Call made to ‘end culture of pay outs’ in public sector - as it was revealed mental health boss will work six more months
PUBLISHED: 07:00 17 October 2017 | UPDATED: 12:02 17 October 2017
A call has been made to end massive pay outs to public sector bosses when they leave organisations – often to reappear in similar roles merely months later at another agency.
It comes as it was revealed the chief executive of the region’s failing mental health trust will be paid £87,000 over the course of the next six months, despite announcing his retirement last month.
Norfolk and Suffolk NHS Foundation Trust (NSFT) said this was the “best value for NHS money” instead of paying off Michael Scott with a lump sum.
The trust said he was instead working his notice period, but it was not clear what duties he would be taking on over the half-year period.
But a county councillor has questioned this. Labour councillor Emma Corlett, who has campaigned for improved mental health services and sits on the council’s health overview and scrutiny committee (HOSC), said: “You wouldn’t normally work a notice period when you retire.”
And at yesterday’s full council meeting Michael Chenery of Horsborough, chairman of the HOSC, suggested Mr Scott had not been aware of his impending retirement announcement ahead of an NSFT private board meeting on September 28.
However, an NSFT spokesman said Mr Scott “advised the chair and the deputy chair of NSFT in the spring of his intention to announce his retirement after the summer.”
But he added: “No date for retirement was set at that time.”
During his notice period, Mr Scott will be performing an “extensive handover” and NSFT will then look at where his expertise could be used across the wider healthcare system.
The revelation has prompted calls to end the practice of senior figures in the public sector receiving large pay outs, only to re-emerge soon after in similar or the same organisations.
Chloe Westley, campaign manager at the TaxPayers’ Alliance said: “This is a huge amount of taxpayers’ money being spent on pay offs for public sector bosses. Most of those working in the private sector couldn’t dream of packages like this and there’s no reason they should pay for public sector top brass to get them.
“Taxpayers don’t want to see their hard-earned cash funding executive pay-offs at a time when they are seeing their essential services come under threat.”
Norwich South MP, Labour’s Clive Lewis, said to someone on the outside it could look like “cronyism”.
He added: “It makes people have less faith in the system as a whole. It seems like a revolving door for senior managers who find more and more excuses while budgets are being cut.”
While Conservative MP for Norwich North, Chloe Smith, said: “Taxpayers are rightly concerned about big or concealed severance packages because it’s their money. I believe that overly generous executive packages can do damage to public services too because the hardworking frontline would feel it is unfair.”
In July, it was reported a former Suffolk mental health boss who received a £54,000 payment after resigning rejoined the NHS three months later in a top role at Colchester Hospital.
But the practice is prevalent across the public sector.
In June, this newspaper revealed how £70,000 was paid to Norfolk County Council’s former director of children’s services as compensation for loss of office - when the authority’s managing director had said he had not got a severance payment.
And the council’s annual statement of accounts showed £252,500 was handed to former executive director of resources Anne Gibson after her role was axed.
Jonathan Dunning, Unison Norfolk branch secretary, said while big pay outs from County Hall had reduced, there were still issues where managers were employed on an interim basis, on salaries much larger than they would get if they were employed directly by the council.
A similar situation was uncovered at Norfolk Community Health and Care Trust (NCH&C) in November last year, where interim chief executive Mark Easton cost the trust £200,000 for five-and-half months work.
Mr Easton was employed through an agency and the trust said the £200,000 was paid to the agency rather than to Mr Easton directly.
“This figure was consistent with market rates at the time,” a spokesperson for NCH&C said at the time.
However Mr Easton’s replacement, paid directly by the trust, earned £135,000 in 2015/16.
Other notable pay outs in this region over recent years have included:
■ The £30m plus payout bill accrued by both Norfolk and Suffolk County Council in five years up to 2014/15.
■ Outgoing police boss Chris Harding, pictured right, received a £147,000 pay out for retiring in 2013.
■ When former county hall chief executive David White left he received £163,700 compensation for loss of office, on top of a £205,3000 salary and £31,8000 employer pension contributions.
■ Former chief fire officer Roy Harold was handed £20,000 when he retired against a backdrop of back office cuts in November 2016.
■ Before taking on his role as chief executive at the Norfolk and Norwich University Hospital, NHS chiefs spent more than £500,000 on hiring Mark Davies to turn around three crisis-hit hospitals.
In 2016, the Department for Communities and Local Government (DCLG) pledged to cap pay outs at £95,000.
Three options at NSFT
An NSFT spokesman said there were three options when handling Michael Scott’s retirement.
He said: “The first is to pay the individual in lieu of notice. This means that a lump sum payment is made, calculated at six months’ full wage, and the person ceases to be an employee of the NHS.
“The second option is to ask the individual to work their notice period in situ. In this case, Michael would have continued to run NSFT for a further six months as CEO.
“The third option is that the individual remains on the NHS payroll as an employee during their six-month notice period, and fulfils other agreed work. Although the first option of a lump sum payment is common practice with very senior NHS staff, our trust felt that the most appropriate and best value for NHS money was to require that Michael work his notice period, but would no longer oversee the running of NSFT as CEO. Therefore, he will be fulfilling a six-month notice period with pay, as is the contractual obligation.”