News / VSM local pay proposals rejected by Department

The introduction of market-facing pay for NHS very senior managers (VSMs) would risk limiting the pool of talent and jeopardising recruitment, the Department of Health has said.

In a submission to the Senior Salaries Review Body, which is considering how to link VSM pay to local labour markets, the Department said the government had made a compelling general case for market-facing pay and it believed there was a strong case for its application in Agenda for Change pay bands.

But employers in both NHS and private sectors did not pay senior staff according to their location. And given the few staff involved, the effect on the wider market was negligible. Private sector employers paid more for senior staff and while VSM was broadly competitive with NHS trusts and foundation trusts, it lagged rather than led the market price for senior NHS talent.

The Department said a new VSM framework, due soon, is based on national pay rates with some local flexibility. It said this was the right approach for VSM pay. ?

In a separate document, NHS chief executive Sir David Nicholson confirmed VSM performance payments for 2011/12 would still be restricted to the top 25% of performers, with an upper limit on an individual award of 5% of reckonable pay.