NHS faces `fat-cat' pay-off storm

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The Independent Online

Labour Editor

Several senior National Health Service officials stand to receive up to pounds 200,000 each as part of "fat-cat" severance payments, now effectively banned in the City.

Five out of six regional chief executives are to enjoy the golden handshakes as part of their senior managers' contracts, which have yet to be abolished by the NHS executive.

The redundant officials, who earn around pounds 70,000 a year, are on individual agreements which means they will receive up to three years' salary when they leave the service.

The regional chief executives are losing their jobs as part of an extensive reorganisation of NHS Supplies, just five years after it was set up to prevent duplication of the purchasing function and to buy in bulk. The organisation, which oversees some pounds 2bn worth of expenditure, is being changed from a regionally-based structure to one managed on a national basis..

All six chief executives are expected to compete for one national job, although some insiders argue that the successful candidate may be worse off in the longer term than those forced out.

A spokesman for NHS Supplies said there were always costs when staffing was reduced.

The NHS Executive is said to be reviewing the practice of issuing three- year rolling contracts, which City institutions will no longer tolerate in publicly-listed companies.

In his report on top boardroom salaries, Sir Richard Greenbury counselled that such long-term agreements were unacceptable. Deals lasting up to one year should be the norm, he said.

The news emerges at a time when nurses have been offered a 2 per cent salary increase. Although there is provision for local top-upsNHS trusts have said only around 0.75 per cent will be available locally.Henry McLeish, Labour health spokesman, said : "The Health Service has been under permanent reform since 1989. Tory policies are costing the tax-payers a fortune."