NHS managers 'should be paid City salaries'

Lord Warner, a former health minister, warned the NHS was struggling to attract top quality managers in London because salaries were not competitive.

In an interview with the Evening Standard, he said people had a " hairshirt" attitude towards awarding high salaries to public sector managers.

He said: "The NHS is struggling to get the calibre of top managers needed to give Londoners the quality of service they deserve. Good quality ones need to be paid more."

Lord Warner, who is chairman of the London Provider Development Agency, which monitors hospital performance, said salaries for hospital bosses had to compete with those in the City, and warned that services would not improve unless hospitals could recruit the most talented chief executives.

At present, salaries for top NHS bosses are decided according to a national pay scale. Lord Warner called for an end to national pay bargaining, which he said limited the flexibility to pay NHS managers top salaries - unless they belonged to foundation trusts which are managed independently and can pay what they like.

The average pay for a top NHS manager in London is now more than £100,000 a year - more than anywhere else in Britain.

Lord Warner said: "This is a totally heretical view and not government policy, but I believe you should be able to pay the rates you need for particular areas.

"Someone on £100,000 a year in London can't have the quality of life and lifestyle that £100,000 a year would bring in Cornwall or Newcastle.

"Much of what I say also applies to other staff but if we want top managers we have to be competitive."

Some NHS managers already earn well over £100,000 a year. Derek Smith, the former chief executive of Hammersmith Hospitals NHS trust, was earning more than £200,000 when he left in June last year.

Lord Warner's comments were criticised by health service unions.

Unison, Britain's largest public sector union, said: 'There are lots of workers in the health service who live in London but can't afford a mortgage because they are low paid.

"What Lord Warner should do is concentrate on putting pressure on the Government to drop the two per cent pay limit and come up with decent pay for cleaners, cooks and admin staff." There has also been controversy over the size of pay-offs for "fat cat" NHS bosses. Mark Rees, chief executive of Barking, Havering and Redbridge NHS trust, received a £170,000 golden handshake when his contract was terminated in November, despite leaving the organisation £30 million in debt.

Meanwhile, a report today warns that patients are dying because nurses are poorly paid.

The Centre for Economic Performance says hospitals in high-cost areas such as London and the South-East are struggling to recruit and retain staff, meaning they treat fewer patients and have higher fatality rates among people admitted with emergency heart attacks.