Bottomley plans cut to NHS chiefs' pay and perks

BIG pay and perks packages for health service managers are to be restricted by new limits on administrative spending in NHS trusts imposed by the Government. Virginia Bottomley, Secretary of State for Health, is to impose the restrictions in the new year, following the revelation that the bill for company cars for managers has risen to pounds 70m.

Her intervention marks a change of tack by the Government and a recognition that, in some areas, the new internal market needs to be reined in. Ministers want to tighten guidelines on trusts to place limits on the proportion of cash which can be spent on administration.

Ministerial embarrassment over the health service administration bill grew last week with the disclosure that the extra salary cost since 1989 among managers, administrators and clerical staff stands at pounds 1.15bn. Spending on managers' pay in London increased by 109 per cent in four years while the bill for nurses and midwives declined by 23 per cent. South West Thames Regional Health Authority management salary costs rose by 187 per cent while those of nurses and midwives dropped by 27.2 per cent.

At the Government's flagship NHS trust - formed through the merger of Guy's and St Thomas's in London - moves have already been taken to restrict the number of cars for managers. The feeling that Guy's had been over-generous with top management vehicles pre-dates the revelation that spending on NHS cars shot up by a third last year.

From 38 cars provided for managers - 28 of them at Guy's, where Peter Griffiths, the former chief executive, set an NHS salary and bonus record of pounds 130,000 - numbers are heading down to nearer 16, according to a trust spokeswoman. 'We have been adopting much stricter criteria,' the new combined trust said.

Ministers intend to use the report of the Corporate Governance Task Force, chaired by Duncan Nichol, to spell out new limits on administrative spending. The establishment of the task force was announced in June when Mrs Bottomley said it would examine the effectiveness of trust and health authority chairmen in holding trusts to account. Mr Nichol's report is expected in January.

Although ministers have defended the trusts' rights to produce large pay packages for administrators, Mrs Bottomley believes some of the latest developments are unacceptable.

She is said to be anxious to ensure that new guidelines balance the freedoms of trusts with their responsibilities.

The furore over spending on administration was sparked by the Secretary of State for Wales, John Redwood, who made a controversial attack last month on increased spending on 'grey suits' in the health service.