In a sweeping reform aimed at improving NHS performance and cutting waiting lists, the government has announced a new performance-based pay structure for senior NHS leaders.
Under the new measures, failing trust leaders could see up to £15,000 docked from their annual pay, while top performers may receive bonuses of up to 10%.
The initiative, part of the government’s Plan for Change, is designed to drive accountability and efficiency across NHS trusts and Integrated Care Boards (ICBs), ensuring better value for money and improved patient care.
The reform introduces a “carrot and stick” approach, rewarding effective leadership while holding underperforming executives to account. CEOs who fail to deliver improvements or run trusts into debt could face financial penalties, in addition to existing disciplinary processes.
Conversely, leadership roles in struggling trusts will come with a temporary 15% pay uplift—worth up to £45,000—to attract top talent and drive turnaround efforts.
The government says the changes are inspired by high-performing private sector models and will bring greater financial discipline to NHS leadership. New rules will require NHS bosses to manage budgets responsibly and justify any failure to comply with the guidelines in their annual reports under a strict “comply or explain” framework.
The reforms also include:
- A refreshed pay band structure for senior managers
- Unified pay frameworks across ICBs and NHS trusts
- Stricter oversight of financial performance and productivity
Health and Social Care 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.”
The announcement follows NHS England’s 2025 Planning Guidance, which sets ambitious targets for trusts to cut costs by at least 1% and improve productivity by 4% this financial year. The new pay structure is expected to support these goals by incentivising high performance and discouraging inefficiency.
This bold overhaul is a key pillar of the Plan for Change, which aims to reduce NHS waiting times from 18 months to 18 weeks and deliver a more accountable, patient-focused health service.
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