The Times’ Lucy Fisher, & Chris Smyth 17th December 2013 report:
NHS executives rehired as consultants after payoff
“Two senior NHS managers who received big payoffs have been given lucrative consultancy contracts costing taxpayers hundreds of thousands of pounds, sparking fresh criticism of a “revolving door culture” in the health service.
Sir David Nicholson, chief executive of NHS England, will be questioned by MPs today about why executives were made redundant only to be re-employed as consultants months later. A consultancy firm run by two former executives at NHS London, which employs one other NHS manager and lists five former NHS staff as associates, has been given four contracts with local health trusts, The Times has discovered.
Dame Ruth Carnall, the former chief executive of the NHS, herself criticised a system in which she runs the consultancy while drawing an NHS pension from a £2.2 million pot. Ministers paid £171 million to make managers redundant when they abolished 161 health bodies, yet Dame Ruth said the new NHS structure was so frustratingly complex that bosses had to rehire staff to recreate some of the management systems that had been swept away.
Last month The Times revealed that a married couple who were both NHS managers received redundancy payoffs totalling £1 million before being rehired three months later. They were among dozens of executives who received payoffs of more than £100,000, many of whom were later re-employed.
Dame Ruth runs CarnallFarrar with Hannah Farrar, a former colleague from NHS London. Ms Farrar, 33, whose salary was more than £140,000 a year, was paid more than £115,000 in redundancy when the organisation was abolished in March.
Teresa Moss, who received a £130,000 payoff from NHS London, also works with the company, as do two other former health service managers who left the NHS this year. Only Dame Ruth and Ms Farrar have worked on the consultancy’s NHS contracts so far.
In partnership with McKinsey, the company has a £1.5 million contract to link up health and social care in East Cheshire. CarnallFarrar also has contracts with the NHS in Manchester, West London and Brighton. The company would not reveal the values of those deals.
Sir David will be questioned about the deals by MPs on the Health Select Committee today. At a previous appearance he defended Dame Ruth as “extraordinarily talented”.
Charlotte Leslie, a Tory member of the committee, said: “In any other area it would be absolutely extraordinary what goes on, but in the NHS it seems anything goes. They write their own rules to suit what they want.”
Rosie Cooper, a Labour member of the committee, said of managers who received redundancy payoffs before being brought back: “Some former executives are raking it in from the NHS hand over fist after having left. It looks like there is a ‘charmed circle’ – once you’re in it, you’re set up for good.”
Although Dame Ruth is drawing her pension early and indicated that she had received a lump sum, she said she had waived a redundancy payoff and criticised reforms which she said had set back crucial work on improving the health system.
“We loved our jobs and wanted to carry on making what we believed were profound improvements to health services in London,” she said. “This work was simply cut off whilst we were obliged to spend our time dismantling the infrastructure of our organisations … A lot of talented people were lost to the NHS and so as new organisations struggle to get to grips with a level of complexity that they cannot find their way through, they seek help.”
Ms Farrar said: “I absolutely loved my job and I worked exceedingly hard for the public service and got treated extremely poorly and got made redundant. I would have liked to have done another job and there wasn’t one … I didn’t earn a penny until the end of September.
“I was completely stressed and worried that I was going to run out of money and not be able to pay my bills. I don’t think there’s anything improper in the way that I’ve behaved.”
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