1. Introduction
The NHS very senior manager pay framework (the framework) sets out the government’s policy for senior manager remuneration. The framework aims to align the pay approach of all NHS organisations – integrated care boards (ICBs), NHS foundation trusts and NHS trusts – and create consistency and transparency while offering enough flexibility to attract and retain talent. It links operational performance with pay incentives to attract the best leaders to work in challenged places.
This publication provides operational guidance to support the ongoing implementation of the framework locally. It should be read in conjunction with the framework and the supporting very senior managers pay framework implementation questions and answers.
2. Scope
Organisations
The framework applies to all provider trusts (that is both NHS foundation trusts and NHS trusts) and ICBs.
Roles
Chief executives, directors that report to the chief executive and directors who operate below the executive team and who are designated very senior managers (VSMs) are in scope of the framework (see the NHS very senior manager pay framework – NHS provider and ICB pay ranges).
3. Compliance
All ICBs and NHS provider trusts (that is, NHS trusts and NHS foundation trusts) are expected to comply with the framework. In the unlikely event that an organisation does not comply with the framework, they must explain their reasons in their annual report and accounts on a “comply or explain” basis.
Recording
Local remuneration committees should ensure that all pay decisions are appropriately recorded. A standard VSM pay case and justification template is provided, which should be completed for all individual or collective pay decisions. The forms should also be made available to organisations’ auditors (external and internal) or any other NHS regulatory body upon request.
Accountability and reporting
All NHS organisations are required to report all their senior manager remuneration arrangements in their annual reports and accounts.
These accounts must include comprehensive details of performance and accountability, covering governance declarations, remuneration reports, and the policies or decisions related to senior manager pay.
The manuals outlining reporting requirements will be revised prior to the release of the reporting and account requirements for the 2025/26 period. Since annual reports and accounts are submitted retrospectively, any additional requirements will be included in upcoming manuals to ensure they align with the latest standards and expectations. The guidance provided here will also be updated accordingly. Further details to follow.
4. Implementation
Effective date
The framework will be implemented from 1 April 2025.
New appointments
Candidates appointed on or after 1 April 2025 should be offered pay terms which align with the framework and this operational guidance.
Incumbent very senior managers
There is no requirement for incumbent VSMs to have their existing salary arrangements amended to comply with the framework. The provisions within the framework do not override existing contractual arrangements and the expectation is that incumbent VSMs will remain on their current contracts. However, local remuneration committees should undertake an assessment of existing salaries to determine whether they are above or below the pay ranges (see the NHS very senior manager pay framework – NHS provider and ICB pay ranges).
In circumstances where a VSM’s salary is below the pay range, consideration should be given to a system wide approach to ensure a consistent method is adopted.
Where a VSM’s salary is above the pay ranges, local remuneration committees should consider whether it is appropriate to withhold annual pay awards and pay reviews until such time that the pay moves into the range. This is in recognition that the pay bands will be uprated alongside government advised pay awards (see section 5).
Equalities considerations
The new framework makes a fundamental shift from pay awards linked to individual performance to one based on the collective performance of the organisation.
An equality impact assessment has been undertaken on the framework itself; however, all NHS organisations should ensure they conduct their own impact assessment upon local implementation.
When implementing the framework, local remuneration committees should have regard to equality considerations. This should include assessing all VSMs against available protected characteristic data and seeking to address any equalities issues within the parameters of the framework.
Following implementation, NHS organisations may also consider whether a pay assessment should be undertaken around job weight variations.
Local remuneration committees should carefully consider any difference in pay between VSMs undertaking work of equal value and seek to mitigate any equal pay risks.
Challenged provider
Within this framework, a challenged provider is defined as being currently in the recovery support programme (RSP) and allocated to the lowest NHS Performance Assessment Framework segment 5.
5. The pay ranges
Design
There are 2 sets of pay ranges, each with appropriate bands. ICB pay bands are determined by weighted population. Provider trust pay bands are determined by an organisation’s level of turnover.
The ranges will be uprated by the government’s pay award decision each financial year.
Minimum, operational maximum and exception zone
Local remuneration committees should set pay for VSMs between the minimum and operational maximum of the range. (See the NHS very senior manager pay framework – NHS provider and ICB pay ranges).
The pay range between the operational maximum and exception zone maximum should only be used in exceptional circumstances. For example, where a VSM is appointed from an organisation in a higher pay band to support a challenged provider or if a retention issue may arise from not reviewing the salary. In all circumstances, however, where the exception zone is proposed, a pay case should be completed (see section 10).
Pay within the ranges should normally be consolidated unless an individual is assuming temporary responsibility with a pay increase.
6. Pay on appointment
Newly appointed VSMs ordinarily should be placed on the bottom of the pay band.
Where a VSM moves into or within the NHS, due consideration should be made of their previous role and total remuneration, alongside the recommended salaries in the framework.
In circumstances where the appointed VSM was previously in a band 9 role and where their inclusive salary is greater than the minimum of the VSM pay band, a similar consideration should be made.
7. Pay reviews
When setting pay rates in accordance with the framework, organisations should ensure these salaries represent an appropriate and proportionate use of public finances.
Salary reviews should not be used as a general mechanism to increase VSM pay.
8. Pay awards
The government will confirm the level of annual pay award each year. This will be communicated to NHS organisations via a pay circular.
To support the government’s ambition of linking pay and performance, only VSMs working in organisations in NHS Performance Assessment Framework segments 1 to 4 may be eligible to receive an annual pay award in 2025/26 under this framework.
The following will apply:
- Those within NPAF segments 1 to 2 will be eligible for a pay uplift, unless they do not meet their individual appraisal objectives or there are individual conduct or capability issues.
- Those within NPAF segments 3 to 4 would be eligible for a pay uplift in 2025-26, unless they do not meet their individual appraisal objectives or there are individual conduct or capability issues. New provisions are expected to apply for organisations in NPAF segments for 3 to 4 from 2026-27. Further guidance will be provided in due course.
- Those within NPAF segment 5 will not be eligible for a pay uplift.
VSMs appointed to a challenged provider may be exempt from having pay awards withheld for up to the first 24 months starting from the individual’s start date.
Medical directors
For medical directors, employed on the consultant terms and conditions of service, the pay award will be in line with the government’s pay decision for the medical workforce.
Where a medical director remains on a medical contract and is in receipt of a management allowance for their VSM role, then the same provisions for applying pay awards set out above should apply to their management allowance. The offer letter should set out how the management allowance will interact with the provisions set out in this Framework.
9. Pay cases
NHS organisations will need to submit a pay case to NHS England for all appointments where a proposed salary exceeds £170,000, with the exception for ICB chief executives.
For ICB chief executive appointments, those exceeding the operational maximum of the relevant pay range should be submitted as a pay case for approval to NHS England.
All pay cases must be submitted to england.vsmcases@nhs.net for review.
Appointments that exceed the agreed pay thresholds and are not in line with the provisions in the framework, NHS England will submit these pay cases to the Department for Health and Social Care (DHSC) for approval.
10. Rewarding success
The framework includes the flexibility to offer a performance payment to reward exceptional contribution irrespective of an organisation’s NHS Performance Assessment Framework segmentation. It is anticipated that exceptional contribution should be taken to mean delivery of improvements significantly above trajectory. For example, leading a significant reduction in the provider’s deficit or leading the organisation out of its challenged status may result in a bonus. These examples are not exhaustive. In all cases where the base salary exceeds £170,000, please complete the VSM pay case and justification template.
The bonus is a non-consolidated, non- pensionable payment of up to 10% of the VSM’s base salary.
In all cases, before a bonus award is communicated or made to a VSM, the local remuneration committee should seek agreement from NHS England.
11. Talent appointed to challenged organisations
We are keen to ensure that the most challenged NHS organisations can attract talent to support improvement efforts. This section provides specific guidance for VSMs who are appointed to an organisation that is currently in the recovery support programme (RSP) and allocated to the lowest NHS Performance Assessment Framework segment 5.
Recruitment premium
The framework allows local remuneration committees to request the use of a temporary, non-consolidated, non-pensionable 15% premium, for up to 24 months. This can be extended by up to a further 24 months where there is sufficient justification, and will require the approval of NHS England. The premium should only be used where an NHS England agreement has been provided. Please complete the VSM pay case and justification template if the base salary exceeds £170,000.
Local remuneration committees should contact NHS England before an advert is placed so that the enhanced pay can be transparently advertised. The process should be simple, and a clear audit trail should be retained.
Where NHS England deploys a senior manager to support a challenged organisations it will approve the use of the recruitment premium.
Attraction and retention
Local remuneration committees may also consider the overall local employment offer, which includes pensions and non-pay benefits, such as relocation expenses and access to salary sacrifice schemes, to attract and retain talented VSMs into challenged organisations, considering their responsibilities under equality legislation.
Publication reference: PRN01830ii