Revealed: The lucrative exit packages and rising wages for Norfolk and Waveney’s NHS chiefs
PUBLISHED: 07:15 25 August 2016 | UPDATED: 11:37 26 August 2016
Spending on wages for senior health bosses in Norfolk and Waveney has risen by nearly 15pc in the last three years – despite demands for millions of pounds to be saved locally.
Wages for senior members at the five Norfolk and Waveney Clinical Commissioning Groups (CCGs) rose to almost £4m last year, compared with £3.4m in 2013/14. In Suffolk, which has two CCGs, the wage bill was £1.3m.
Our region’s CCGs, whose budgets range from £220m-£320m, pay the NHS or private companies for health services the patients in their area need.
In response to the rise, CCGs said they were working closer together to deliver better value for tax-payers’ money and making savings where possible.
This summer, South Norfolk and North Norfolk CCGs said they would share a chief officer and chief financial officer.
The five CCGs are also tasked with making more than £50m of savings this year – because rising patient demand is putting an increasing strain on health finances.
The growing need to save money comes at the same time as the work on a new five-year health and social care plan for Norfolk and Waveney – as reported by this newspaper yesterday.
The plan, known as the Sustainability and Transformation Plan (STP), puts together chiefs of all the CCGs, hospitals, and other NHS organisations in Norfolk and Waveney, who must set out how the region’s health services can be delivered sustainably.
However as local NHS budgets become increasingly squeezed – an investigation by this newspaper has found examples of high spending on wages and exit packages.
These examples include:
- A 14.6pc rise in the wage bill for senior CCG members across Norfolk and Waveney in the last three years, but a 5pc drop in Suffolk.
- One health chief pocketed £57,000 for six months after resigning.
- One financially-troubled CCG spent £20,000 on a ‘turnaround director’ who was in post just one month.
- The same CCG, which fell into a £6m deficit last year, paid out exit packages worth £102,000 while cutting patient services.
All CCGs’ expenditure is audited by external accountants and scrutinised by NHS England.
Clive Lewis, the Labour MP for Norwich South, questioned why expenditure on wages was higher in Norfolk than Suffolk.
He said: “I’m sure many of these managers would argue that one of the reasons they deserve to be paid so handsomely is because they say that’s the going rate for people who can take the difficult decisions to make some our most complex and important organisations work effectively. I don’t think that they are earning their money here if the outcome is tens of thousands of pounds going on exit packages and golden handshakes when that’s not happening in the neighbouring county.”
While details of STP proposals are yet to emerge, some observers have asked if money could be saved by merging CCGs to avoid duplicating administration costs such as high wages and exit packages.
Speaking at a public meeting earlier this summer Norfolk County Council health and wellbeing board member Joyce Hopwood said ideas on a “major scale” were needed for the county’s NHS to meet future demand, and suggested combining CCGs into one body would save a considerable sum of money.
Councillor Roger Foulger added he believed reducing the number of CCGs to three would be more appropriate.
However the CCGs, who delivered around £50m in savings last year, say there are three distinct health systems in Norfolk, each with its own acute hospital (King’s Lynn, Norwich, and Great Yarmouth).
Chiefs also say the health needs of each CCG population differ from each other – meaning more CCGs offer a tailored service to patients.
What the CCGs said
Norfolk and Waveney’s health bosses today said they were working closer together to cut costs.
A spokesman for the North and South Norfolk CCGs said: “Where services are shared, one CCG co-ordinates commissioning and where countywide services operate we work in joint arrangement with all the CCGs and Norfolk County Council.
“The CCGs share many services to save money and have arrangements in place where these decisions can be made jointly.”
In West Norfolk, where its chief officer, Sue Crossman, was paid £115,000, a CCG spokesman added: “Due to the very difficult financial climate, we are all looking at a variety of ways to increase our operational efficiencies and keep costs down. In West Norfolk, we are planning to do this through closer integration of local organisations, creating a stronger, more resilient health and care structure as well as reducing the overall costs across the locality.”
A Norwich CCG spokesman said the organisation’s increase in spending on senior managers’ wages was due to a period of “management transition” which was a “one-off”.
This was caused by the CCG’s chief officer Jonathon Fagge going on extended leave (see panel to the right), resulting in Jo Smithson taking his responsibilities and an interim finance director hired to replace her.
“The CCG ended 2015/16 in good financial shape and with strong leadership as a result of these temporary but necessary measures,” the spokesman said.
Addressing the rise in staff costs at Norwich CCG, the spokesman added: “While staff costs have risen, running costs overall have fallen to just 2pc of total CCG spending.
Meanwhile Great Yarmouth and Waveney CCG defended its decision to pay its chief officer more than national guidelines suggest.
Andy Evans receives £135,000 per year, but NHS guidelines state chief officers for CCGs with a population of less than 500,000 should be paid a maximum of £120,000.
A spokesman for the CCG said: “The local remuneration committee set basic pay for the chief officer at the upper end of the suggested pay range, and also agreed to an additional 10pc retention allowance after taking into account his experience.”
The national picture
NHS England, which regulates CCGs, said the scope of a salary and exit package is set by national NHS policy.
It said CCGs’ running costs, which includes wage bills, has not increased in real terms since CCGs came into existence in 2013. However health secretary Jeremy Hunt announced plans to curb spiralling rates of pay last year when he ordered a crackdown on NHS senior management pay packets.
He wrote to every hospital and CCG where he called for a number of immediate actions, such as:
Ensuring all newly-appointed very senior managers are only eligible for new and less generous redundancy terms.
Abolishing the practice of increasing the pay of very senior managers if they have opted out of the NHS pension scheme.
Asking senior managers to be more open about how much they are paid.
Mr Hunt also set out new rates for senior pay, a Department of Health spokesman said.
•Do you have a story for the investigations unit? Email firstname.lastname@example.org