Labour warning on pay-offs

Private-sector managers recruited to National Health Service trusts have negotiated severance payments of up to pounds 250,000, NHS sources have told the Labour Party.

Labour has warned the managers' representatives on the National Association of Health Authorities and Trusts that an incoming Labour government would refuse to honour the pay-offs if they wanted to leave the NHS.

Any attempt to buy out what the party regards as "Tory ideologues" could cost up to pounds 300m - the equivalent of abolishing prescription charges, according to Nick Brown, Labour's health spokesman.

Mr Brown said the salaries of the new managers, some of whom earned pounds 100,000 a year, would also be reviewed. It is understood that perks such as cars will also come under scrutiny. "Conservative appointees are not going to hold the NHS to ransom. There will be no big pay-offs under Labour," Mr Brown said.

The shadow health minister estimates that up to 300 managers and advisers have negotiated preferential contracts with trusts. Management has attempted to keep details of the contracts secret, claiming "commercial confidence", but Labour supporters at trusts have told the party that many of the contracts involve three-year pay-offs.

The managers have been recruited to carry out government policies such as the internal market, and may seek to leave with the severance payments if Labour wins the next election. "These people will be expected to work under a Labour government and carry out their tasks like any other loyal public servant," Mr Brown said.

Some of the managers, worried about the impact of a Labour government, contacted the trusts association, which then made discreet approaches to party's spokesmen.

Labour proposes to reverse many of the present policies including the move towards local pay. Senior NHS officials hope that about 70 per cent of trusts will have opted out of nationally-negotiated pay by the time the general election is due in two years. The revelations come in the wake of official figures showing that health service management costs in the health service have risen by one-third, to more than pounds 1bn in two years.