On 15 May 2025, NHS England (NHSE) published the very senior managers (VSM) pay framework and supporting documents, which has been jointly produced by NHSE and the Department of Health and Social Care (DHSC) and which replaces all previous guidance provided by those organisations and predecessors such as the TDA.  

The framework states that it seeks to strengthen the link between reward and performance outcomes, increase transparency and offer flexibility to attract talented candidates to the most challenging roles. 

Key points to note 

• Compliance with the framework is expected but is not mandatory. Where an organisation does not comply, they must explain their reasons in their annual report and accounts on a “comply or explain” basis. 
• The new framework puts all VSMs (Chief Executives, Directors that report to Chief Executives, and all other designated VSMs) across all NHS organisations (ICBs, NHS trusts and NHS foundation trusts) onto the same salary ranges.  
• The framework applies to new VSM appointments, salary reviews and pay awards from 1 April 2025. It does not apply retrospectively and does not override existing contractual arrangements 
• Local remuneration committees remain responsible for setting VSM employment terms and salaries within the applicable pay ranges (which depend on weighted population for ICBs and turnover for provider trusts). VSM remuneration should be based on specific organisational circumstances and the complexity of the role.  
• NHSE approval will be required for any ICB VSM salaries above the applicable operational maximum, and for all NHS trust and NHS foundation trust salaries above £170,000. 
• New appointments of medically qualified Chief Executives should be on VSM terms. When appointing Medical Directors, it is expected that local remuneration committees will work with them to offer appropriate remuneration packages acknowledging medical remuneration packages vary significantly to those of VSMs  
• The ‘earn back’ provision (the withholding of 10% of basic salary pending an annual performance review) no longer applies. 
• A pay premium of up to 10% of base salary may be awarded if a VSM takes on additional responsibilities, works across multiple organisations, or performs exceptionally well.  
• An individual’s annual VSM pay award may be withheld if they are subject to internal performance management processes (conduct or capability) and/or fail to meet appraisal objectives.  
• Annual pay awards will be withheld for all VSMs of organisations in the recovery support programme. However, so that VSMs are not discouraged from moving to challenged organisations, this will not apply if they have been in role for less than two years and there will be a 15% salary incentive that will apply for a period of up to 24 months. 

What to take away and next steps 

The new VSM framework is part of a broader package of NHS reforms proposed by the government. In relation to NHS managers, this includes the introduction of professional standards and regulation, as well as investing in training and development by establishing a College of Executive and Clinical Leadership.

NHS organisations should review their local remuneration policies, reporting processes and VSM contracts and arrangements to ensure that they comply with the new framework.

How Capsticks can help 

Capsticks has significant experience in supporting NHS employers to navigate changes in employment law and policy, from conducting audits, reviewing current policies, contracts, practice and implementing change, to delivering training to employees at all levels. 

We can also deal with any complaints or specific issues that may arise in individual cases by conducting investigations, supporting decision-makers and HR, and defending any employment tribunal claims.  

If you would like access to advice, training or need further guidance on any of these issues (either generally, in relation to a specific case or in relation to the new framework), please contact Sian Bond, Andrew Rowland and Victoria Watson.