War on fat-cat NHS managers: Health chiefs ordered to end the culture of excess by capping six-figure salaries and huge pay-offs Health Secretary Jeremy Hunt told them last night it was time for a "collective reality check" on the highest salaries The NHS has spent £1.4billion on redundancies since 2010 and in the past year more than 950 staff were given six-figure redundancy packages Sir David Nicholson: His successor Simon Stevens, incoming head of the NHS has a agreed to a 10 per cent pay cut to set an example to other managers Health chiefs have been ordered to crack down on "unacceptable" fat-cat pay in the NHS. In a stinging letter, Health Secretary Jeremy Hunt told them last night it was time for a "collective reality check" on the highest salaries. He urged them to "show leadership by controlling pay among our most senior managers." And he warned that the sight of managers being handed lavish salaries while ordinary NHS workers are subjected to years of pay restraint risked "damaging public confidence." Mr Hunt said the pay of senior managers "should be subject to significantly greater restraint than that experienced by frontline NHS staff." In future, health bodies wanting to pay someone more than £100,000 will first have to get the Health Secretary's permission. Mr Hunt also plans to cap the number of managers on six-figure salaries. Health bosses have been told to conduct a pay audit to establish how many NHS managers are being paid more than £100,000. And, in a move that could prompt legal action from some managers, Mr Hunt plans to rewrite contracts to cap the level of pay-offs and end the "revolving door," where senior managers can be paid off by one part of the NHS, only to take up a new post elsewhere shortly afterwards. The pay controls will directly affect the eight quangos that oversee the running of the NHS. Between them they employ thousands of staff. A source said Mr Hunt had been moved to act after it was revealed that 48 NHS quango staff are paid more than the Prime Minister. The new edict will also be rolled out to hospitals, although it will not apply to clinical staff such as senior consultants. The health service regulator Monitor and the NHS Trust Development Authority will write to all foundation hospitals and health trusts asking them to "follow the lead... in applying restraint." In his letter to health chiefs, Mr Hunt said it was "vital that we stay in tune with the public mood" on top pay in the public sector. "I am concerned that the number of people on salaries higher than the Prime Minister has become too high across the NHS," he said This is unacceptable and unjustified at a time when significantly lower-paid frontline staff are faced with below inflation pay increases. I believe that it is time for a collective reality check - we must not develop a culture where very high pay is normalised. I do not want the NHS to make the same mistakes as the BBC, where a culture of excessive pay and pay-offs was tolerated for too long and damaged public confidence. A Government source pointed to the example set last week by Simon Stevens, incoming head of NHS England. Mr Stevens, who will replace Sir David Nicholson in April, has agreed to take a 10 per cent salary cut in his first year. It means he will be paid £189,900, compared with the £211,000 of his controversial predecessor. Time for a reality check: Health Secretary Jeremy Hunt has ordered a crack down on what he has branded 'unacceptable' pay-offs and salaries handed out to senior managers The reforms will also create tough rules on pay-offs to senior NHS managers. The NHS has spent £1.4billion on redundancies since 2010 and in the past year more than 950 staff were given six-figure redundancy packages, up from 620 the previous year. A National Audit Office report into the shake-up of NHS England found that 44 "very senior managers" who were laid off received up to £578,470 in redundancy payments. The average was £277,273. Lax rules have also allowed hundreds of managers to walk into new NHS jobs weeks after pocketing huge pay-offs. Since May 2010, at least 2,200 staff - mostly bureaucrats - have been re-employed by a trust after taking redundancy. NHS managers who are made redundant receive one month's pay for every year served, with the average payout since 2010 standing at £48,000. Under existing rules, NHS staff have to wait only four weeks after being paid off before they can take up a job with another part of the organisation. The new proposals mean managers will have to refund part of any pay-off if they take up another NHS job within 12 months. Pay-offs for senior staff will be limited, with the maximum salary used to calculate payments capped at £80,000. Employer top-ups to pensions, which are often used as a sweetener in redundancy deals, will also be limited. Controversially, Mr Hunt wants the new terms written into the contracts of existing staff. Decentralisation in the NHS means it is not possible for Mr Hunt to dictate salaries at individual hospitals. But the Government source said they would be expected to fall into line. "We want to change the culture across the NHS," the source said. The letter has gone to the arms-length bodies we are directly responsible for. But I think hospitals will find it difficult not to act.