NHS launches crackdown on ‘revolving door’ of returning senior managers who received six-figure redundancy packages

Managers who work for large consultancy firms and have their time ‘sold back’ to NHS will also have to repay redundancy

Health service bosses are consulting on plans to make rules tougher for staff being rehired after getting large payments (Getty/iStock)

Senior NHS managers who are rehired by the health service after receiving six-figure redundancy packages could be made to pay the cash back, under a proposed crackdown by NHS bosses.

The rule change follows a number of high-profile examples where managers have received large payouts from the taxpayer but returned to work for a different part of the health service.

Matt Hancock, the health secretary, has criticised the practice and intervened in one example, but the NHS ultimately failed to recover the cash.

In draft proposals likely to come into force in time for the new financial year, NHS England, which is responsible for organising and funding for health services across the country, is planning to make it much harder for senior staff to keep hold of any large payments should they return to NHS work.

In addition, managers who go to work for large consultancy firms and then have their time “sold back” to the NHS will also be subject to the rules.

The change is being made as NHS England itself looks to axe 600 jobs to cut its running costs and complete a merger with sister organisation NHS Improvement, which is responsible for NHS hospitals.

Increasing numbers of local clinical commissioning groups, which pay for clinical services in each local area, are merging or working together, meaning more managers could be made redundant in the year ahead.

Existing rules have for some time said hospitals must ensure redundancy payments are repaid by managers hired after being made recently redundant by the health service.

According to the proposals, published for consultation by NHS England last week, the changes will specifically alter the main contract for NHS services and apply rules to all “very senior managers” across the NHS, not just those who work for provider organisations.

Very senior managers (VSM) are employed on their own terms and conditions, which are different to the majority of NHS staff.

The NHS England proposals said: “We now propose to broaden the scope of the provisions so that they also apply to redundant VSM rehired by commissioners and to any VSM who is rehired, following redundancy, by a management consultancy and whose time is then ‘sold back’ to the NHS.

“We are also proposing to expand the definition of NHS employer to ensure that a VSM made redundant by NHS Improvement is subject to the same regime as a VSM made redundant by other NHS organisations.”

The rule change will affect senior managers regardless of whether they are employed as senior managers or not when they return to the health service.

In October, the Health Service Journal revealed dozens of managers were receiving redundancy payments in excess of a supposed £160,000 cap. In total, 33 managers over the past three years received higher redundancies with nine members of staff receiving more than £200,000.

The managers were breaching the redundancy cap by also receiving money in lieu of working their notice, which can be worth six months of their annual salary.

Rakesh Marwaha, a former accountable officer of Erewash Clinical Commissioning Group (CCG), who received more than £200,000 in 2017, was rehired by NHS England up to September 2018, the HSJ reported last month.

In another case, Mr Hancock told Essex MP Mark Francois that Ian Stidston, who was paid £210,000 redundancy from Castle Point and Rochford CCG, would have to repay the money after he started work for Thurrock CCG less than a year later.

But it is understood no money was ever repaid, in part due to loopholes in the rules around staff who work for commissioner organisations like CCGs.

In October, Mr Francois, MP for Rayleigh and Wickford said: “I have become increasingly frustrated at the constant ‘revolving door’ of senior NHS appointments, with senior NHS bureaucrats turning over at a rapid rate, between extremely high-paid jobs.

“There is undoubtedly a ‘you scratch my back and I’ll scratch yours’ culture within the upper echelons of the NHS, which allows this practice to go on, often unchallenged.”