BREAKING NEWS: Pay rise withheld from underperforming trust bosses
By Lee Peart | 05 November 2026
In a significant move to enforce accountability across the NHS, NHS England (NHSE) has announced that Very Senior Managers (VSMs) working in underperforming provider trusts will be excluded from the 2026/27 national pay award.
The directive, outlined in a new letter to providers, targets leadership teams at trusts that have struggled to maintain operational and clinical standards. Specifically, the pay freeze will apply to VSMs at trusts that remained in Segment 4 of the NHS Oversight Framework (NOF) for at least three out of the four quarters of the 2025/26 financial year. Additionally, these trusts must hold an “amber-red” or “red” capability rating to be included in the sanction.
The policy is designed to align executive remuneration more closely with organizational performance. While the ruling is strict, NHSE has built in limited exemptions. For instance, VSMs taking up new appointments in an affected organization may be granted an exemption for up to 24 months to ensure leadership stability. Similar protections are in place for executives in trusts that have recently acquired an ineligible organization.
Perhaps most notably, NHSE has indicated that this may not be a permanent loss of income for those affected. The governing body is currently exploring mechanisms that would allow VSMs to “earn back” some or all of the withheld award, contingent upon clear, demonstrable, and sustained improvements in their trust’s performance metrics.
The mandate currently applies only to provider trusts. VSMs working within Integrated Care Boards (ICBs) will be exempt from this specific performance-based withholding for the 2026/27 cycle. However, this appears to be a temporary reprieve, as NHSE prepares to implement a comprehensive performance and capability assessment framework for ICBs in the 2027/28 period.
The list of affected organizations spans the country, encompassing several major trusts in the North West, Midlands, and South East. Among the trusts facing these restrictions are Liverpool University Hospitals, Nottingham University Hospitals, and University Hospitals Sussex. The inclusion of major acute and mental health providers suggests a firm commitment from NHSE to address systemic performance issues at the highest levels of management.
As the NHS continues to grapple with post-pandemic recovery, elective backlogs, and financial pressures, the decision to link executive pay to strict oversight criteria marks a pivotal shift in the relationship between national regulators and local trust leadership. Whether this measure acts as a catalyst for rapid improvement or faces backlash from leadership groups remains to be seen. For now, the message from NHSE is clear: institutional underperformance will no longer be insulated from executive reward structures.
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