1. Introduction
The very senior managers pay framework (the framework) will apply to all integrated care boards (ICBs) and NHS provider trusts from the 1 April 2025.
The framework seeks to create consistency, increase transparency and offer sufficient flexibility to attract talented candidates to the most challenging roles and challenged providers. Our aim is to reward successful, high-performing senior leadership and, in turn, drive performance improvements so that all patients have local access to the best standards of care. This framework was jointly produced by NHS England and Department of Health and Social Care (DHSC). The policy is owned by DHSC and has been instructed by the Secretary of State for Health and Social Care.
The framework aligns with several key recommendations: Messenger and Pollard’s (2022) call for enhanced leadership capabilities; Kark and Russell’s (2019) focus on accountability, governance and ensuring transparency and consistency in remuneration practices; and Darzi’s vision to attract high-calibre leadership talent and align incentives with organisational performance to drive improvements.
2. Aims and expectations
2.1 Aims
The framework aims to ensure:
- greater alignment of approach to remuneration across all ICBs and NHS provider trusts, including acute, mental health, community and ambulance NHS trusts and NHS foundation trusts pay ranges
- the total reward offered for VSMs remains attractive and proportionate
- the NHS can attract the most talented and experienced VSMs to the most challenged organisations
- a stronger link between pay and operational performance to incentivise VSMs to focus on the improvement of services
- a link between the national frameworks (for example, the Board member appraisal framework) for individual performance for VSMs
- it supports the government’s priorities for the NHS
2.2 Expectations
NHS organisations
Compliance
All ICBs and NHS provider trusts (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.
Approvals
For all roles, except ICB chief executive roles, a pay case will need to be submitted for approval to NHS England when the salary exceeds £170,000. The central pay and approvals team in NHS England will subsequently submit pay cases to the DHSC when these do not comply with the provisions in this framework.
For ICB chief executive roles, a pay case will need to be submitted to NHS England when the salary exceeds the operational maximum. As above, the central pay and approvals team in NHS England will subsequently submit pay cases to DHSC when these do not comply with the provisions in this framework.
Framework oversight
NHS England will provide oversight and conduct periodic framework reviews to ensure the aims are delivered. In addition, NHS England will ensure the key factors determining base pay ranges remain valid and value for money. DHSC will make future revisions to the framework as required.
Remuneration committees
Local remuneration committees will be expected to include their VSM pay decision making in their annual report and accounts. In addition, they will be expected to submit an annual pay report to NHS England (see the NHS very senior manager pay framework – operational guidance).
3. Very senior managers pay framework
3.1 Pay setting
Organisations are responsible for ensuring that when setting spot salaries for VSMs, the appropriate local equal pay assurance mechanisms are in place. The exact make-up of VSM roles is completely individual, and therefore, it is important they are valued using the local arrangements and the process is fully justified (see the NHS very senior manager pay framework – operational guidance).
When setting pay rates in accordance with the framework, organisations will need to ensure these salaries represent an appropriate and proportionate use of public finances.
There should be no expectation that appointees who make a like-for-like move should receive a pay increase. Equally, a small budget or team size increase should not automatically trigger a pay increase. It will be for the organisation’s remuneration committee to decide whether a pay increase is warranted based on the organisation’s circumstances and the role’s complexity.
Applying pay outside of the framework provisions
Local remuneration committees should maintain VSM base pay levels and any allowances within the parameters of the published minimum and operational maximum ranges. It is expected that exceptions will be just that: exceptions.
Where an exception is considered and proposed, and the salary exceeds the threshold of £170,000 (see section 5.1), respective organisations should refer to their NHS England regional teams, through the regional directors of workforce, training and education, for joint scrutiny with the NHS England central pay and approvals team. In some cases, NHS England will need to refer these to the DHSC for final approval (see pay case and justification template).
Where an exception is considered and proposed, organisations must explain their reasons for non-compliance in their annual report and accounts on a “comply or explain” basis.
To maintain a consistent approach, the NHS England pay and approvals team will provide direct advice and guidance to respective organisations and regional teams and act as the single point of reference with DHSC (see the NHS very senior manager pay framework – operational guidance). Where a pay case is submitted to DHSC, it will work to advise on such cases in a timely manner.
3.2 Pay determination
3.2.1 Pay bands
The framework sets out a series of pay bands. This is determined by either weighted population (ICBs) or turnover (provider trusts). There are 4 pay bands for ICBs (A to D) and 5 pay bands for provider trusts (A to E) (see the NHS very senior manager pay framework – NHS provider and ICB pay ranges).
Each pay band has a minimum and operational maximum range between which spot salaries should normally fall. In exceptional circumstances, the remuneration committee may recommend a salary above the operational maximum. This recommendation will need to fall within the exception zone and will require approval from NHS England and who may refer it to DHSC for final approval (see pay case and justification template)
In group models, when considering the remuneration of chief executives, managing directors and VSMs, the remuneration committee should also be mindful of the value of similar roles in smaller stand-alone trusts. For example, the site chief executive or managing director in a group setting would be expected to receive lower remuneration than a chief executive in a smaller trust where the latter holds full autonomy and accountability for the business of the entire trust.
3.2.2 Salary setting
VSMs covered by the framework must have their salary and the terms of their appointment agreed via the local remuneration committee.
All decisions made by local remuneration committees should be fully justified using the factors outlined in the pay case and justification template. The justification must show that differences in salary outcomes among peers have been scrutinised to ensure they are objectively justified and free from bias related to protected characteristics. These records must be available for inspection for both internal and external audit purposes, such as those carried out by the Care Quality Commission.
Where the recommended salary exceeds the relevant pay threshold (see section 5.1), the pay recommendation must be made to NHS England for approval who may refer it to DHSC for final approval.
The market value of the post and geographical concerns
In considering market value, the remuneration committee might consider summarised national data and regional and local area data, particularly where there is evidence of difficulty recruiting to that geographical area. However, it is not appropriate to find 1 similar local post that pays higher than others and use this to set a salary in competition.
Difficult to fill posts
Where there is a national difficulty with filling posts of a particular nature, this should be determined using robust and justifiable evidence, such as evidence published by the Senior Salary Review Body (SSRB). This should be augmented with local evidence of failure to recruit. When national shortages are identified and not rectified by an increase in remuneration, NHS England regional teams, ICBs and provider organisations should work together to remedy the shortage. This may include making strategic improvements to the talent pipeline and succession planning.
Current salary and experience of the appointee
The current salary and experience of the appointee will play a part in determining the spot salary. Appointees who are new to VSM roles, new to director roles and new to chief executive roles will normally require some development and support. Remuneration committees are advised that for new-in-post VSMs, pay should normally be agreed at or near the minimum value of the range, taking into account the complexity and relative nature of the role from a local job evaluation perspective.
Medically qualified chief executives
When appointing medically qualified chief executives, who were previously employed on medical terms and conditions, only VSM terms and conditions should be offered upon appointment. Where pay is applied in accordance with this framework, but the new pay rate is not sufficient to maintain the medically qualified chief executive’s previous pay, there may be the potential to pay further up the relevant pay range, including above the operational maximum if necessary. Organisations should seek advice from NHS England’s pay and approvals team at the earliest opportunity to discuss options.
Medical directors
When appointing medical directors, it is expected that local remuneration committees will work with them to offer appropriate remuneration packages. This will include the option to remain on their current medical and dental salaries and terms and conditions, together with any appropriate management allowance, or to receive VSM pay and terms and conditions. As part of this process, local remuneration committees should consider whether the role suits VSM or medical terms and conditions. Local remuneration committees should note that medical terms and conditions are established through national collective bargaining.
Additional responsibility allowances contained in this framework are not normally expected to be available in the case of medical directors employed on medical and dental terms and conditions. Remuneration committees could be guided to agree such allowances should a medical director take on additional responsibilities, such as being promoted to deputy chief executive.
Where these individuals stay on medical and dental terms and conditions, any withholding of pay related to organisational performance should be applied only to the management allowance element of their pay. The offer letter should state how the management allowance will interact with the provisions set out in this framework.
If an individual remains on medical terms and conditions and is subject to a formal performance management process due to concerns – such as VSMs failing in their roles, objectives or targets – the pay progression process set out in the medical and dental terms and conditions would apply.
Consideration may need to be given to the remuneration package offered to not deter suitably qualified medical candidates. In addition, local remuneration committees will need to consider pay distribution across the board and internal comparisons to ensure that the framework is being applied equitably.
3.2.3 Payment for additional responsibilities
Responsibilities across 2 or more roles within an organisation
In principle, VSMs are expected to assimilate reasonable increases in their work accountabilities, such as periodically deputising for the chief executive, without attracting any increase in pay.
Where a VSM assumes temporary responsibility for a role usually undertaken by a separate VSM (lasting between 3 to 18 months) or a significant increase in portfolio responsibilities (such as taking on a deputy chief executive role or significant work at a national level, as agreed with NHS England), this may attract a non-consolidated, non-pensionable, pay premium of up to 10% of base pay.
Payment of a premium for temporary additional responsibilities must be considered time-limited and should not be consolidated.
Where this responsibility is taken on permanently, this payment would become pensionable and should be subject to the organisation’s usual arrangements for recruitment in line with their local policies.
Responsibilities across 2 or more organisations
A VSM who undertakes responsibility across 2 or more organisations – at the request of their local board, ICB or NHS England – would have their pay re-set based on a pay band assessment when the combined turnover (for provider organisations) or weighted population (for ICBs) of both organisations has been assessed. This could be as a joint management arrangement or a single executive joint appointment, for example. The salary will be determined by the individual’s primary local remuneration committee and will be applied for as long as the individual fulfils the additional responsibility or joint appointment. This is applied to pensionable base pay because it is part of the substantive job.
This may attract a pensionable pay premium of up to 10% of base pay if, following review, the individual remains within the same pay band. Where the pay premium takes pay above the operational maximum, it would be subject to a pay case requiring NHS England final approval (see section 5.1)
Remuneration package and the employee value proposition
Local remuneration committees will need to consider the wider value of the remuneration package when determining pay, such as the NHS pension scheme, non-consolidated discretionary pay and salary sacrifice schemes, and the potential tax implications (see NHS very senior manager pay framework – operational guidance).
3.3 Pay and performance
The framework seeks to ensure we attract the best talent to the areas of the NHS with the greatest need by rewarding success not underperformance.
The Secretary of State for Health and Social Care has set the direction of travel for the government’s strategy on VSM pay. It is imperative that pay for senior leaders needs to fairly reflect the complexities of their roles while also being used as an incentive to improve performance and patient care.
To this end, the provisions in this framework aim to encourage improvements in organisational performance.
Annual pay awards
NHS England will confirm any annual pay award decisions made by the Secretary of State for Health and Social Care via the pay circular letter.
Eligibility for pay awards for VSMs will be linked to their organisation’s performance as determined by the NHS Performance Assessment Framework segment to which they are assigned (see NHS very senior manager pay framework – operational guidance)
Individuals who are failing to meet their own objectives or targets, and who are subject to a formal performance management process, or who are subject to any investigation into their conduct, will not be eligible for any pay award until those matters are fully resolved.
Segments 1 to 2: VSMs will be eligible for the annual pay award, unless they do not meet their individual appraisal objectives or there are individual conduct or capability issues.
Segments 3 and 4: VSMs would be eligible for the annual pay award 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 2026-27. Further guidance will be provided in due course.
Segment 5: VSMs will not be eligible for the annual pay award, unless they are exemption. A VSM may be exempt for up to the first 24 months of appointment to an organisation that is in the recovery support programme (RSP) and designated to NHS Performance Assessment Framework segment 5.
Rewarding success
At the discretion of the local remuneration committee, VSMs may be offered the opportunity to earn a non-consolidated, non-pensionable performance payment of up to 10% of basic pay in recognition of exceptional contribution.
It is anticipated that exceptional contribution should mean delivery of improvements significantly above trajectory. For example, leading a significant reduction in the provider’s deficit or moving the organisation out of its challenged status within a defined timeframe.
4. Challenged organisations
4.1 Pay setting
For the framework, a challenged organisation is defined as currently in the recovery support programme and allocated to the lowest NHS Performance Assessment Framework segment 5.
VSM salary setting
When setting spot salaries for VSMs appointed to challenged organisations, employers should refer to section 4.2.2. In addition, when determining the spot salary for a VSM appointed to a challenged organisation, consideration should be given to the experience and expertise they bring at this critical time (see the NHS very senior manager pay framework – operational guidance and the supporting implementation questions and answers for more information).
Challenged organisation recruitment premium
A VSM appointed to a challenged organisation will be eligible for the “challenged organisation recruitment premium”. The premium is a recruitment incentive designed to attract VSMs to the most challenged organisations and is not performance dependent. This premium is not available for those VSMs already in post when the organisation moves into the recovery support programme and allocated NHS Performance Assessment Framework segment 5.
The challenged organisation recruitment premium is a non-consolidated, non-pensionable payment of 15% of base pay per annum and would be paid each month for up to 24 months.
The local remuneration committee and NHS England will agree the premium duration. This can be extended by up to a further 24 months where there is sufficient justification; this will require the approval of NHS England.
Once an organisation has moved out of its challenged organisation status, any new VSM appointments at the organisation would not be eligible for the recruitment premium.
5. Approval process for pay
5.1 NHS England and DHSC scrutiny thresholds
NHS England and DHSC have agreed pay thresholds above which proposed VSM pay must be reviewed and scrutinised.
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.
ICB chief executive appointments exceeding the operational maximum of the relevant pay range must be submitted for approval to NHS England.
All pay case must first be submitted to england.vsmcases@nhs.net for review.
Those cases exceeding the agreed pay thresholds that are not in line with the provisions in the framework will be submitted to DHSC for approval.
See also the NHS very senior manager pay framework – operational guidance along with the supporting implementation questions and answers.
Publication reference: PRN01830_i