– December 2005.
The reported losses at the Primary Care Trusts (PCT’s) are the result
of massive senior management pay rises.
It was a poor attempt at role-play that recently revealed Patricia Hewitt, distinctly over-playing the humility card. The issue, of course, was the NHS budget deficit of some £620m.
The NHS has enjoyed a significant cash bonanza in recent years which has seen the total budget increase from £65bn in 2002/3 to a predicted £87bn by March 2006. It is the intention that the budget will grow further to £107bn by 2007 thereby bringing the UK in line with other European countries in terms of health expenditure.
Pundits have cited many examples of where the extra cash has gone. None appear however to have even bothered to take a cursory inspection at the massive increases that have been paid out to senior managers following the Labour Government’s introduction of Primary Care Trusts to run the NHS from 2000 onwards.
These are the very same senior managers,
of course, who have been unable to manage the budgets they have been given.
Primary Care Trusts have at their core the highly desirable ethos of ‘a
patient led NHS’. Although the figures available for scrutiny are, strangely,
incomplete, there are at present 302 PCT’s standing alongside another
328 NHS, Foundation and Ambulance Trusts to make a total of 630 trusts running
the NHS nationally.
Each of these Trusts is run by a Board of Directors alongside a team of Senior Managers. A minimum of £100,000 per annum appears to be the going rate for the Chief Executive with six or seven other Directors at £70,000 each even though in some cases these top-heavy organisations have only a few hundred employees.
And not unexpectedly it appears that each year the sum of money paid has continued to increase. For example remuneration for senior officers and members of the North Manchester PCT totalled between £330,000 to £410,000 in 2001-2002 and had risen by 31% in 2004-2005 to £425,000 to £540,000. Chief Executive Adrian Mercer earned between 95 and one hundred thousand pounds.
Just down the road at Central Manchester PCT it cost taxpayers between £840,000 - £960,000 in remuneration in 2004-05.
Meanwhile at Oxford City PCT Jonathan McWilliam, Director of Public Health, saw his salary jump by over 50% from just under £100,000 in 2003—2004 to over £150,000 in 2004-2005.
The result appears to be that each trust is now paying out on average around £150,000 to £200,000 extra in salaries a year since their establishment, a figure corresponding to well over £100 million nationally.
But it is not only on salaries that those responsible for the running of the NHS have seen a massive hike. Pension entitlements have literally gone through the roof, money which could have been used to pay for more operations, more nurses and cleaner wards has been siphoned off to make sure that any senior manager forced to give up their already lucrative posts will not be forced on to the miserly basic state pension.
For example, Jonathan McWilliam had at the end of March 2005 already accrued a total pension at the age of 60 of £175,000, corresponding to a pension cash equivalent of £609,000. Yes don’t blink £609,000! Oxford City PCT senior managers have accumulated a total exceeding £3.6 million, a jump of over half a million from £2,970,000 a year previously.
At South Manchester PCT and nearby North Manchester PCT the leap was nearly £400,000 at each of them to a cash equivalent of £3,395,000 and £4,551,000 respectively.
No wonder the Trust’s and the NHS are in dire financial straits because if these leaps of around £500,000 a trust are multiplied across all the trusts then that’s an extra £300 million plus, and it’s a figure that’s sure to grow year on year.
Some examples
PCT
Chief Exec’s salary
Pension cash equivalent transfer value of senior managers Senior Manager
And PCT board members salaries % increase
on senior managers remuneration
Derwentside £95-£100,000 £2,021,000 £620,000 to £750,000
35% in a year
Darlington £90,000 to £95,000 £555,000 – total accrued
£615-£725,000 Require previous annual report
Oxford City £95-£100,00
£3,609,000 £625-£760,000 Up 19% in one year
North Manchester £85-90,000 £1,113,000 £425,000 - £540,000
Up 31% in 3 years
Central Manchester £110,000 - £115,000 £4,551,000 £840,000
– 960,000 Up 9% in one year
South Manchester £95,000 to £100,000 £3,395,000 £420
- £500,000 [*] Up 11% in one year
In addition of course PCT start up costs were obviously astronomical and included
the acquisition of new, and often, palatial premises to house the many new Trust
HQs.
In Leeds for example, the North West Leeds PCT has recently acquired the delightful North West House, a four - storey monolith in Art Deco style. The building currently houses some 250 administrative staff as well as the management of the trust. Lease and service costs are in the region of £250,000 per annum.
The figures would give cause for concern in normal circumstances but are intensified by the knowledge that it is now apparently the intention to knock down all these fledgling organisations in favour of amalgamated ‘super PCTs’.
For example, six PCTs in Northumberland and Co Durham are earmarked to be amalgamated into one. Similarly in Leeds, Manchester and most controversially, Oxfordshire. Here, an Action Committee recently lobbied the House of Commons Health Select Committee when the Thames Valley Strategic Health Authority suddenly announced that they intended to seek bidders from the private sector to manage the amalgamated 5 Oxfordshire PCTs.
The apparent timetable of events was that advertisements would be placed in the EU Journal in November and the successful bidder would take over in April 2006. The rationale behind this bizarre behaviour was that the ‘super PCT’ would be ‘ a very large organisation needing unusual management expertise’ In fact, it will be the size of the former Oxfordshire Health Authority and in any event, the debate about size is somewhat negated by the persisting rumours that Oxfordshire is to be a pilot for other, smaller PCT’s.
The Oxfordshire Action Group are justifiably indignant at the prospect of a, possibly foreign, for profit organisation, creaming off 10% of the £575m Oxfordshire Health budget.
Of course, salt will no doubt be added to the wound in Oxford and across the country by the sure and certain knowledge that the present highly paid elite, will be centrally involved in the re-organisations where it can be safely predicted that there will be the introduction of an even higher paid elite of completely unnecessary, new management.
For those forced to ‘get on their bikes’ and find a proper job there will, of course, be the solace of knowing that in just a few short years of hard labour at the NHS ‘coalface’ they will have accrued a considerable sum towards their enforced early retirement.
Of course if it suited the Government then Patricia Hewitt could start demanding some answers as to why taxpayers have been paying out massively increased sums of money to under-achieving senior managers.
But that would be to the
miss the point, where clearly, under-achieving PCTs and Strategic Health Authorities
will go a long way towards justifying the headlong rush towards health privatisation.