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NHSI promises tougher crackdown on ‘unpalatable’ interim senior pay deals

NHS Improvement (NHSI) boss Jim Mackey has promised tougher regulations to crack down on expensive interim senior executives and off-payroll tax deals, as the organisation published the first national framework to support home-grown leadership.

In a letter sent to service leaders, Mackey, who has captained a series of clampdowns on skyrocketing agency spending in the NHS, told bosses that hiring senior interims should only ever happen as a last resort.

Instead, the best option should be to promote from within, thus avoiding high sums paid to head-hunters and agencies.

For the senior interims already in place, or in cases where they are unavoidable, NHSI said they will have to engage in “performance management” and sign up to objectives “to demonstrate commitment to results and value for money”.

“The NHS has lots of talented and committed staff willing to take on important roles when organisations go through tough times,” said Mackey.

“But for the sake of patients and staff, interim directors need to be demonstrably high quality. In other sectors, ‘turnaround’ is a profession and the skills and experience required for those tough jobs are recognised formally with accreditation.

“We will help providers reduce the amount of money they spend on interims and cracking down on off-pay roll deals will help us get better value for money in the long run.”

He emphasised that the “real answer” to the problem of agency spending is making sure “we develop the talented and hard-working staff already in the NHS”, adding: “Investing in our people will make sure that our future leaders have the experience and support to take on these difficult but rewarding roles.”

Overall, analysis by the regulator shows the highest-paid interim CEOs charge around £1,700 per day, which adds up to an annual pay package of over £400,000. On average, interim CEOs get paid 61% more than their substantive counterparts.

The same applies to interim CFOs, finance directors and medical and nursing directors. Some interim medical directors, for example, are being paid around 117% more than their colleagues.

NHSI has promised to be “tougher” on interims who stay on expensive day rate deals for extended periods of time, although it did not specify what measures will be implemented.

Providers who also employ interims on off-payroll arrangements designed to dodge tax – which the regulator called “deeply unpalatable” for taxpayers and staff – are being urged to take note of forthcoming HMRC guidance.

National leadership framework

To back the ambition of supporting existing NHS staff, the regulator has published a national framework that seeks to “guide action on improvement skill-building, leadership development and talent management” for NHS-funded jobs.

The framework proposes actions to build “systematic” talent management processes to create a large enough staff pool of developed leaders available to fill leadership roles. As the King’s Fund told NHE, this places special focus on compassionate, inclusive and effective leaders at all levels.

It also promotes the development of leaders equipped to develop “high-quality local health and care systems in partnership”, as well as instilling “knowledge of improvement methods and how to use them”.

As a backbone, there must be “support systems for learning” at local, regional and national levels and “supportive and aligned” regulation and oversight.

Along with Jeremy Hunt, Mackey has long focused on driving down agency spending in the NHS at all levels, which in the last financial year was set to hit the £4bn mark. The DH introduced a “strict” agency spending cap last year – although many trusts initially failed to comply with them due to unavoidably high agency demand – and providers were recently told they were required to publish details on interim staff spend.

The agency cap is said to have saved the NHS £600m in its first year, although NHSI argued much more needed to be done to cut costs further. In Mackey’s letter to NHS bosses, he revealed the sector is currently on track to save £900m on agency by the end of the financial year.

“Ensuring that the NHS has strong, skilled leaders will also help reduce demand for these sorts of interim roles in the long-term,” NHSI concluded.

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