Terms and conditions of NHS trust chairs and non-executive directors

We have a specific role in appointing and supporting NHS trust chairs and non-executives which does not apply to foundation trusts. These are public appointments made using powers delegated by the Secretary of State for Health.


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NHS trust chairs and non-executive directors should contact our Non-executive Appointments team with any queries, or to notify them of any changes to their situation or connections during the period of appointment.

Appointment information – Sets out important information about the terms and conditions under which our public appointments are made.

Remuneration and expenses

The level of remuneration paid to the chairs and non-executive directors of NHS trusts is set by the Secretary of State for Health.

Current rates of remuneration payable to chairs

All NHS provider trusts are allocated to a group dependent on their turnover. The chair and NED remuneration structure sets out a range of remuneration for chairs based on this turnover:

 Trust Size  Annual Turnover

(£p.a.)

 

Designation

 Chair Remuneration (£p.a.)
Lower Quartile Median Upper Quartile
Small <200m Group 1 40,000 43,000 45,100
Medium 201m – 400m Group 2 44,100 47,100 50,000
Large 401m – 500m Group 3 45,000 49,500 51,400
Extra Large 501m – 750m Group 4 50,500 55,000 58,500
Supra Large >750m Group 5 55,500 60,000 63,300

Although the remuneration structure was published in 2019 the staging process to increase the remuneration for NHS Trust chairs only began from 1st April 2021.  From this date, all chairs should all be paid at the lower quartile associated with the relevant range. From 1st April 2022 all chairs should all be paid at the median value associated with the relevant range.  Variation outside the remuneration structure and the agreed staging process is limited to exceptional cases in the most complex and challenged situations.

Current rates of remuneration payable to non-executive directors

Non-executive director remuneration is set at £13,000.

Trusts also have local discretion to pay an additional of £2,000 to selected individuals in recognition of designated extra responsibilities. This is restricted to up to two non-executive directors (for groups 1 to 3) and three non-executive directors (for groups 4 and 5).   Trusts have local discretion to apply this, as required, within the maximum financial value associated with the trust’s designated group (that is £4,000 for trusts in groups 1 to 3 and £6,000 for those in groups 4 and 5).

Notwithstanding the discretion afforded to them, it is anticipated that NHS foundation trusts will also demonstrate consistency with the provisions of the aligned chair and NED remuneration structure.

Her Majesty’s Revenue and Customs (HMRC) has determined that chairs and non-executives are liable to pay income tax on their remuneration under Schedule E and Class 1 National Insurance Contributions (NIC). As a result, any tax liability and NIC will be deducted at source under the PAYE scheme. It isn’t possible for chairs and non-executives to be paid their remuneration gross, unless the HMRC issues a nil tax code. It is for individuals to make any such personal arrangements with HMRC.

Expenses

NHS chairs and non-executive directors are entitled to claim expenses for travel, subsistence and other legitimate expenditure needed to perform their role effectively. They are also entitled to receive expenses for all legitimate travel costs from home to any place visited on Trust business and back to home again at the prevailing mileage rates.  How this is best achieved should be determined locally.   Rates are set by the Secretary of State for Health and mirror the rates set under Agenda for Change (AfC).  These are detailed in Annex 17 of the NHS terms and conditions of service handbook.

All legitimate expenditure necessarily incurred on Trust business should be paid in line with local practice, via the local payroll system with tax deducted at source.  We cannot advise on tax issues so any queries on these arrangements should be taken up with the host trust or HMRC and / or personal tax advisers.  On no account must subsistence claims include the provision of alcohol.

Indemnity

NHS trusts can indemnify chairs and non-executive directors who have ‘acted honestly and in good faith’ against personal liability incurred whilst carrying out their duties. This indemnity may also be extended to individual members of committees with delegated powers to make decisions or take actions on behalf of the board.

Resignations

Non-executive directors can resign at any time by giving notice in writing to their chair or NHS Improvement. Where possible, chairs should first liaise with the relevant executive regional managing director within NHS Improvement and non-executive directors to agree a leaving date.  It is also helpful for us to understand the reason for the resignation in case there are any issues that should be addressed.

Suspension and removal from office

We’ve produced a policy setting out the principles and processes that we’ll use to establish whether, and how, a chair or non-executive director of an NHS trust should be suspended or removed from office. The policy incorporates three separate but interconnected pathways: seeking a resignation, suspending the office holder and terminating the appointment.