for a FTSE 250 chief executive was £1.7 million last year, while their chief financial officers earned an average of £1 million. Both saw average rises of more than 20% in 2022.

These are comparable jobs. Yet, the average salary for board-level NHS manager is £141,000, with only a handful of very senior chief executives earning over £250,000. And as the NHS Confederation noted recently, compared to even the largest private corporations, “if anything, the challenges, stresses and risks associated with managing NHS organisations are even greater”.

“NHS executives are well paid as public servants, but relative to the private sector the remuneration is very poor,” one member responded in MiP’s survey. “The pressures and political context are very challenging and the risks are high.”

Such disparities are nothing new. But a decade of below-inflation pay rises has led many VSM/ESMs to consider a future outside the NHS. In 2021, executives received no pay rise at all; last year’s average award was just 3%.

At 13.5%, NHS executives also pay far higher pension contributions – for broadly similar benefits – than the other public servants covered by the SSRB: senior civil servants pay 7-8%, while senior military officers pay no contributions at all. Many also face what MiP describes as “punitive” tax bills if their pension contributions surpass the annual allowance set by the Treasury.

The pension tax regime causes considerable resentment among MiP members – not least because special rules mean senior doctors are treated more favourably – and some executives say it costs them money to come to work. “It’s just perverse, insane, mad,” wrote one. “Importantly, it stops people working in the NHS and people are reducing their hours.” But despite the SSRB saying last year it was a “major concern” that so many executives were leaving the NHS scheme, MiP’s survey found 58% were still considering dropping out. Clearly, the problem had not gone away, although measures announced in the 2023 budget – including an increase in the annual pension savings allowance and the complete abolition of the lifetime allowance – have been welcomed by MiP as a big step in the right direction.    

Too much grief

MiP’s focus group were more worried about retaining and motivating existing executives than recruiting them. As one member put it: “The elixir of the executive suite is still a powerful draw for professional NHS managers. The challenge is sustaining your motivation once you’re there”.

And nothing saps motivation faster than feeling you’re not valued at work. This year’s survey found a marked increase in the number of members complaining about “denigration” and “vilification” of NHS managers by politicians. While most felt valued by colleagues, 77% didn’t feel valued by ministers.

NHS managers are “constantly belittled, undermined, blamed and put down in public” by ministers, wrote one member, while another complained managers were treated as “pariahs and parasites” on social media. A third warned morale would not improve until ministers stopped “looking to scapegoat managers for issues they know, but cannot publicly acknowledge, are down to them or national policy.”

Members also complained about being “micromanaged” by NHS England or the Department of Health and Social Care,”unrealistic demands” from ministers and system leaders, “constant pressure” and “disgraceful” working hours. With wonderful succinctness, one simply said there was “too much grief”. Another confided bleakly, “I’m nearly done. I am now receiving mental health support but am too ashamed to admit that.”

Leadership matters

The bottom line is that 83% of managers surveyed said they expected standards of patient care to worsen over the next year. Leadership matters: just look at the Health Foundation’s recent research, which found that high senior management turnover was a significant barrier to improving performance, or the King’s Fund’s findings that trusts rated as ‘inadequate’ tend to have more vacancies and higher turnover rates among senior staff.

“It’s long past time that the government recognised what these staff do and rewarded and valued them properly,” says MiP chief executive Jon Restell. This means “a meaningful pay rise” for VSMs/ESMs and, importantly, for it to be paid on time, as well as action to reduce the impact of the pensions tax. MiP also asked the review body to explicitly address “the corrosive impact of manager bashing on recruitment, retention and morale”.

Taken together, recruitment and retention difficulties, the retirement bulge and plunging morale are a significant threat to the stability of NHS leadership, just when the service needs leadership most. The SSRB needs to take this seriously, but the government must also take responsibility for the denigration, excessive workloads and pay erosion that is undermining the morale and motivation of these experienced and expert public servants.

A vote of no confidence from the board

Other key findings and comments taken from MiP’s 2023 survey of board-level managers.

49% would not recommend an NHS management career

Poor pay, poor work life balance, poor career choice

It can actually be very satisfying at times but right now it’s just trying to keep your head above water – at best.

45% are not satisfied with the NHS executive pay system

ESM pay bands need to be more transparent... I have never received any terms and conditions relating to ESM pay

77% say an above-inflation pay rise would make them more likely to stay in the NHS

There’s a small talent pool, we’re competing with each other and can’t pay market rates in some areas.

71% say they’re struggling to recruit and retain Band 8 and 9 managers

All posts are in short supply, people know they can earn more and have more freedom by working as contractors or changing sectors altogether.

82% say colleagues are more likely to leave than a year ago

People are mentally and physically exhausted and the NHS is falling apart – staff are leaving faster than we can recruit.

If you'd like to read more from MiP, sign up to receive our free monthly emails – we’ll keep you up to date on news and events in health and care management

Copyright © 2022 MiP