Three things you should know about Jeremy Hunt’s pop at excessive NHS managers’ pay

Who could disagree with the secretary of state's outrage at the extortionate salaries some NHS staff are earning?

Guillermo Thomas is a freelance journalist based in London

Who could disagree with the secretary of state’s outrage at the extortionate salaries some NHS staff are earning?

Did they really need to pay £211,000 a year to head of NHS in England, David Nicholson? Should senior figures in the publicly-funded quangos, including the Care Quality Commission and Health Education England, earn more than the Prime Minister’s salary of £142,500?

At a time when the rest of the workforce is enduring years of pay freezes and a below inflation pay cap, perhaps the Daily Mail’s shock is warranted. But here are three points worth bearing in mind:

1. NHS staff, like other public sector workers, are paid less than private sector counterparts

Top NHS managers, responsible for some of the largest organisations in the country, are unlikely to be any different. Public sector employees account for less than 1 per cent of the top 1 per cent of the income distribution scale, according to the 2011 government inquiry headed by Will Hutton, which looked at high pay in the public sector.

Put another way, approximately one in 85 workers in the private sector earn over £150,000 a year, compared to just one in 280 public sector workers.

2. Many of these high flyers working for the NHS quangos Mr Hunt’s predecessor Andrew Lansley created, or expanded.

Far from a bonfire of the quangos promised by the government, in the NHS at least they’ve been growing like mushrooms; and with them their highly paid top staffers.

Monitor, charged with imposing competition on the NHS, is one of them. Its CEO David Bennett is on £220,000. His number two, David Bennett, is on £190,000. Monitor and another quango, the Care Quality Commission, both expanded under the Lansley reforms, seeing staff costs rise by £28m in 2011/2012, according to a Channel Four investigation.

Even the new 200 plus GP-run Clinical Commissioning Groups (CCGs) – supposedly independent of government – have to report to the NHS Commissioning Board.

This new quango, in addition to directly paying close to six figures for several execs, has many other exceptionally well-remunerated managers on the payroll (including the above mentioned Nicholson) from elsewhere in the NHS – at huge expense to the taxpayer.

In total, the NHS Commissioning Board is estimated to be costing £400m in management costs.

3. Will Jeremy Hunt be extending the pay cap to the growing number of top executives indirectly financed by NHS money, such as SERCO, Capita, Virgin and Circle?

With times tough in what we might call the real private sector market, public sector contracts are a must for any multinational that plans to still be around in the next ten years. And there’s no budget as big as the  NHS budget, with billions of pounds worth of services currently out for tender.

Indeed, in the interests of fairness, why doesn’t Mr Hunt agree with his ministerial colleagues that all public sector contractors should sign up to a top salary cap?

Any genuine action on excessive pay seems unlikely for a government whose policy can be summed up by Osborne’s current opposition to the EU’s bid to impose a cap on bankers bonuses. But wage restraint is quite right in the NHS – despite it delivering what most international studies consider an extremely efficient service.

Whether Jeremy has thought through how all this may affect his chances of getting an 11 per cent pay rise as an MP, we don’t know. Perhaps, when one is worth £4.8 million, a seven digit man like 18 out of his 29 cabinet colleagues, it scarcely matters.

Which raises a final question – is Jeremy Hunt and his government really best placed to lead the charge about excessive pay? I think we all know the answer to that one.

5 Responses to “Three things you should know about Jeremy Hunt’s pop at excessive NHS managers’ pay”

  1. henrytinsley

    So the Mail was shocked? Well, Paul Dacre earns £1.8 million, and has a £14.8 million pension pot. Rather more than anyone in the NHS.

  2. GO

    Funny, isn’t it, how seven-figure salaries for top staff in the private sector are a wise investment because they’re essential to attracting the sort of exceptional people who can drive up productivity etc., while six-figure salaries for top staff in the public sector are a wasteful extravagance that do nothing but line the pockets of ‘fat cats’? I wonder how that works. Presumably either public sector organisations don’t need exceptional people in leading roles, or it’s not in fact necessary to offer very large salaries in order to attract exceptional people.

  3. henrytinsley

    £211,000 to run NHS England is hardly outrageous when Boris Johnson apparently gets £250,000 to write a weekly article for the Telegraph. And of course any number of second rate corporate bureaucrats earn more than this.

  4. Sparky

    The validity of that comparison is undermined somewhat by the fact that the Daily Mail is a business, not financed with public funds.

  5. henrytinsley

    So what? Are you really saying that you should be paid more for editing the Daily Mail (with its declining circulation) than the NHS? Free market fundamentalism gone mad.

    Actually, the problem is that the Mail editor is grossly overpaid, as are many senior people in the private sector. It’s got out of control.

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