NHS Trusts: Salary Levels (Hansard, 14 July 1993)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)
My Lords, a total of 1,948 people have been appointed as chairmen and non-executive directors of National Health Service trusts in England, Scotland, Wales and Northern Ireland. We estimate the cost of their remuneration in 1992–93 was about £9 million. Although many staff transferred from previously directly managed units, it is not possible to identify how many new posts are attributable to the creation of NHS trusts nor any additional cost involved

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that Answer. Do the Government issue a yardstick as regards what shall be paid in remuneration to non-executive directors of the trusts? Are they free to award their own salaries, as was the case in Leeds where the directors awarded themselves 236 £55,000 a year? Is it not easy to realise the total which the Minister read out when people are giving themselves remunerations on such a scale?

§ Lord Henley
My Lords, those people are not giving themselves remuneration; that is decided by the chairmen and non-executive directors of the trusts. The pay levels of the non-executive directors are decided by the Secretary of State. As regards the issuing of guidance, it is entirely a matter for the trusts to decide what to pay individuals. It is for the trusts to decide within the bounds of their overall budgets the levels of pay necessary to attract exactly the right people. Obviously, guidance is available on pay levels in the rest of the National Health Service and they can take note of that as they see fit.

§ Lord Dean of Beswick
My Lords, is the Minister saying that the most highly paid people in the National Health Service trusts are deciding their own salary scale? Is there not something wrong in that?

§ Lord Henley
My Lords, I thought that I had made clear that the executive members are being paid according to the decisions of the non-executive directors. The pay levels of the non-executive directors and chairmen of the trusts are decided by my right honourable friend the Secretary of State.

§ Lord Molloy
My Lords, some London hospitals, irrespective of whether they are trusts, are facing serious problems of accommodation. Is the Minister prepared to examine the situation of Ealing Hospital if details are supplied? The hospital is doing its best but it has a serious problem.

§ Lord Henley
My Lords, that is slightly wide of the Question on the Order Paper. However, I am sure that my ministerial colleagues in the Department of Health will take note of the noble Lord's suggestion.

§ Lord McColl of Dulwich
My Lords, does my noble friend agree that before the recent introduction of the NHS reforms one could walk into an NHS hospital and find in the finance department 205 people none of whom had any financial qualifications or was paid properly? Does my noble friend further agree that if one wants people to run a hospital with a budget of £60 million one must have competent people with financial qualifications who are paid properly?

§ Lord Henley
My Lords, my noble friend has greater experience of these matters than I and probably any other Member of this House. In agreeing with him I must point out that we believe that effective management of the vast amount of taxpayers' money going into the National Health Service is very important in terms of delivering the best possible service to as many people as possible.

§ Lord Ewing of Kirkford
My Lords, if the Minister takes the view that those people running the finances of the opted-out hospitals should have financial qualifications, will he tell the House what financial qualifications the Chancellor of the Exchequer has?

§ Lord Henley
My Lords, that too is wide of the Question on the Order Paper. I shall answer the point 237 which the noble Lord made by stressing that these hospitals have not opted out of the National Health Service. They are National Health Service trusts and remain fully a part of the NHS.

§ Lord Taylor of Blackburn
My Lords, is the Minister aware that for many years several of us served voluntarily and without payment in various ways in the NHS; as chairmen, members of boards and so forth? Is he also aware that we were delighted to act in that way?

§ Lord Henley
My Lords, we are grateful for the noble Lord's work during those years.

§ Baroness Jay of Paddington
My Lords, is the Minister aware that there is general welcome for the announcement made earlier this week by the Secretary of State that she is establishing a working party to look into the reinforcement of public service values in the NHS? Perhaps that recognition reflects some of the anxieties which my noble friend raised in his Question. Is the Minister further aware that there is anxiety that among the members of the working group 19 out of 24 are salaried under the NHS and are therefore probably not as independent as they might be, and that the chairman, who comes from the private sector, has a background spent entirely in commercial business?

§ Lord Henley
My Lords, I can assure the noble Baroness that the members are independent. My right honourable friend the Secretary of State announced at the NAHAT conference on 18th June that the task force had been established within the National Health Service management executive to examine aspects of corporate governance within the National Health Service. It will report in due course and we shall then examine its proposals.

§ Lord Dean of Beswick
My Lords, is the Minister aware of a report in today's Independent which states that Mr. Alan Milburn, MP for Darlington, recently received a letter from the deputy director of the National Audit Commission stating that the spending of £40 million, the figure which the Minister gave, cannot be itemised? Is that not a funny way of running a concern which has as much money to throw about as the National Health Service?

§ Lord Henley
My Lords, the figure I gave was £9 million for the costs of the remuneration of the chairmen and non-executive directors of the trusts. I said that on a national basis it was not possible to identify the costs of other posts.