Very senior managers

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This pages contains Information for employers on very senior managers (VSMs) and the VSM pay framework. 

VSMs include:
  • Chief executives 
  • Executive directors, with the exception of those who are eligible to be on the consultant contract by virtue of their qualification and the requirements of the post 
  • Other senior managers with board level responsibility who report directly to the chief executive
  • In large Arms-Length Bodies (ALBs), other staff.

NHS Trusts and NHS Foundation Trusts are free to determine their own rates of pay for their VSMs.

VSM pay in Department of Health (DH) ALBs is subject to two national pay frameworks - either the 2006 or the 2012 framework or, in the case of some executive non-departmental bodies (ENDPBs), local pay frameworks.

VSM pay in ambulance trusts that have not attained foundation trust status is subject to the 2006 pay framework, including the requirement to seek Treasury approval (via DH) for all pay in excess of £142,500 p.a.  This requirement also applies to non-foundation NHS community trusts.

The pay framework for VSMs in Special Health Authorities and those ENDPBs not using local pay frameworks, was published in May 2012 and updated in July 2013.  This framework follows the recommendations of the independent review of the 2006 framework and is based on a job evaluation scheme specially adapted for use in senior NHS posts.  The new framework also takes account of the Senior Salaries Review Body (SSRB) report on the pay of chief executives in ENDPBs and the Will Hutton Fair Pay Review.  The DH also published a Job Evaluation Handbook and frequently asked questions.

VSM 2014/15 and 2015/16 Pay Award 
The government announced on 13 March 2014 that it could not accept the recommendation of the SSRB for a 1% increase in pay for very senior managers employed by ALBs or ambulance trusts that have not attained foundation trust status.  The Chief Executive of the NHS Trust Development Authority (TDA) wrote to Chairs of all NHS non-foundation trusts on 28 May 2014 to inform them that the government has advised that there should be no increase in 2014/15 in pay of VSMs covered by the national VSM's pay framework.  The rates relating to 2013/14 will still apply to VSMs in ambulance trusts and community trusts, as they continue to be subject to the national VSM Pay Framework until their organisations achieve foundation trust status.

The letter strongly encouraged NHS trusts to consider their approach to pay this year and to reflect the same approach as that being applied to VSMs covered by national pay frameworks, in the context of the Government's wider approach to senior pay in the public sector and in the light of decisions made for other NHS organisations.

The Government decided that VSM pay should also be frozen in 2015/16.

Letter from the Secretary of State to NHS Chairs
On 2 June 2015, the Secretary of State wrote to the Chairs of all NHS trusts, foundation trusts and Clinical Commissioning Groups (CCGs) urging restraint over VSM pay and announcing a range of initiatives, including:

  • a requirement for Ministers to see all proposals for VSM pay above £142,500 before appointments are confirmed;
  • the development of a national framework for VSM pay in the NHS;
  • the introduction of a limit on the daily rate payable to an off-payroll interim VSM and request for rigorous compliance with Her Majesty's Treasury guidance on off-payroll engagements.

The Secretary of State set out his expectation that there should be no significant difference in the terms and conditions of senior leadership teams and those working on the front line and his view that it is not acceptable that some senior managers experience high levels of pay, with year-on-year increases, as a matter of course.

This programme of work on VSM pay is now being taken forward by the Department of Health.

Notice Periods for VSMs
The notice periods for VSMs must be no more than six months. 

Approval process for making severance payments to VSMs
Please refer to the Guidance for employers within the NHS on the process for making severance payments.

Redundancy repayment for VSMs
The 2016/17 NHS Standard Contract (the contract mandated by NHS England, and used by commissioners for all healthcare services contracts) now requires very senior managers to repay contractual redundancy payments if they have started employment with another NHS employer within 12 months. The exception to this, is if the employment is for a period of 15 days or less. 

The General Conditions of the Standard Contract say organisations offering employment as a very senior manager must ask the individual if they have received contractual redundancy pay for a VSM post from a previous NHS employer within the last 12 months. If so, the organisation must require the individual to identify which NHS employer the redundancy payment was from and notify that organisation of their offer of employment as a VSM.

The prospective employing organisation must then ask the individual to make arrangements to repay their redundancy payment (or part thereof), or include in their terms and conditions of employment that they have agreed to repay the required amount. The General Conditions contain a detailed formulae for calculating the repayment sum.

The employer must not enter into any agreement that aims to avoid this requirement, and if they fail to comply, the employing organisation must pay the individual's sum to the previous employer.

The full detail and provisions can be found in the 2016/17 NHS standard contract General Conditions starting on page seven, section 5.15.

Chairs and non-executive directors
NHS Foundation Trusts are free to set their own rates of remuneration for their chairs and non-executive directors.  The level of remuneration paid to the chairs and non-executive directors of NHS trusts is set by the Secretary of State for Health.  The latest rates of remuneration, together with various other information on chairs and non-executive directors can be found on the NHS Trust Development Authority website.

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