How many managers are there in the NHS?

The NHS employs 1.4 million staff and has a budget of around £100 billion, so it needs to be managed professionally. There has been a lot of publicity about the rate at which the number of managers has grown (Daily Telegraph 2010, Guardian 2010) and the amount that very senior managers are paid (BBC 2010, Independent 2010). Here we set out some key facts about managers in the NHS.

Has the number of managers increased?

In 2009, the NHS employed the full-time equivalent of 1,177,056 staff (1,431,996 headcount), of whom 42,509 were managers or senior managers. While the total number of NHS staff increased by around 35 per cent between 1999 and 2009, the number of managers increased by 82 per cent over the same period, from 23,378 to 42,509 (Information Centre 2009) (see table 1). As a proportion of NHS staff, the number of managers rose from 2.7 per cent in 1999 to 3.6 per cent in 2009 (Information Centre 2009). Table 1 shows changes in the numbers and proportions of certain groups of NHS staff between 1999 and 2009.

Table 1 Changes in numbers of certain groups of NHS staff 1999–2009

The NHS Confederation, which represents NHS organisations and independent healthcare providers, argues that the proportion of NHS managers is relatively low given the size of the organisations that they run. They point out that it is lower than the proportion of managers in the whole of the workforce in the UK (NHS Confederation 2007), which in 2009 was 16 per cent (Office of National Statistics).

Why has the number of managers increased?

The NHS Careers website lists 78 categories of manager, including clinical management, human resources management, IT and financial management. There is no data available on which of these broad categories of management has seen the most growth. Recent reforms to the NHS, including delivering waiting times targets, changes to the hospital payment system (Payment by Results), the electronic booking system (Choose and Book) and other IT projects, are likely to have increased the need for managers in hospital trusts.

For primary care trusts (PCTs), the recent Health Select Committee Report into Commissioning identified a continuing rise in administration costs dating from the purchaser–provider split in 1991 and was critical of the government's inability to supply 'clear and consistent data about transaction costs' relating to billing and commissioning.

The regulatory framework for health care in England has also become more complicated. A report in 2009 by the Provider Advisory Group, made up of NHS and independent sector providers, concluded that there was unnecessary duplication in the information NHS providers in England are required to submit to the 35 key regulators, auditors, inspectorates and accreditation agencies. Supplying this information has led to an increase in the number of non-clinical staff employed by the NHS.

In 2007 the Department of Health set a target to reduce the number of 'people years' spent gathering data by 30 per cent. In October 2007 a baseline of 498 years was set with the goal of a reduction to 348.6 by May 2010. This target is not on schedule to be met: in December 2009, this figure stood at 380 – a 23.6 per cent reduction.

There have been few systematic attempts to measure the quality of management in the NHS. A recent study published by the LSE found a relationship between the quality of management – as measured by surveys – and the quality of clinical services in hospitals, as measured by the Healthcare Commission. The Department of Health recently launched the National Leadership Council to improve the quality of senior management in the NHS, which has traditionally spent a very small proportion of its training budget on managers.

How much are managers paid?

Pay for most NHS managers is determined by Agenda for Change, which is the nationally agreed pay framework for all NHS staff (other than doctors, dentists and very senior managers (VSMs)). NHS managers below the level of VSMs can be paid anything between £25,472 and £97,548. Examples of pay in 2010 include a radiography team manager (£30,460 – £40,157), a head of procurement and supply (£38,851 – £55,935) and a chief finance manager (£45,254 –£80,810).

There are currently around 1,120 VSMs in England – chief executives, executive directors and others with board level responsibility. Their salaries, along with those of other senior public servants, are agreed by ministers on the advice of the Senior Salaries Review Body. In 2009 the average pay of a chief executive of a non-foundation NHS trust was £147,500, and the average pay of a chief executive of a Foundation trust was £157,500 (Senior Salaries Review Body 2010).

Following recommendations by the Senior Salaries Review Body, the government had previously announced that the pay of very senior NHS managers should increase by 2.2 per cent in 2008/9. (Hansard 17 June 2008). A report published in April this year by Incomes Data Services (PDF) showed that, in fact, chief executives had received an average pay increase of 6.9 per cent in 2008/9.

Pay increases for VSMs have been limited to 1.5 per cent for the financial year 2009/10 (Hansard 31 March 2009) and there will be no pay increases at all for the financial year 2010/11 (Hansard 10 March 2010). Other managers will receive a pay increase of 2.25 per cent for 2010/11 as part of a three-year pay deal set out by Agenda for Change, which the government has chosen not to review (Department of Health 2009).

Has the pay of managers risen more than the pay of other NHS staff?

Increases in the number of NHS staff and higher pay costs have absorbed more than half the increases in financial resources made available to the NHS since 2002 (Thorlby and Maybin eds 2010). Managers' pay has risen slightly less since 1997/8 than that of other NHS staff groups and much less quickly than that of consultants (see figure 1). 

Figure 1 Changes in real average earnings per full time employee for selected NHS staff groups

What are the political parties' policies on NHS management costs?

All three major parties are committed to reducing management costs in the NHS. The Labour government promised to reduce management costs in PCTs and strategic health authorities by 30 per cent over the next four years. The Conservative party is committed to reducing costs by removing 'expensive layers of bureaucracy', which it says will reduce administration costs by a third and the Liberal Democrats say they would cut the Department of Health by half, abolish strategic health authorities and cap the remuneration of senior managers so that none is paid more than the Prime Minister.