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NHS EMPLOYERS’
SUBMISSION TO THE
NHS PAY REVIEW BODY
2017/18
September 2016
2
Contents
Key messages 3 - 7
Section 1 Informing our evidence 8 - 27
Section 2 Modernising Agenda for Change 28 - 37
Section 3 Workforce supply 38 - 48
Section 4 Staff engagement and the NHS Staff Survey 49 - 51
Section 5 Pensions and total reward 52 - 61
Section 6 Staff numbers and pay bill 62 - 69
Annex A
Results from NHS Provider/NHS Employers
workforce survey
70 - 74
Annex B Expected basic pay per FTE increase in
2016/17 through increments by AfC Band
75
Annex B1 Expected basic pay per FTE increase in
2016/17 through increments by staff group
76 - 77
Annex C
Proportion of staff receiving recruitment and retention previa (RRP) by staff group and AfC Band April 2016
78 - 79
Annex C1
Proportion of staff receiving recruitment and retention previa (RRP) by staff group and LETB region April 2016
80 - 81
Annex D
Paybill metrics for Total HCHS non-medical staff
82 - 84
Annex E Percentage of AfC staff on top of their brands 85 - 87
3
Annex F
Time series of non-medical staff by staff group
88 - 90
Annex G1
Non-medical staff by staff group and AfC group and AfC band, September 2015
91
Annex G2
Non-medical staff by region and AfC band, September 2015
92
Annex H
Time series of mean basic pay by staff group 93 - 94
Annex H1
Time series of mean total earnings by staff group
95 - 96
Annex I Advertised vacancies by staff group 97 - 98
Annex I1 Advertised vacancies by region 99 - 100
Annex J Increments and positions within band 101 -104
Annex K Cost impact of the National Living Wage on the NHS paybill
105 - 106
4
Key messages
Financial challenge
The NHS continues to face unprecedented financial and service
challenges. The majority of trusts fell into deficit during 2015/16 and the
overall shortfall has now reached over £2.5 billion1, the highest level seen.
The financial settlement for the NHS up to 2020 is extremely challenging,
with employers set ambitious targets to deliver efficiency savings. At the
same time, demand for services continues to rise. Performance indicators
show the service is under great pressure as demands for care increase
and other public services reduce provision.
Concerns about NHS finances link through to pay decisions for NHS staff.
Pay makes up more than two thirds of the budgets for most hospital costs.
Changes in staff costs, above those already planned for, will have a
significant impact on the financial viability and sustainability of NHS
financial plans. Continuing to contain pay costs remains an integral part of
addressing this financial challenge.
This financial position sets a key context for this year’s evidence.
Transformation challenge
A different approach is required to deliver a health and social care system
that is capable of meeting the scale of the financial and sustainability
challenge.
National policy has identified the significant and necessary changes
required to: shift care from hospitals to the community; introduce new
models of care that support the integration of health and social care; and
support a focus on preventing illness and promoting health and wellbeing.
Sustainability and transformation planning (STP) is helping to bridge the
gap between health and social care, with 44 STP footprints charged with
1 Kings Fund (July 2016) Deficits in the NHS 2016
5
delivering plans that deliver transformation of the services provided to local
communities.
It is expected that these transformation plans will improve outcomes for
people accessing services, support greater efficiency and effectiveness in
service delivery and deliver cost savings.
Integrating care across organisations and sectors will lead to
considerations around the current and future workforce. Opportunities to
restructure and create new roles to meet changing needs will need to be
taken to support system integration. This requires a new and integrated
workforce plan to be created (across boundaries).
Workforce challenge
How the NHS plans, trains, regulates, supports, deploys and rewards its
staff will be critical to the delivery of the triple aim identified in the Forward
View.
The results of getting workforce planning wrong are potentially very
significant and will create further system instability in an already
pressurised environment. Financial pressures will not be effectively and
efficiently managed (including those linked to staff shortages, which
historically have translated to higher costs through increases in agency
spend).
Senior policy makers from across the health system have recognised that
a new approach is required to meet the scale of the challenge presented
both now and in the future with regards to workforce.
Employers welcome the development of a national workforce strategy set
against the 5 Year Forward View (5YFV)2 and the creation of clear plans
for service delivery. They will be looking for national actions which enable
greater innovation in ways of working, as well as enhance the broader
reward and employment package for NHS staff.
2 NHS England (October 2014) Five Year Forward Plan
6
Pay and contract reform
NHS Employers continues to aim for and seek out opportunities to reform
the Agenda for Change (AfC) pay and conditions. Although some changes
were agreed in 2013, the pay system has not undergone systematic
review since it was introduced in 2004.
It remains the view of employers that the pay system needs to change to
support the NHS to deliver the priorities set out in the 5YFV, address the
quality and efficiency challenges linked to the work on delivering care
across seven-days, meet the changing needs of patients and integrate
new models of care.
Employers are looking where possible for a balanced package of reforms.
Reforms to the pay structure and other terms and conditions would
contribute to and support system wide initiatives, increase capacity and
reduce the costs of agency staffing, but without creating new and
additional cost pressures.
Constructive national discussions with NHS trade unions on pay reform
are ongoing, but progress has been slower than anticipated..
It is unclear whether, within the constraints of both government public
sector pay policy and the current system financial pressures, agreement
around a balanced package of reforms can be reached within this
spending review period.
A reform agreement will not be possible for implementation during
2017/18; therefore any pay award for 2017/18 will be set against current
government public sector pay policy.
Pay award 2017/18
The pay review for 2017/18 will be subject to the government’s public
sector pay policy set out in the 2015 Budget, that increases across the
public sector will be constrained to an average of 1 per cent until 2020/21.
In the absence of an agreement on pay reform, there is consensus
amongst employers in favour of the same percentage increase for all AfC
staff within the 1 per cent cap. Any pay uplift that is not fully funded
through the tariff would create additional financial pressure for employers.
7
There is not sufficient evidence to justify differential pay awards to AfC
staff in 2017/18. The common view is that an envelope of 1 per cent
would not in practice make any differentiation worthwhile and would have
a negative impact on the morale of the workforce. We are not aware of any
labour market challenges at national or local level that would be resolved
by differentiated pay awards.
There are particular recruitment and staff retention challenges facing
employers in the London area which go beyond the level of High Cost
Area Supplement (HCAS) payments. We have been working with trade
union colleagues to raise particular concerns regarding housing and
transport costs with the Mayor of London.
The NHS continues to have a well-regarded package of valuable
employment benefits, including a generous pension scheme. In addition,
we are increasingly seeing that employers in the NHS are broadening their
definition of total reward to include recognition schemes, health and
wellbeing initiatives and training and development programmes, among
others.
Furthermore, employers remain committed to enhancing the package of
measures that they can put in place to recruit, retain, deploy and develop
the NHS workforce in a way which responds to their aspirations and
personal and family priorities.
8
1. Informing our evidence
Introduction
1. We welcome the opportunity to submit our evidence on behalf of healthcare
employers in England for the 2017/18 pay review. We continue to value the
role of the independent NHS Pay Review Body (NHSPRB), in bringing an
expert view to remuneration issues in relation to the NHS workforce.
2. This year, our evidence has been informed by a regular programme of
employer engagement with a full range of NHS organisations, on their
priorities for pay and terms and conditions reform. We have:
had direct discussions with a number of NHS chief executives and HR
directors. In addition we have attended regional HR director network
meetings, and other employer networks throughout the year for further
input.
had substantive discussions with members of the NHS Employers
policy board, and with employer representatives on the NHS Staff
Council
undertaken, in collaboration with NHS Providers, a short online survey
of employer views during July 2016 to complement feedback received
from the various other networks.
3. Last year our evidence was framed within the challenges faced by the NHS
on finance, transformation and workforce. These remain and will become
more intense, complex and urgent over the next few years.
4. The chief executive of NHS England has described3 the current priorities for
the NHS as stabilising finances, implementing the 5YFV and delivering on
STPs. These are the challenges that employers in the NHS will face in the
short and medium term.
3 Speech to the NHS Confederation Conference in June 2016 https://www.england.nhs.uk/2016/06/simon-stevens-
confed-speech/
9
5. Employer plans have been designed to deliver significant transformational
change to services over the next three to five years. In compiling our
evidence we considered whether a longer term pay deal provides employers
with stability and certainty within the context of the current government
public sector pay policy and the financial pressures facing employers. The
majority of employers said that they would prefer multi-year pay settlements
for staff not already covered by pay agreements. Those in favour of a multi-
year agreement highlighted the stability it offers to employers, giving them
the ability to think strategically and plan ahead with regard to pay costs.
The financial challenge
6. Increases in demand for NHS services continues to outstrip increases in
NHS funding. Acute activity grows each year by around 2.5 per cent while
the pressure on prices increases by up to 3.7 per cent a year.4 In contrast,
NHS funding will grow by a little under 1 per cent each year in this
parliament.5 This creates a gap between funding and demand that needs to
be met through efficiencies to maintain current services.
7. A £22 billion efficiency programme has been outlined and the NHS will be
expected to deliver this by 2020. This includes £8.6 billion worth of hospital
savings made up by productivity improvements of 2 per cent each year.6
This would be a significant step up from the long-run average in the NHS of
around 1 per cent a year and would require a reversal in recent hospital
productivity, which has been reducing for the last three years.7 In the latest
NHS Confederation member survey, 96 per cent of NHS leaders had little or
no confidence the efficiency savings set out in the 5YFV would be possible.
4 NHS England (May 2016), NHS Five Year Forward View: Recap briefing for the Health Select Committee on technical modelling and scenarios
5 Written evidence submitted jointly by the Nuffield Trust, the Health Foundation and The King’s Fund to the Health Select Committee inquiry on the impact of the Spending Review on health and social care (January 2016)
6 NHS England (May 2016), NHS Five Year Forward View: Recap briefing for the Health Select Committee on technical modelling and scenarios
7 Health Foundation (March 2016), A perfect storm: an impossible climate for NHS providers’ finances
10
8. The consequence of not closing the funding gap is increased financial
pressure on local NHS commissioners and providers. Last year, NHS trusts
and foundation trusts ended the year with a combined deficit of £2.45 billion
and 157 of 240 trusts were in deficit. This end-year position would have
been poorer were it not for a non-recurrent £950 million capital to revenue
budget transfer.8 In 2016/17 £1.8 billion of additional funding has been
agreed for providers as part of a Sustainability and Transformation Fund.9
Despite this funding, NHS providers are still forecasting a deficit for this year
of around £550 million, which national bodies are aiming to reduce to £250
million.10
9. Staff costs represent 70 per cent of a typical hospital’s total costs. They are
a key factor in the declining financial position of NHS providers. Between
2011/12 and 2014/15, the share of income spent by acute trusts on staff
rose by 8.1 per cent. The growth in spending on non-permanent staff in
particular has been significant in recent years with a 24 per cent increase,
as a share of total income, between 2012/13 and 2014/15.11 Reports by the
Health Foundation and the National Audit Office identify a strong
association between spending on non-permanent staff and an
organisation’s financial performance. For every percentage point in a trust’s
staff costs accounted for by an agency, their net financial position is likely to
fall by 0.4 per cent of their operating costs.12
10. A cap on agency spending was introduced last year and has been fully
operational since April 2016. This sets a ceiling for each trust on their total
agency expenditure and requires the use of approved framework
agreements to procure all agency staff.13 A new single oversight framework
has been proposed that will enable regulators to mandate NHS
8 National Audit Office (July 2016), Reports on Department of Health, NHS England and NHS Foundation Trusts’ consolidated accounts 2015-16
9 NHS Improvement (March 2016), The Sustainability and Transformation Fund and financial control totals for 2016/17: methodology
10 Letter from Jim Mackey to Chairs and CEO’s of Foundation Trusts and NHS Trusts on 2016/17 Financial Position (June 2016)
11 National Audit Office (December 2015), Sustainability and financial performance of acute hospital trusts
12 Health Foundation and NAO
13 NHS Improvement,(March 2016) Agency rules
11
Improvement to help improve the quality and management of services,
where trusts have exceeded their agency cap by more than 25 per cent.14
Evidence suggests if trusts could achieve 70 per cent compliance with the
rate caps, they could save 20 per cent of their annual locum bill.15
11. During July 2016, national bodies announced a mid-year financial ‘reset’
with the aim of restoring financial discipline and helping to ensure ongoing
financial sustainability for the NHS. This has seen five providers and nine
CCGs placed into a new financial special measures regime, while all
providers and commissioners have agreed financial control totals that
represent minimum levels of financial performance they will be held
accountable for.16 These totals will be maintained while the NHS prepares
for a two-year planning and contracting round for 2017-19, which is due to
be completed by December 2016.
12. The two-year planning round will be supported by a two-year national tariff,
setting national prices until 2019.17 It will not be known until later in the year
what level of efficiency factor will be set in tariff for the next two years,
however it has been reported that there are no plans to set a target above 2
per cent.18 This is in line with the efficiency factor set in this year’s tariff,
which was reduced from a 4 per cent factor for the previous five years.
13. The focus on a two-year planning round, supported by a multi-year tariff, will
aim to support the implementation of STPs, which are intended to receive
the bulk of additional funding committed in the 2015 Spending Review.19
This will depend on how far the deficit in the provider sector has been
eliminated, which is the reason for concern about the carry-over of a deficit
from 2015/16 into this year. The latest temperature check from the
Healthcare Financial Management Association identifies that only 26 per
14 NHS Improvement (June 2026), Single Oversight Framework Consultation (June 2016)
15 Liaison (June 2016), Taking the temperature: A review of NHS agency staff spending in 2015/16
16 NHS England (July 2016), “NHS action to strengthen trusts’ and CCGs’ financial and operational performance for 2016/17”
17 NHS England and NHS Improvement (August 2016), National tariff proposals for 2017/18 and 2018/19 (August 2016)
18 “NHS issues plan for two-year payment tariff” in Public Finance (02 August 16)
19 NHS (December 2015), Delivering the Forward View: NHS planning guidance 2016/17 – 2020/21
12
cent of trusts who reported a deficit in 2015/16 expect to have a surplus in
2016/17 and that 30 per cent of trusts who reported a surplus in 2015/16
expect to have a deficit this year.20
Impact of the National Living Wage
14. The introduction of the statutory National Living Wage (NLW) will not have a
direct impact on the NHS in England during 2017/18 but will have longer
term implications. The NLW was introduced with effect from April 2016 at
£7.20 per hour for employees aged 25 and over. The government’s target is
that this will increase to £9.00 by 2020. AfC rates are currently higher than
the NLW; the lowest pay point with an annual basic pay rate of £15,251 is
equivalent to £7.80 per hour during 2016/17, 8.3 per cent higher than the
government living wage.
15. Assuming that pay increases are in line with public sector pay policy (1 per
cent uplift per year for 2017/18 to 2019/20), we estimate that the NLW is
likely to impact on AfC pay scales from 2018/19. We understand the
additional costs of the NLW will have to be met within the constraints of
public sector pay policy. We estimate the cost of meeting statutory
compliance would add 0.02 percent (circa £10m) to pay bill in 2018/19 rising
to 0.39 per cent (circa £180m) by 2020/21. Annex K provides further
information for these estimates. However, it is not yet known what the
trajectory of the increases will be to the NLW rate post 2016. If the
additional costs of the NLW are to be met within the public sector pay policy,
to maintain an average award of 1% for all staff, other NHS staff earning
above the National Living Wage would be required to receive an award of
less than 1%.
16. As the AfC pay rates do not have age related points, it is unlikely that the
NHS will be able to benefit from using the under 25 rates moving forward.
We understand the additional costs of the NLW will have to be met within
the constraints of public sector pay policy.
20 HFMA (July 2016), NHS financial temperature check
13
17. NHS pay rates are already favourable in comparison to the NMW. The
NMW for workers aged 21 and over is currently £6.30 per hour and is likely
to increase in October 2016. The 2016/17 point 2 hourly rate of £7.80 per
hour during 2016/17 is 23.8 per cent higher than the legal minimum wage
for workers aged 21 and over.
18. In our survey we asked employers about implementation of the NLW and
the challenges and opportunities this presented. A few employers reported
that they were already paying the Living Wage Foundation rates21, which
are voluntary and set at a higher level than the NLW. Other employers (who
will be paying the NLW from 2018/19) said that there were potentially
positive impacts including: opportunities to increase apprenticeships in the
NHS and demonstrate to lower paid staff that the NHS is a fair and
equitable employer.
“The opportunities for meeting the living wage are improved recruitment and
retention for lower banded staff where churn is normally high.
19. Challenges identified by employers include:
an additional financial burden on already tight budgets if no additional
funding is made available, which will need to be borne by other staff to
pay for the NLW and may damage morale. employers told us there is
no evidence of market pressures for Bands 1 - 3 to receive additional
pay and therefore it is not a priority;
the impact on current pay structures – over time compression of pay
scales at bands 1-3 could undermine the pay structure at the bottom of
the pay scale;
a need to re-profile roles to get more productivity from higher levels of
pay;
funding any future increases in the NLW which may be higher than the
general settlement.
21 http://www.livingwage.org.uk/calculation
14
potential labour market issues - employers in other sectors may seem
to be more competitive in relation to basic pay being offered, making it
even more important for the NHS to stress the total reward package.
“The challenge of bringing those in lower bands (1-3) up to the living wage
is if it is funded from the 1 percent – resulting in damage to the morale of
other pay bands who will receive less than 1 percent to pay for it. This will
be perceived as extremely unfair application of government policy.”
Agency/locum spend
20. NHS Improvement’s consolidated guidance22 outlines the rules on the
procurement of agency staff across all groups including doctors, nurses and
all other clinical and non-clinical staff which apply from 1 April 2016. The
rules require compliance against a ceiling set for total agency expenditure,
the use of approved frameworks to procure all agency staff at rates set at or
below the price caps, and introduce a maximum hourly wage rates for
agency workers from 1 July 2016.
21. Almost two thirds of survey respondents indicated that their agency/locum
spend had been lower since the introduction of the price caps, while only a
very small percentage of employers had seen a rise in agency locum spend.
Less than a third of survey respondents believed that the agency cap had
encouraged staff to work for them on a permanent basis.
22. Where permanent recruitment has been successful it has primarily been
with nursing or AHP staff and less so for medical staff and in hard-to-fill
posts.
23. There has also been a positive impact on the numbers working on internal
staff banks. In some cases lack of supply had pushed employers towards
high cost agencies. Despite the caps, individuals may opt to remain with
22.https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/510391/agency_rules__23_March_
2016.pdf
15
agencies for better rates of pay and the flexibility that agency work offers.
The transformation challenge
24. In our 2015/16 evidence we described the transformational vision that the
5YFV set out for new models of care delivering a better NHS by 2020/21.
The emphasis has now shifted firmly towards delivery and implementation.
25. Many of the plans for transforming services have been designed to deliver
significant change over the next three to five years. In formulating our
evidence we have considered whether a longer term pay deal will provide
employers with some stability and certainty as they plan and deliver
services locally within a similar timeframe.
26. In December 2015 NHS England published planning guidance for 2016/17-
2020/21 to help ensure that health and social care services are built around
the needs of the population.23 The NHS has a clear set of plans and
priorities for 2016/17 and NHS England has described these in a series of
must dos. These include ensuring that by March 2017 25 per cent of the
population will have access to acute hospital services that comply with four
priority clinical standards and reducing excess deaths by increasing the
level of consultant cover and diagnostic services available to patients at
weekends.
27. Every health and care system in England must produce a multi-year STP
showing how local services will evolve and become sustainable over the
next five years and deliver the 5YFV vision of better health, better patient
care and improved NHS efficiency. STPs will offer opportunities to think in
different ways about workforce within a wider strategic plan.
28. Local must do’s in the planning guidance for 2016/17 include restoring the
system to aggregate financial balance, including delivering efficiency
savings, complying with maximum total agency spend and maximum hourly
rates set out by NHS Improvement.
23NHS England (December 2015) Delivering the Forward View: NHS planning guidance 2026/27-2020/21.
16
29. The NHS 5YFV recognises that:
“Healthcare depends on people — nurses, porters, consultants and
receptionists, scientists and therapists and many others. We can design
innovative new care models, but they simply won’t become a reality unless
we have a workforce with the right numbers, skills, values and behaviours to
deliver it.”
Integrating health and social care
30. Integrated care has become an important aspect of healthcare reform over
the past few years. This is a response to challenges faced in both the health
and social care sectors arising from a rapidly ageing population; rising
demand for care; increasing numbers of complex patients with multiple long-
term conditions; moving care from hospitals to primary care; and poorly
coordinated care (for example between community health services and
hospitals and between the NHS social services).
31. This requires investment at a national level to build the capacity and
capability of the workforce to provide integrated care. At a local level it
means a workforce that meets the needs of its citizens and is equipped to
deliver holistic, proactive and integrated care. The aim of this is for
communities to have confidence that local systems are effective and offer
value for money and that individuals are confident that local services are
safe, effective, high quality and accountable.
32. The Cities and Local Government Devolution Act received Royal Assent in
January 2016 providing the legal framework for devolving healthcare
functions to local authorities. The Act provides an additional push towards
integration of health and social care, but not all devolution plans currently
include healthcare. However, integration will feature as part of STPs and
significantly a small number of STP leaders come from local government.
33. It is not yet known what the implication of these changes are for the NHS
workforce. It is clear that there will be no national blueprint and may mean
various different approaches. This supports our general position that there
needs to be more scope in national agreements for employers to tailor the
employment package to meet local operational and organisational needs.
Some employers have suggested that the development of joint working with
local authorities may mean that, in future, pay and conditions changes in
17
both the NHS and local government may need to be considered together. A
set of nationally less prescriptive NHS terms and conditions would help
facilitate local flexibilities.
Employer views
34. We asked employers for their views on the pay and workforce implications
arising from system changes such as new care models and devolution.
35. Respondents consistently highlighted the need for flexibility in pay, contracts
and terms and conditions to allow organisations to address local priorities.
Staff will have to work differently and could be accountable to more than
one organisation. Closer working with the local government employers, will
mean that the barriers that make staff movement difficult between different
employers will need to be considered.
36. The ability to build flexibility and flexible working models into the system
could support employer aspirations of a more diverse workforce. Local
government organisations already have some experience of integrating
NHS staff following the transfer public health functions to local authorities
which could provide a useful source of learning.
37. Employers have told us that responding to the need to work differently
across organisations will present a major training and development
challenge. One outcome might be generically skilled staff across health and
social care.
38. One vanguard site for primary and acute care systems (PACS) said that
experience was beginning to show that common competencies, irrespective
of employer, were emerging which in turn would need a common approach
to job evaluation across organisational boundaries.
“Devolution/STP requires a whole system approach and solutions to the
provision of care. This requires flexibility in the workforce across health and
social care but currently contracts and the law do not allow this to happen
with ease.” Respondent from a clinical commissioning group
39. Respondents also noted the practical difficulties involved, including the
management of pay differentials and the potential of pay inflation where
18
social care staff are currently paid less than their NHS equivalents for
similar work. As one employer explained:
“We are moving towards integration with social care, but the base pay and
pensions differentials are a stumbling block. A jointly recognised staffing
and contractual structure would make the process of integrating teams
much easier – as would transition funding.”
Seven-day services
40. The government has been clear about its intentions on seven-day services.
Transformation of this scale and complexity requires well-trained, well-
motivated, modern and flexible workforce.
41. Many staff already routinely work shift patterns that mean they can be at
work on any day of the week. The national AfC agreement includes no
direct contractual barrier to the provision of seven-day services. However,
there remains a case for some adjustments to the unsocial hours payment
provisions to help make the delivery of seven-day services more sustainable
for the longer term. Such changes ought to be agreed with NHS trade
unions as part of a wider balanced package of pay and contract reform.
42. Employers are committed to the core government objective to ensure
reliable and safe care which all patients should reasonably expect from their
national health service across all days of the week. It will enable timely
access to senior clinical decision making and interventions, enable better
patient outcomes, reduce avoidable mortality and patient harm and improve
the patient experience. It allows for better utilisation of the facilities, more
speedy diagnosis, improved patient flows and reduced delays and waiting
times, as well as avoiding unnecessary admissions.
43. The NHS England NHS Services, Seven Days a Week Forum examined24
the evidence base for seven day services in hospitals. One of the
conclusions of the forum was that ‘there is a large body of evidence
associating timely consultant input to patient care with improved outcomes’.
24 https://www.england.nhs.uk/wp-content/uploads/2013/12/forum-summary-report.pdf
19
It also noted:
variable staffing levels at weekend
the absence of senior decision makers (consultants and other senior
clinical staff);
a lack of consistent specialist services (for example diagnostic) at
weekends;
a lack of availability of specialist community and primary care
services.
44. From the ten produced by the forum, the four clinical standards that have
been prioritised by the government are those which were considered as
being those most likely to tackle the risk of avoidable mortality and harm
across all seven days of the week. The priority standards are:
time to first consultant or senior-decision maker review – seen as
soon as possible but at least within 14 hours of arrival at hospital
diagnostics – seven-day access to x-ray, ultrasound, CT, MRI, echo
cardiology, etc within set timescales
consultant-led intervention – 24 hour access to critical care,
interventional radiology, interventional endoscopy, emergency
general surgery etc
on-going review - all patients with acute and urgent care needs must
be seen and reviewed by a consultant, twice daily, and patients on
general wards once daily, unless it has been determined that this
would not affect the patient's care pathway.
45. We understand that the key requirement is that, by the end of this
parliament, all patients with similar urgent and emergency hospital care
needs will have access to the same level of consultant or senior clinical
decision maker assessment and review, diagnostic tests and treatment,
seven days a week, as described by the four priority standards. Employers
also expect by 2020 to be working towards implementation of all ten
20
standards. This is being pursued through the standard NHS contract and
NHS England's Strategic Transformation Plans25.
46. Achieving the NHS clinical standards will take time and progress will be
achieved by the employment of additional clinical staff and through
continued productivity improvements. The NHS is developing its short and
long-term workforce plans to enable this objective. It will not be achieved by
simply diluting existing staff from Monday to Friday and redeploying them
across the weekend.
The workforce challenge
47. NHS staff are essential to the planning and delivery of efficient, innovative
and effective models of patient care.
48. All of the providers responding to our survey said that they had issues with
the recruitment and retention of staff. The main area of concern was a
national skills shortage, followed by competition from other NHS
organisations, local skills shortages, and the age profile of the workforce.
Pay and reward featured less prominently.
49. Employers described a range of local initiatives to address these difficulties,
including:
local and international recruitment campaigns
social media marketing
making use of local recruitment and retention premia in hard to fill
posts
establishing links with local education providers to improve workforce
growth in hard to fill roles
redesigning roles
25 https://www.england.nhs.uk/ourwork/futurenhs/deliver-forward-view/stp/
21
widening benefits and promoting the total reward package
promoting staff/career development to aid retention of staff
partnership working with other employers to promote local areas.
50. One employer described their involvement with Health Education England
as part of the Global Health Exchange Scheme to recruit registered nurses
on a three year fixed training contract. The aim is to recruit up to 3,000
registered nurses for England in order to help with the short to medium term
national labour shortage. At the same time they were increasing their
commissioned numbers of undergraduate nurses and expanding their
placement capacity to ensure a future guaranteed supply of registered
nurses.
“We have about 175 nurse vacancies and about 23 consultant vacancies -
therefore we have a major reliance on agency staff. We only have a small
internal bank too, which we are taking steps to increase. We are also
recruiting flexible pools of healthcare assistants. Although we have very
rigorous agency approval processes and monitor it tightly, we have to ‘break
glass’ to make sure our services are safe…the sheer scale of our agency
need has kept costs high”
High host area supplements (HCAS)/ London
issues
51. A small number of employers responded to our survey question on high cost
area supplements.
52. Employers pointed out the retention challenge posed by staff who move
from inner to outer London and the combined impact of increased costs and
a reduced allowance. One employer on the border between inner and outer
London indicated this impacted particularly on their ability to recruit to hard
to fill services.
53. Other comments focused on the value of the supplement. Feedback from
staff at one trust was that it didn’t cover the higher cost of living in London
and the South East. Feedback from other employers suggested that
22
supplements should be flattened out across London - although not at the
expense of a general 1 per cent uplift.
54. Rising accommodation and transport costs have meant there are particular
challenges facing NHS organisations in London with regard to recruitment
and retention. Jobs requiring a car can be more difficult to fill. Further
research is needed on living and transport costs and travel patterns.
“The NHS should look to use HCAS to introduce a differential that better
reflects the higher costs which have increased markedly with house prices”.
55. NHS Employers has been working with trade union colleagues to raise
particular concerns regarding housing and transport costs with the Mayor of
London. . This work has included analysis of the postcodes of more than
100,000 NHS staff between 2010 and 2015 which showed more staff are
moving out of London to live and work. During this time, transport costs rose
by 25 per cent and average house prices rose by 37 per cent. This is
leaving London NHS Trusts struggling to attract and retain key workers
needed to ensure safety for patients.
56. NHS Employers and the London NHS Partnership called for the mayoral
candidates in the 2016 election to help the future of NHS workers with a
commitment to:
work with London’s NHS employers and Transport for London to
review the scope to reduce transport costs for key NHS staff
provide key worker housing and prioritise new housing developments
for NHS workers.
Pay and contract reform
57. Our continued priority has been to seek reform of the national pay and
conditions system. Employer feedback has consistently told us that the AfC
pay system needs change in order to ensure it supports the transformation
agenda and is responsive to quality and efficiency challenges. It also needs
to be responsive to the changing needs of patients and the evolution of new
models of care. Whilst there have been some elements of reform in March
2013, the pay system has not undergone systematic review since it was
introduced in 2004.
23
58. It is important that further pay reform ensures that the NHS continues to
offer a competitive employment package that allows for the recruitment and
retention of the skilled and qualified staff needed; maximising their
contribution and engagement. Reform should aim to contribute to wider
initiatives to reduce the costs of agency staffing and minimise the need to
reduce headcount, without creating new additional cost pressures.
59. Employers’ continue to tell us that their preference is that pay reform is
delivered through agreed changes to the national framework over the next
two years. Our engagement work showed a preference to reform some
priority areas rather than to seek wholesale changes.
60. During 2015/16 there has been constructive discussions with our trade
union partners on the scope for an agreed balanced package of pay
reforms. The initial focus has been on options to revise pay structures with
shorter pay bands and the removal of overlaps between pay bands.
Substantive discussions have not yet been possible on wider conditions of
service issues. Given the current financial and political environment, and the
constraints of public sector pay policies, progress has been slower than
planned and it is now clear that new arrangements will not be introduced
from April 2017 as originally hoped for.
Pay award 2017/18
61. The pay review for 2017/18 will be subject to the government’s public sector
pay policy, set out in the 2015 Budget, that pay increases across the public
sector will be limited to an average of one per cent a year for four years.
62. The NHSPRB has been asked to consider whether or not there is evidence
to justify targeted or differentiated awards within the 1 percent pay
envelope. We have had clear feedback from employers that they have no
evidence available at local level to justify differential pay awards to AfC staff.
The common view is that an envelope of 1 per cent would not in practice
make any differentiation worthwhile and could have a negative impact on
the morale of the workforce.
63. We are not aware of any labour market challenges at national or local level
that would be resolved by differentiated pay awards in
2017/18.Respondents to our survey were asked to rank a series of options
on how they would apply a 1 per cent pay award. The option of giving all
24
staff 1 per cent was the highest ranked with over half of employers selecting
this as their highest choice. The main reasons given making for this choice
were:
1 per cent was insufficient to make significant change
“The amount is too small to make significant impact on recruitment and
retention or a reward scheme. Differentials across types of post could
develop variations in pay scales between different trusts and a
departure from the national pay scales would create a competitive
environment between Trusts and be detrimental to recruitment and
retention.
The effort required to work out alternative local options would be
disproportionate to any gain
“As the pot is so restricted it is hard to justify putting a lot of effort into
anything other than spread by same percentage…effort should go into
finding ways of changing terms and conditions to release cash to spend
on different priorities”
The potential impact on staff motivation and morale for those not
receiving an uplift.
“1 per cent is not a lot of money to work with…about keeping all staff
motivated during a time when we are trying to do things differently and
transform our services
“The pay increase is small and not significant enough to motivate staff
under a performance pay process. Staff at all levels suffer financially so
we believe the fair way would be to award the increase across the
board”
64. The annual uplift is a cost of living increase rather than a reward payment
which should be awarded to all staff.
65. Those respondents who selected other options highlighted using the 1 per
cent to help address recruitment and retention issues, followed by giving
more to lowest paid staff, giving more to high performers and giving more to
staff at the top of their band/grade.
25
66. The prevailing view was to award 1 per cent evenly as employers saw this
as the most equitable option. Although some employers were attracted to
the possibility of making more creative use of the resource locally, there was
a recognition that this would depend on them having sufficiently resourced
and developed performance management systems and overall there
seemed to be little appetite for this at the moment. The effort to attempt
something different within the limit of 1 per cent would be unlikely to resolve
significant supply issues.
67. Some employers saw the risk of pay spiral and unnecessary competition if
employers were encouraged to adjust pay locally – though some said that
decisions on local pay could be limited to AfC band 8 and above.
68. Several contributors said that the aim should be to reward as many staff as
possible without rewarding poor performance. Some felt that the uplift was
intended to recognise cost of living increases and was not designed to
provide a reward system. Differentiated pay based on objective
performance measures would be more acceptable to staff than arbitrary
awards.
69. Contributors also noted that there would also be an adverse impact on
morale if all staff were not treated the same which could in turn affect their
willingness to engage with service redesign and transformation work.
70. There is no evidence that further targeted increases to the lowest pay points
are required on labour market grounds. The view is that NHS pay rates and
the wider employment package remain competitive in the labour market,
particularly when compared to some other public sector employers. NHS
rates will be higher than the statutory National Living Wage during 2017/18.
71. We asked employers about whether or not they would prefer a single or
multi-year pay approach. The majority of survey respondents said that they
would prefer multi-year pay settlements for staff not already covered by pay
agreements, highlighting the stability and certainty offered to both staff and
employers who would be able to think strategically and plan ahead with
regard to pay costs.
“Provides stability and certainty… fits with the move towards longer term
planning and settlements with trusts.”
26
“Flexibility within a multi-year deal would allow us a larger pot to invest for
priority staff/care needs in a strategic manner. It would help us manage
positive dialogue with unions, which the normally late 1 per cent deals
limits.”
72. It was, however, recognised by some that a longer term pay settlement
would work best in the context of supporting the transition to a reformed pay
structure rather than to perpetuate the existing arrangements.
73. Others noted the general level of uncertainty post referendum and that in
the current circumstances a single year deal would be preferable as it was
important to retain pay flexibility rather than be locked into a multi-year pay
deal.
“There is significant uncertainty at present and being tied into a multi-year
pay deal may cause more problems than it resolves”
74. We estimate that just over half of all AfC staff will be entitled to a pay
increment in 2016/17 worth between 1 and 6.7 per cent (see Annex J), even
without an increase in the national pay scales. Annex B details the average
basic pay increase by pay band and staff group.26 The average increase is
1.8% (this includes those at the top of the band who do not receive an
increment).
Summary
75. In summary, our extensive programme of employer engagement tells us the
following:
Employers continue to stress the importance of further pay and
contract reform and tell us that meaningful pay reform must be in a
balanced package of changes to include terms and conditions, as
well as pay structure reform.
26 NHS Employers Estimates. Taken from April 2016 ESR Data Warehouse pay bill query of Agenda for
Change staff. scaled to NHS Hospital & Community Health Service (HCHS) monthly workforce statistics
- March 2016, Provisional Statistics
27
Employers support the same percentage increase to be made to all
AfC staff within the average 1 per cent cap. There is some limited
support for a longer term pay agreement to provide certainty and help
planning.
There is no evidence available at national level to justify or support
differential increases in 2017/18. The average 1 per cent envelope is
not enough to make any significant targeting worthwhile. To do so
would be seen as inequitable and potentially damaging to staff
morale and employment relations.
NHS organisations are facing a growing and changing demand for
care, at a time of increasing financial pressure and growing
employment costs. The priority is that available resources should be
used to support improvements to the delivery of patient services, and
the necessity of retaining key staff.
There was no significant support for changes to the HCAS unless
there was additional funding for employers in London. Increases to
the minima and maxima rates should be increased in line with the
headline pay award.
NHS organisations continue to face workforce supply issues in
relation to some of the health professional staff groups. The current
shortage is essentially a supply issue and is not related to pay levels.
A number are included on the Home office’s shortage occupation list.
28
2. Modernising Agenda for
Change
76. Delivering high-quality services and improving outcomes for patients should
be at the core of what the NHS does. In doing this the NHS terms and
conditions can act both as an enabler and a barrier. In an ever changing
healthcare environment, the national pay terms and conditions of service
need to be relevant and supportive of the necessary changes to service
delivery.
77. The pay system has not undergone a systematic review since it was
introduced in 2004, in a very different financial and policy environment than
the NHS today. The current system has in-built challenges that make it
difficult, in certain circumstances, for employers to reward and incentivise
high-quality patient care and deliver seven-day services.
78. In 2015, as part of the 2015/16 pay deal between the government and NHS
trade unions, there was a commitment by staff side organisations to talks
which look at the possibility of further reforms to AfC.
79. Employers continue to raise concerns about affordability and lack of
flexibility in the current system and are increasingly asking for the pay
arrangements to be better aligned to performance and productivity and
where possible to support capacity.
80. Most employers continue to support changes to be delivered through
agreed changes to the national framework. Any changes to the national pay
system must ensure that it remains a competitive employment package that
supports employers to recruit, retain and motivate the highly skilled and
committed workforce that will be needed, whilst maximising their
contribution and engagement.
81. Employee reward should consider not just the level of pay, but the entire
employment package offer. Any direct changes must support employers to
meet legal obligations and to effectively and efficiently allocate resources to
where they are needed most - without creating additional costs.
29
Agenda for Change review
82. The NHS PRB said in the 2015 report:
“We have previously recommended that the AfC pay structure is ready for
review and it seems to us that discussions about unsocial hours definitions
and premia are better taken forward as part of negotiation on the pay
system as whole, with the aim of agreeing a balanced package. Ideally this
should include a review of the length of pay scales, overlapping bands with
shared spine points, progression and improved links between reward and
performance, including incentives for staff at the top of their pay band.”
83. The 2015/16 national pay agreement, directly negotiated by government,
included a commitment from NHS trade unions to review the national
agreement, originally with a view to seeing if agreement on changes could
be reached by April 2016. We would note that the NHS Pay Review Body
subsequently endorsed the need for modernisation of the pay structure and
other conditions in their 29th Report.
84. Employer aims were to:
maximise the contribution of NHS staff and reduce the reliance on
agency staffing
strengthen the AfC agreement on pay progression - building on the
2013 flexibility to link pay progression to locally set performance
requirements.
review generally the need for further reform to the pay system.
85. Since then the parties on the NHS Staff Council have been involved in
active and constructive discussions with an initial focus on exploring the
scope to revise the pay structure and pay progression arrangements.
86. There is a shared aspiration to make the pay structure simpler in a way that
works better for staff and the service without disturbing the underpinning job
evaluation scheme and pay band structure. It is recognised that there will be
a need for some re-structure at the bottom of the current AfC pay scales to
accommodate the NLW pay rates. The parties are looking at how to revise
the pay structure in a way which would limit overlaps between pay bands,
reduce the number of pay points in a given pay band and create more even
spacing between pay points. The group is examining the practical, financial
30
and legal implications of this as well as the options available for transition to
such a structure.
87. It is disappointing that it will not be possible for new arrangements to be
agreed and introduced from April 2017 as was the original aim. Reaching an
agreement on pay and contract reform within the tight constraints of current
public sector pay policy, that meets both employer and trades union
aspirations, has proved difficult. For a final agreement to be reached,
employers will want to see adjustments to some wider terms and conditions
as part of a balanced package of changes.
88. The failure to reach a conclusion on pay reform this year is likely to make
the agreement on transition to a revised pay structure more difficult to
deliver within the government’s spending review period. This is because the
costs of transition would have to be spread over fewer years. Despite the
challenges the parties on the NHS Staff Council are continuing to explore
the possibilities for reaching an agreement on further changes in the longer
term.
Employer views
89. Most of those employers who provided feedback during our engagement
activity said that AfC reform remains a priority if achievable through
negotiation, with an aspiration that this should be delivered within the next
two years and a desire for some stability within the workforce to allow STP’s
to be met.
90. Those arguing for immediate reform cited the need for flexibility arising from
developments in devolution and other system change, including redesign of
services and deployment of staff. One employer commented:
“(AfC)… needs to be the vehicle to help drive change in behaviours and
attitudes locally, regionally and nationally”
91. The cost of the current contract was also another reason quoted in support
of more urgent reform, particularly with the emergence of a more
competitive health and social care sector where price is a key factor in
commissioning decisions.
31
“The pay system means that we are not cost competitive in the market we
operate and this has led to a loss of contracts and a recognition that we are
not able to put in a competitive tender based on our staff pay structures.”
92. Those for whom reform wasn’t a priority argued that there were other
competing pressures for the time and resources necessary to deliver
significant reform. One human resources director commented that there was
a risk in making concessions in minor reforms rather than waiting until
resources were available for more significant change:
“We can achieve these improvements without amending AfC. Renegotiation
will only otherwise lead to a pay pressure we’re unlikely to be able to afford”
93. Most employers were in favour of small scale, incremental change to a
number of priority areas of the contract rather than fundamental reform.
Regardless of their views on the scale and pace of reform, employers were
agreed in their wish for a contract which allowed organisations flexibility to
recruit and retain staff; to deliver their aims and objectives, and to align
performance to organisational needs.
Pay structure reform
94. As a consequence of the government’s target of £9 per hour by 202027,
some action is needed to revise the bottom of the pay structure. By
2020/21 we estimate that AfC Bands 1 and 2 will overlap in their entirety
with the bottom part of Band 3. This degree of compression would leave
employers facing significant challenges as a result of no pay differentiation
between different role levels covered by Bands 1-3. However additional pay
differentiation would inevitably mean increasing cost pressures above and
beyond the cost of meeting statutory compliance. We understand that the
costs of meeting the NLW have to be met from the value of the planned
average 1 per cent increase allowed for within the government’s pay policy.
95. The current pay structure has a number of bands that take up to 9 years to
progress from bottom to top. It is widely considered as good employer
practice to have pay bands that take no longer than 5 years to progress
27 Office for Budget Responsibility (March 2016), Economic and Fiscal outlook:
http://cdn.budgetresponsibility.org.uk/March2016EFO.pdf (footnote, page 64)
32
through. In some of the lower Bands, 1 – 3, there is a case for fewer pay
progression steps to reflect the fact that the period of competency
development for the roles are shorter.
96. Employers have told us consistently that priority should be given, when it is
affordable, to reduce the degree to which the AfC pay bands overlap with
each other. The overlaps act as a disincentive to promotion and
development, where someone may be earning less than those that they
manage. Having a clear difference in pay between bands will help
encourage staff to seek to take on higher levels of responsibility.
“Current pay arrangements are becoming unaffordable and
unsustainable…and sometimes fail adequately to reward or actively
disincentivise career progression”
“(AfC) does not provide the flexibility to reward and retain staff. There are
limited incentives for staff at the top of their band”
Terms and conditions reform – Increasing workforce capacity
97. The priority for employers are changes which they believe will contribute
towards:
increased workforce capacity and thereby help to reduce agency
spending;
recruitment and retention of staff and improvements in their health
and wellbeing
support in the training and development of staff
greater flexibility of terms and conditions to support future service
changes, for example seven day service provision.
98. Managing sick leave was an area in which employers expressed a particular
interest in exploring opportunities for change. Some employers commented
on the relative generosity of the scheme compared to the private sector,
although others noted that the security of sick pay was valued by staff in the
event of serious illness. There is also recognition that effective management
of sickness absence and an emphasis at local level on the health and
wellbeing agenda is vital in supporting people back to work and preventing
ill-health in the first place.
33
99. Employers are keen to explore the scope for the further extension of plain
time working with particular consideration given to the level of
enhancements that are paid for day-time weekend working.
100. Employers felt there was scope to look at annual leave entitlement, the
rates of entitlement and options for buying and selling leave.
Support for seven day service delivery
101. Employers would like to ensure that the provision for unsocial hours, in
particular the cost dis-incentive for scheduling weekend working, better fits
the needs of patient care over the weekend. This needs to align with
medical terms and conditions in a supportive way, along with the removal of
the consultant opt-out for weekend working.
102. The changes agreed to AfC in 2013 introduced a national framework
underpinned by shared values that allowed employers locally to determine
local variations to pay progression. Employers would like further
consideration to be given to the appropriate balance between national
prescription and local flexibility. Though some employers suggested that
they did not at present have local management capacity to be able to use
additional flexibilities effectively.
103. The Health Foundation report on NHS workforce policy Fit for Purpose
commented on the high level of prescription found in national NHS terms
and conditions relative to other sectors of the economy28.
“The Staff Handbook, which codifies the main AfC contract for non-medical
staff, currently runs to 307 pages in 47 sections and 30 annexes. The
product of detailed national negotiations, it covers everything from pay and
progression to flexible working and career breaks in a level of prescription
which in most other employment contexts would be left to much greater
local discretion.”
28 Health foundation 2016, Fit for purpose? Workforce policy in the English NHS, http://www.health.org.uk/publication/fit-
purpose
34
Ambulance issues
104. The 2015 pay settlement agreed between the Department of Health (DH)
and trades unions included a commitment that ambulance employers would
work with trades unions to address recruitment and retention issues
affecting ambulance paramedics. This was to include consideration of both
job evaluation profiles/appropriate pay bandings for paramedics and
whether evidence supported the application of a recruitment and retention
premia.
105. As part of the 2016 pay review, the NHSPRB considered evidence and
concluded that:
“We do not believe the case has been made to warrant the introduction of a
national recruitment and retention premium (RRP) for paramedics.”29
106. It is acknowledged that there is a shortage in the supply of qualified
paramedics. This is reflected by the inclusion of paramedics on the Home
Office’s occupation shortage list. The opportunities for using and employing
paramedics in a wider range of settings and organisations is contributing to
workforce gaps faced by ambulance employers. This is being addressed
through a number of initiatives, the most important of which is an increase in
the number of training places being coordinated by HEE. Further
information is provided in Section 3.
107. Representatives of ambulance employers, trades unions, commissioners of
ambulance services and other national stakeholders met in June 2016 to
consider how to make more rapid progress on various ambulance workforce
issues. The parties agreed to continue the national dialogue started by the
National Ambulance Partnership Forum to:
review national job profiles for paramedics, using the auspices of the
Job Evaluation Working Group;
identify ways to improve the employee experience and health and
wellbeing of ambulance staff. The parties will consider the
29NHS Pay Review Body twenty ninth report 2016
35
operational pressures that affect staff experience, issues around
violence ad aggression and perceived bullying and harassment in the
service.
find workable solutions to the challenges facing ambulance staff of
changes to retirement age; and, later to conduct a joint review of the
impact, take up and scope of the recently agreed Early Retirement
Reduction Buy Out scheme to be undertaken before April 2017.
108. NHSPRB recommended that partnership work on considering the national
job profiles and the differentiation between Band 5 and Band 6 roles be
taken forward as a matter of urgency. The parties are giving priority to
concluding the work on ambulance job evaluation profiles. The aim being to:
reach a conclusion to a review of the national job evaluation profiles
for paramedics as quickly as agreed job evaluation processes
allow:
produce guidance and support employers with the job evaluation
process at a local level (job matching):
seek to understand how Job Evaluation Group (JEG)
recommendations for a new profile(s) might impact on paramedic
deployment/roles:
ensure that ambulance commissioners are aware of and
understand the likely financial impact of any proposed changes to
banding in the immediate future and longer term.
109. In February 2016 there were about 12,200 FTE ambulance paramedics
employed in the ambulance service in England. Around 65 per cent were
on Band 5. Some trusts have used local variations on the AfC national
agreement, which has resulted in a number of trusts having higher
proportions of their paramedic staff employed at Band 6
110. An NHS Staff Council technical review of paramedic roles is being
undertaken and has found some evidence of an increase in the levels of
patient diagnosis and treatment. This is being driven by the requirements
of commissioners wishing to see more patients treated at the scene and
reducing transfers to hospital. The initial assessment of the impact on job
weight, in line with AfC job evaluation, indicates that more paramedic
posts will fall into Band 6.
36
111. If any new profiles are agreed, local employers will be responsible locally
for reviewing their paramedic roles to see if jobs match to the new
profile(s).
112. Ambulance employers face the challenge of coping with a potentially
significant increase in workforce costs which will not deliver efficiency
gains. The concern is that commissioners may not be able to find the
additional funding required. Commissioners have been looking to the
ambulance service to become a mobile treatment service which aims to
reduce hospital admissions by treating more patients at the scene. They
may be reluctant to support pay banding changes financially, if this simply
means paying more for the same level(s) of service.
113. On 14 September the parties agreed to release a new Band 6 Paramedic
profile. The intention is that this will be published, alongside technical
guidance on how existing paramedic job roles should be reviewed against
it and an agreed timetable for this work. It was also agreed that that the
parties will work together to develop a programme of work to identify how
newly qualified paramedics can be better supported as they enter
employment. This work will include consideration of a preceptorship
programme and if appropriate a national role profile for a newly qualified
paramedic at Band 5 level. It is hoped that this programme of work will
support the recruitment and retention of paramedics, generating
consistency across the different ambulance services and enable a better
focus to be put forward on the health and wellbeing of new entrants.
Realising the benefits of pay reform
114. We asked employers how confident they felt in their ability to realise any
future benefits of pay reform. Given the challenges they currently face with
implementing new medical contracts and ongoing service redesign, some
employers said they were looking for simple to implement reforms with
appropriate support at a national level. Any complex changes that would
place their limited local capacity under greater strain would not be
welcomed at the moment when they are having to address the challenges of
the Sustainability and Transformation Plans.
115. Looking back at the 2013 changes to AfC, some employers had welcomed
the additional local flexibilities supported by a national framework of
37
principles. Other employers said they struggled to make effective use of
these local freedoms due to organisational capacity and capability issues.
116. Another concern employers raised was around the cost benefit of any
proposed reform. An employer fear was that cost neutral reforms have a
tendency of costing some employers more locally than others and that they
felt they ended up being left to deal with the financial fallout from these
locally unfunded reforms, the new junior doctors contract being a case in
point. In addition, any transitional costs associated with moving to a new set
of pay, terms and conditions that has to be funded within a cost neutral
envelop means that any benefits can take longer to be realised.
117. A common theme was the variability in the capacity and/or capability of
organisations to fully make the best of local flexibilities. Effective
performance management remains a challenge in some areas so change
needs to be manageable and straightforward. They felt that the message
needs to focus on improving recruitment and retention rather than making
savings.
118. One contributor said:
“There is flexibility within the current national contracts to support
transformation, reward and retention”
119. The lack of resources meant that they were not confident that this could be
achieved at the current time and that contract reform would not increase the
pace. They concluded; “reforming contracts for new starters rather than
existing staff may be a more realistic aim in the current climate”.
38
3. Workforce supply
Changing landscape
120. Effective workforce planning and recruitment has never been more
important in the health sector. The 5YFV acknowledges that new models of
integrated health and social care cannot be delivered unless we have a
workforce with the right numbers, skills, values and behaviours.
121. STPs are helping to bridge the gap between health and social care, with 44
STP footprints leading the way to bring together local health and care
systems, based on community needs, existing working relationships, patient
flows and other related transformation. This shift to place based care will
call for consistent application of pay across STP footprints, reducing pay
related competition amongst providers.
122. The report by Lord Carter30 on efficiency in the NHS identified a range of
areas where the NHS could make efficiency savings. One of the main areas
identified was in the effective deployment of staff. Trusts have been given
challenging targets to generate savings from more effective deployment and
these are being implemented. This is likely to affect both the level of
demand for staff and the way staff work.
123. NHS Employers continues to work with organisations to support the aims of
the 5YFV including staff health and wellbeing, staff engagement and
reducing the use of agency staff.
30 Productivity in NHS Hospitals https://www.gov.uk/government/publications/productivity-in-nhs-hospitals
39
Apprenticeships
124. The apprenticeships landscape is changing considerably over the next year,
with a levy to be placed on large employers from April 2017. The levy will
be payable by employers at 0.5 per cent of their pay bill and will be
calculated, reported and paid through the PAYE process to HMRC. An
employers’ pay bill will be based on the total amount of earnings subject to
Class 1 secondary national insurance contributions (NICs) and will include
any remuneration, such as wages and pension contributions on which NICs
are paid. Employers will be able to access their funds through a new digital
account system, which will allow them to choose a training provider and pay
for apprenticeship training and assessment. Levy funds will only be able to
be used to pay for apprenticeship training and assessment and it will not be
permissible to use them to cover other associated costs for example,
wages, travel costs, organisational infrastructure).
125. Modelling based on the NHS organisations in scope of the levy has
indicated that the cost to the NHS in 2017/18 to be approximately £200
million. In terms of how this relates to individual NHS organisations, for a
large city-based teaching hospital employing 14,000 staff, their levy
contributions would be in the region of £3.29 million per annum. Whilst
apprenticeship use across the NHS has grown considerably in recent years
(by the end of 2015/16, over 17,000 apprenticeship starts had been
delivered across the NHS), the levy is going to place an additional financial
strain on employers.
126. In addition to the levy, apprenticeships targets are also due to be placed on
public sector bodies with more than 250 employees. Government is
currently consulting on the levels of the targets that will be applied to the
public sector but proposals have indicated a minimum of 2.3 per cent
apprenticeship starts each year, to be calculated based on the headcount of
an organisation. If the targets are to be set at this level, this equates to an
annual target for the NHS of approximately 28,000 apprenticeship starts;
this again clearly demonstrates the need to grow the delivery of
apprenticeships.
127. Whilst apprenticeships have long been a valued model for educating and
training the NHS workforce, the direction and speed at which the new policy
40
is being implemented does pose a number of challenges for the NHS. One
of the key drivers behind the reforms has been a wish to drive up
productivity through the delivery of increased numbers of higher and degree
apprenticeships. Whilst this is a desirable aim, which could help employers
to address some of the skills gaps that exist across their workforce, there
are currently a lack of these apprenticeship standards suitable for delivery in
health. This, combined with a lack of organisational infrastructure to support
a large increase in the delivery of apprenticeships and the outsourcing of a
number of NHS services employing the kinds of support staff that would be
suitable for entry level apprenticeships, mean that the direction of this new
policy will represent a significant challenge for provider organisations.
Specific profession shortages
128. Changes to population demand or policy direction can significantly impact
on an organisations to source the staff they need, impacting on their ability
to provide high quality sustainable care.
129. We know that demand can often alter more quickly than we are able to
make changes to the supply of the workforce. The way in which the NHS
operates often means that it is not possible to respond to workforce gaps
through training more people.
130. The Migration Advisory Committee’s (MAC) shortage occupation list,
published by UK Visas and Immigration (UKVI)31, reflects some of the
supply shortages in the NHS and currently includes the following
occupations:
Nurses
Radiographers
Sonographers
*Medical practitioners in consultant radiography, emergency medicine
and old age psychiatry.
Orthotists
Prosthetists
31 *See full list on the UK Visas and Immigration website.
41
Paramedics
Social workers children’s family services
Healthcare scientists in neurophysiology and radiotherapy physics.
131. The professions noted in the shortage occupations list correlate to Health
Education England’s (HEE) 2016/17 analysis of commissions which
recognises further expansion is warranted in a small number of areas.
132. Recruitment issues faced by NHS organisations in relation to certain
professional groups is a shortage of supply and these problems cannot be
resolved by levels of pay. There is not another available supply of these
professionals in the UK in relation to those who have already trained and
already employed.
NHS Employer’s nursing supply survey
133. In November 2015, NHS Employers carried out a survey of NHS provider
organisations looking at the issue of supply and demand of the profession.
134. The full survey results32 are available on the NHS Employers. The survey
provided an indication that the shortfall of nurses was widespread across
England, with an approximate gap of 21,200 full-time equivalent (FTE)
nurses against employer demand.
135. The information collected from the nursing supply survey informed our
response to the Migration Advisory Committee (MAC) review of nursing on
the shortage occupation list33. The evidence collected demonstrates that
recruitment challenges are as a result of demand for nurses exceeding the
available supply. Recognition of a national shortage of qualified nurses has
since been reflected by the inclusion on the MAC shortage occupation list34
in October 2015.
32 NHS registered nurse supply and demand survey findings. Report to inform the Migration Advisory Committee (MAC) on the partial
review of the shortage occupation list, December 2015
33 The NHS Employers submission to the Migration Advisory Committee (MAC) call for evidence. Partial review of the shortage
occupation list: Nurses.
34 Shortage Occupation List – November 2015
42
136. We found no evidence to suggest that the shortage of qualified nurses is
directly linked to levels of pay, or that using additional pay would help
resolve the recruitment or retention problem. Data available on the use of
recruitment and retention premia35 shows that between April 2014 and April
2016 the percentage of all qualified nursing, midwifery and health visiting
staff receiving a recruitment and retention premium fell from 3.1 per cent to
1.0 per cent. This would indicate that employers have not found the use of
pay premia to be effective in resolving the supply problem.
Inclusion of nursing on the shortage occupation
list
137. There is no other available supply of qualified nurses in the UK beyond
those who have trained and are already employed. There are a number of
measures in place to help bridge the nursing supply gap, including return to
practice programmes, increasing nurse training places and a focus on local
action to retain the workforce. For employers, the only way in which to
increase the overall supply in the immediate term is to use overseas
recruitment.
138. The inclusion of nurses on the shortage occupation recognises that a supply
problem exists and is helping to alleviate some of the previous challenges
trying to recruit trained nurse from overseas. Applications for Restricted
Certificates of Sponsorship (RCoS) are now prioritised by the UKVI points
allocation system36 - increasing the likelihood of nursing applications being
granted.
139. It also provides some certainty for the existing overseas nursing workforce
as the requirement to earn £35,000 or more to qualify for permanent
settlement in the UK (indefinite leave to remain) will not apply to individuals
for whom nursing has appeared on the shortage occupation list at any time
during their employment in a nursing role.
35 ESR warehouse data as at April 2014 and April 2016 for all organisations in England except two who do not use
ESR
36 Immigration Rules: Appendix A, Home Office
43
Nursing associate role
140. Following the outcomes of the Shape of Caring Review37, HEE are taking
forward proposals to develop a new role of nursing associate. The intension
is that the role will sit between health care assistants and the registered
nursing workforce to help provide high quality care to patients. The new
role will also provide a route for healthcare assistants into the registered
nursing workforce.
141. Test sites will be established with 1000 new students starting their training
in January 2017. Work will be taken forward over the next few months to
identify the knowledge, skills and competencies required for the role
develop a national curriculum. It is expected the wider adoption of the role
will be through an apprenticeship model.
142. The intension is that the new role should not be substitute for registered
nurses but instead should allow nurses to spend additional time using their
more specialist training to focus on clinical duties and take more of a lead in
decisions round a patient’s care.
Reform of the student support system
143. From 1 August 2017, new nursing, midwifery and allied health students will
no longer receive NHS bursaries or have their tuition fees paid by HEE.
Instead, they will have access to the same student loans system as other
students. The government believe the reforms will provide:
more nurses, midwives and allied health professionals for the NHS
a better funding system for health students in England
a sustainable model for universities.
144. The government estimates the reforms could lead to an additional 10,000
nursing, midwifery and allied health professional student places available in
37 https://hee.nhs.uk/our-work/developing-our-workforce/nursing/shape-caring-review
44
this parliament.
145. If the reforms are successful they have the potential to substantially
increase the supply of non-medical staff in to the NHS workforce. The
feedback received from employers is that there is anxiety in the system
around the reforms and a fear that they could negatively impact on the
number of applications for pre-registration courses from students.
Employers are also keen to ensure geographical spread of courses around
the country.
146. In order to mitigate the risk of the reforms, employers believe the reforms
should be piloted or phased in so the impact can be evaluated.
Temporary staffing solutions and new NHS
Improvement agency rules
147. NHS Improvement have introduced agency rules to help control the amount
of money NHS trusts spend on temporary staffing. In 2014-15 the NHS
spend on agency staffing was £3.3bn which represented 7.6 per cent of
total staffing costs. The rules include the introduction of price caps, wage
caps, the use of approved frameworks to procure temporary staff and
ceilings on total agency spend for each trust.
148. The rules are designed to encourage healthcare professionals currently
working for agencies to work for the NHS on a substantive basis or on NHS
staff banks. The wage caps ensure that agency staff are paid the same on
an hourly basis as substantive staff and therefore aims to reduce the
financial attraction of working for an agency. As the agency rules are
embedded they have the potential to increase the supply of substantive
workers in to the NHS.
Paramedics – supply and demand issues
149. The ambulance services faces a number of service delivery pressures
which impact directly on the supply and demand for staff. The service is
challenged with meeting an increasing demand coupled with a target driven
approach to service performance management. The service faces a
45
challenge, both to recruit and retain sufficient numbers of competent staff to
enable them to meet the service demands.
150. The increase of the state retirement age impacts upon this service as staff
report that it is challenging to meet the physical and emotional demands of
the role as they get older. Sickness absence levels in the service are higher
than those in the wider NHS38. The average sickness absence rate across
the ambulance service for 2015 was 4.71 per cent, which is higher than the
national average of 4.23 per cent. From February 2015 the average across
the ambulance service was 5.03 per cent which has now risen to 5.90 per
cent in February 2016. West Midlands Ambulance Service, one of the 11
pilot organisations on the healthy workforce programme, and who have
invested in several health and wellbeing initiatives for their staff, had the
lowest sickness absence rate in February 2016, with 3.79 per cent, whereas
the highest rate was 6.88 per cent.
151. The most recent staff survey results unfortunately show a continuing pattern
of worse staff experience on health and well-being in the ambulance
service. In areas such as work pressure, work related stress and bullying
and harassment by colleagues ambulance staff have a poorer work
experience than other staff. For example, 48 per cent of ambulance staff
taking time off as a result of work related stress compared to 37 per cent of
staff as a whole. Ambulance staff are also almost twice as likely to report
pressure to work when unwell from managers (44 per cent of those who
attended work when unwell reported pressure from managers in the
ambulance service as compared with 28 per cent outside of the service). 75
per cent of ambulance staff did feel that their organisation took an active
interest in their health and well-being.
152. In terms of bullying and harassment 30 per cent of ambulance staff reported
bullying and harassment from managers and work colleagues in the
ambulance service compared to 25 per cent outside.
153. The above points to a situation where changes within the workplace which
directly affect staff experience could have a significant impact on the
38 Health and Social Care Information Centre, NHS Sickness Absence Rates
46
retention of ambulance staff.
154. Recommendations of where action could be taken:
focus on activities to support the health and wellbeing of ambulance staff
use STPs and integrated services to look at different roles which the
ambulance staff could move to if they were unable to continue in the
ambulance service (this could help with the working longer challenge)
develop new ways of working which enabled cross organisation work,
rotational roles etc. therefore reducing the amount of time staff are
exposed to the pressures and challenges which are an inherent part of
the service delivery
provide support for line management and leadership in the service to
help address some of the issues around staff engagement, bullying and
harassment and more broadly staff experience. Utilise the work from
Professor Michael West to look at the extent to which the ambulance
service implements the key elements for effective staff engagement and
experience. The Staff Engagement Index for Ambulance staff increased
from 3.20 in 2014 to 3.38 in 2015 but remains well below the average for
the service as a whole -3.78. NHS Employers is supporting employers to
address this.
155. The ambulance service has looked at different pay structures as a means to
improve recruitment and retention and work is currently underway to look at
the AfC pay banding for paramedics. However, the evidence presented
above indicates that greater attention to the factors which affect staff
experience rather than an intervention on pay alone could have a much
more positive effect.
Workforce retention programme
156. We know that reducing turnover and improving retention of staff is a key
priority for the NHS. Using employer feedback NHS Employers has created
the opportunity for NHS workforce leads to attend three facilitated
workshops over next 12 months in which they’ll be given the tools and skills
47
to create a sustainable organisational retention plan39. The programme is
free and is funded through NHS Employers various commercial activities.
We initially planned 45 places on the programme. The demand has far
surpassed this, and NHS Employers will now be providing places for 97
NHS trusts across acute, community, mental health, and ambulance service
trusts.
Improving morale and motivation through staff
health and wellbeing
157. The 2009 Boorman review, described the importance of prioritising staff
health and wellbeing in the NHS. A healthier workforce means less
avoidable days off sick, reduced levels of presenteeism and a more efficient
workforce. The review outlined how to achieve a healthier workforce in 20
recommendations along with key actions. NHS Employers has developed a
timeline40 that provides a summary of what has happened nationally as a
result of the review against each of the recommendations. Organisations
can use the tool to track their own progress made against the
recommendations, allowing them to target their health and wellbeing
activities.
NHS England Healthy Workforce Programme
158. The 5YFV made a commitment to ensure the NHS as an employer sets a
national example in the support it offers its own staff to stay healthy. In
September 2015, Simon Stevens announced further plans to support this
commitment, which included a major drive to improve the health and
wellbeing of NHS staff through the healthy workforce programme. 41 NHS
Employers is working with Dame Carol Black, NHS England, Public Health
England and the Social Partnership Forum along with 11 leading NHS
organisations. A core wellbeing offer for staff is being developed and
39 NHS Employers workforce retention workshops
40 Outcomes from the Boorman Review recommendations
41 Healthy workforce programme
48
robustly evaluated to assist the NHS in developing staff wellbeing
approaches that have a positive and sustainable impact on staff wellbeing.
159. NHS Employers will continue to work closely with NHS England as this
programme develops, leading on line manager training and board/senior
and clinical leadership, supporting the collective organisations, and sharing
key learning and good practice.
Quality and innovation (CQUIN)
160. In March 2016 NHS England announced a health and wellbeing
commissioning for Quality and Innovation (CQUIN) payment
framework. CQUIN enables commissioners to reward excellence, by linking
a proportion of English healthcare providers' income to the achievement of
local quality improvement goals. The framework aims to embed quality
within commissioner-provider discussions and to create a culture of
continuous quality improvement, with stretching goals agreed in contracts
on an annual basis. It makes a proportion of provider income conditional on
the achievement of ambitious quality improvement goals and innovations
agreed between commissioner and provider, with active clinical
engagement.
161. To achieve the CQUIN, trusts are encouraged to take steps, such as
introducing health and wellbeing initiatives, increasing healthy food choices
on premises and encouraging uptake of front line staff receiving the flu
vaccine. NHS Employers has been providing support, guidance and
resources to organisations including presentations and webinars.
49
4. Staff engagement and the
NHS Staff Survey
Staff engagement trends42
162. Levels of staff engagement have improved in 2015 compared to 2014 as
measured by the NHS staff survey. The survey includes an overall indicator
of staff engagement which is measured on a five point scale. In 2015, this
rose from 3.71 to 3.78 and is now at the highest level since the measure
was introduced in 2013. The measure is a composite measure made up of
scores for levels of motivation, involvement and willingness to recommend
the NHS as a place to work.
163. There has also been a notable improvement in the motivation measure
which rose from 3.83 to 3.92. This reflects an improvement in the level of
enthusiasm which staff feel for their job which rose from 69 to 74 per cent.
There was a significant improvement in the percentage of staff that were
willing to recommend the NHS as an employer which rose from 57 to 59 per
cent43.
164. There was also an improvement in the feelings of involvement with the
percentage of staff feeling able to contribute to improvements at work rising
from 68.1 to 69.8 per cent.
165. There were areas where staff remain less satisfied. The NHS scores 3.43
on the measure of the recognition and value of staff by managers and the
42 2015 NHS Staff Survey 2015, Briefing Note: Issues highlighted by the 2015 NHS Staff Survey in England,
http://www.nhsstaffsurveys.com/Caches/Files/20160322_NHS%20Staff%20Survey%202015%20National%20Briefin
g_V2.pdf
43 2015 NHS Staff Survey, National Weighted Data,
http://www.nhsstaffsurveys.com/Caches/Files/20160322%20NHS%20Staff%20Survey%202014-
2015%20Question%20and%20KF%20weighted%20data%20v3.xlsx
50
organisation. Only 31.3 per cent of staff report good communication in their
organisation.
166. There remains considerable variation between trusts in their staff
engagement levels and this needs to be reduced. There was a particular
improvement in the staff engagement levels in some of the more challenged
organisations. Over twenty five trusts increased their staff engagement
levels significantly in 2015 including many which had had historical
challenges.
Action to improve engagement
167. The NHS has a national framework of Staff Pledges which aims to
encourage NHS organisations to develop local engagement approaches.
NHS Employers is commissioned by the DH to assist employers in this field.
Our website shares case studies and other resources with over 25 trusts
highlighted as examples of good practice. In 2015 NHS Employers
identified:
an increase in employers focussing on staff engagement. In particular
most employers adopted new approaches to staff involvement and
communication with many implementing new methods of seeking staff
feedback in addition to the national staff survey. There was also a
growth in back to the floor and open door exercises when senior leaders
have direct communication with staff on wards
a renewed focus on increasing the capacity of line managers to foster
engagement and at least a dozen trusts have developed specific
programmes in this area. NHS Employers developed resources to
support employers to foster line manager’s role in engagement. This
indicator also improved in the staff survey from 3.67 per cent to 3.72.44
there was a growth in schemes which seek to recognise and reward the
contribution of staff. NHS Employers has identified over seventy such
44 2015 NHS Staff Survey 2015, Briefing Note: Issues highlighted by the 2015 NHS Staff Survey in England,
http://www.nhsstaffsurveys.com/Caches/Files/20160322_NHS%20Staff%20Survey%202015%20National%20Briefin
g_V2.pdf
51
schemes. These are mostly in the form of non-monetary awards and are
well received by staff. A small number of organisations have linked
contribution and reward via their performance progression
arrangements.
168. Current pressures on the NHS are a major challenge to sustaining
engagement. It is possible that staff opinion on issues such as pay and
staffing levels could adversely impact on staff engagement over time.
Employers will need to develop their efforts and share ideas and
experiences.
52
5. Pensions and total reward
Total reward
Components of total reward in the NHS
169. The NHS continues to have a well-regarded package of valuable
employment benefits, including a generous pension scheme. In addition to
pay and benefits, we are increasingly seeing that employers in the NHS are
broadening their definition of total reward to include recognition schemes,
health and wellbeing initiatives and training and development programmes,
among others.
170. In 2016, NHS Employers surveyed 100 employers on elements of their
approach to reward strategy. In response to requests for examples of
positive local reward initiatives, there was a variety of responses
demonstrating this wider consideration of what comprises reward. However,
the largest response related to recognition schemes/awards, reflecting an
increasing focus on staff engagement.
171. The broader definition of total reward which considers elements outside of
just pay and benefits is also represented through the NHS Employers total
reward engagement network (TREN). TREN is a network facilitated by NHS
Employers, open to NHS organisations engaged in total reward work, it
gives attendees the opportunity to discuss reward related issues and share
knowledge and experience with colleagues. NHS Employers uses the group
to encourage engagement with the total reward agenda and provides a
route to more closely understand strategic reward in the NHS, and enables
the development of relevant products and tools to support reward initiatives.
172. NHS Employers also commissioned the Institute of Employment Studies
(IES) to undertake an evidence review on the relationship between total
53
reward and staff engagement45. This review indicated that the broader the
definition of total reward that is adopted, the more significant the potential
impact on employee engagement appears to be.
Total reward strategy in the NHS
173. The IES evidence-based review on the relationship between total reward
and employee engagement reinforces that there is no one-size-fits-all
approach to reward. This suggests that reward strategies should be
designed to meet the unique needs of the employer and their staff.
174. The NHS Employers reward strategy survey explored how strategic total
reward was being used in the NHS. Asked if their organisation had a reward
strategy in place, only 15 per cent stated that they did. However, 51 per cent
of those that did not, noted that one was currently in development.
175. Additionally, a significant proportion commented that although they did not
have a specific reward strategy, they had elements of strategic reward in
other workforce strategies, such as the people or organisational
development strategy, health and wellbeing strategy or recruitment and
retention strategy. 30 of the 100 respondents (the largest proportion) stated
that resources not being available in the organisation was the main reason
for not having a reward strategy.
176. A similar split is reflected by members attending the TREN, with some
employers having a reward strategy, some having embedded it in other
strategies and a large proportion currently in the process of developing a
reward strategy.
177. This indicates that strategic total reward as a concept is being applied, but
integrated more fully with other business approaches, particularly as a
response to specific workforce challenges, such as recruitment or retention.
45http://www.nhsemployers.org/case-studies-and-resources/2016/05/total-reward-and-employee-engagement-an-
evidence-based-review-by-the-ies
54
Reward as a response to workforce challenges
178. The nature of strategic reward attempts to meet some form of business goal
or objective. Our reward strategy survey sought to determine how
employers were using reward to meet specific workforce challenges.
179. The largest response of 54 per cent stated that they were using reward to
meet recruitment and retention issues. Remaining responses were spread
over a variety of different priorities such as temporary staffing, staff
engagement, training and development, recognition, productivity and health
and wellbeing.
180. A quarter of respondents stated they were not using reward to meet specific
workforce challenges, which suggests there could be more focus applied to
ensuring reward return on investment.
Local approaches to reward
181. This increasing focus on using reward to meet workforce challenges is
reflected in some of the local reward initiatives being developed. Our reward
survey and interactions through TREN show an increase in low cost or cost
neutral developments such as recruitment refer a friend schemes,
promotion of buying/selling annual leave, negotiated travel reductions,
money advice services and relocation allowances.
182. The largest local reward initiatives appear to remain salary sacrifice
arrangements, where individuals can sacrifice a proportion of their salary
prior to tax and national insurance in order to receive a tax-free benefit. The
most popular of these are childcare voucher schemes, but our engagement
suggests that these are being used for a wider range of goods and services,
including electronic goods and car lease schemes.
183. Whilst such schemes are attractive to employers due to the low cost of
delivering them, there are challenges to the future delivery of these. The
government intends to review the continued tax-free provision of salary
55
sacrifice arrangements, and has recently published a consultation46 on
salary sacrifice and benefits in kind.
184. Salary sacrifice schemes are only attractive if an individual has enough
income to take advantage of them. The introduction of the living wage
earlier this year has restricted access to salary sacrifice schemes for low
earners. Employers are responsible for ensuring that the living/minimum
wage is paid, and if salary sacrifice schemes take a staff members take
home pay below this threshold then employers are liable to top up the
remainder. This has meant some employers restricting access to these
schemes.
185. The introduction of the 2015 NHS Pension Scheme, as a career average
revalued earnings (CARE) scheme, provides a different interaction with
salary sacrifice than final salary schemes. With a CARE scheme, each year
of pension contributions adds to the final pension, so individuals in a salary
sacrifice scheme would be adding less to their pension than they would
otherwise were they not in a salary sacrifice arrangement. This potentially
reduces the perceived value of salary sacrifice arrangements and/or the
NHS Pension Scheme.
Total reward statements
186. Total reward can only contribute to meeting workforce needs if staff are
aware of them and engage with them. Total reward statements (TRS) are
one way in which NHS organisations can promote benefits that they offer
locally, as well as providing valuable information about the value of
pensions through an annual personalised summary of the benefit package.
187. 2015/16 was the second year of rollout of TRS in the NHS. Information from
the NHS Business Services Authority indicates that a total of 198,351 active
NHS Pension Scheme members accessed their statement during the main
rollout (up to 31 December 2015) in England and Wales. This was an
increase of 26 per cent compared to the previous year.
46 https://www.gov.uk/government/consultations/salary-sacrifice-for-the-provision-of-benefits-in-kind
56
188. Surveyed feedback on TRS indicates that 83 per cent of employees claimed
to be aware of TRS, compared to 55 per cent in the first year of rollout. 70
per cent of employees who accessed their statement rated their overall
experience of the TRS website as either ‘very’ or ‘fairly’ good. 88 per cent
thought that the element of their statement relating to their membership of
the NHS Pension Scheme was useful.
NHS Pension Scheme
2015 Pension Scheme
189. The 2015 NHS Pension Scheme was launched on 1 April 2015, replacing
the 1995 and 2008 sections (except where individual protection applied).
The 2015 Scheme is a CARE defined benefits scheme which pays a
pension based on the average of a member’s pensionable earnings
throughout their whole career, revalued in line with the Consumer Price
Index plus 1.5 per cent per annum.
190. Normal pension age (the age at which benefits can be claimed without
reduction for early payment) is now linked to the same age as a member is
entitled to claim their state pension. A build-up rate of 1/54th of each year’s
pensionable earnings applies to the new scheme, which is a higher build-up
rate of both the 1995 and 2008 sections of the NHS Pension Scheme.
191. The flexibilities within the 2008 section of the scheme relating to early or late
retirement factors, draw down of pension on partial retirement and return to
the NHS Pension Scheme are retained in the 2015 scheme. There is a new
provision for early retirement reduction buyout (ERRBO), where members
and/or employer can pay additional contributions through ERRBO to
eliminate or lower the amount of reduction that would apply, limited to a
maximum of three years before the member reaches their normal pension
age.
Contribution rates
192. The employer contribution rate for both the 2015 NHS Pension Scheme and
1995/2008 sections of the scheme are set at 14.3 per cent of pensionable
pay. This rate is determined as part of the funding methodology applied by
the scheme actuaries.
57
193. Members of the NHS Pension Scheme provide contributions on a tiered
basis, to produce a total yield to HM Treasury of 9.8 per cent of total
pensionable pay. The employee contribution rates are outlined in the table
below47.
Tiered contribution rates 2015/16 through to 2018/19 for scheme members
Tier Pensionable pay (whole-time equivalent)/earnings used to assess contribution rate
Contribution rate for scheme years 2015/16 through to scheme year 2018/19
1 Up to £15,431.99 5.0 per cent 2 £15,432.00 to £21,477.99 5.6 per cent 3 £21,478.00 to £26,832.99 7.1 per cent 4 £26,824.00 to £47,845.99 9.3 per cent 5 £47,846.00 to £70,630.99 12.5 per cent 6 £70,631.00 to £111,376.99 13.5 per cent 7 £111,377.00 and over 14.5 per cent
194. The nature of tiered contribution rates means that increases to pensionable
pay, such as through pay awards can mean that a pay rise for pension
scheme members could lead to a reduction in take home pay. For example,
the April 2016 pay rise of 1 per cent affected those at the top point of Band
8A in this way. The 1 per cent pay rise took those staff to a salary of
£48,034 per annum. This caused them to cross into contribution tier 5, from
9.3 per cent to 12.5 per cent. This led to an annual pension contribution rise
from £4,423 per annum to £6,004 per annum.
195. With the introduction of the 2015 NHS Pension Scheme, which is a CARE
scheme, it is expected that future changes to the contribution tiers will
‘flatten’ with a long term aspiration of a single contribution tier for all scheme
members. However, whilst there are still members who have a mixture of
47 http://www.nhsbsa.nhs.uk/Pensions/4207.aspx
58
final salary and CARE scheme benefits there is a requirement to maintain a
tiered approach to balance contributions versus received benefits.
Scheme membership
196. The NHS Pension Scheme accounts 2015/16 provide information on
scheme membership for England and Wales, including those that have
chosen to opt out of the scheme during that year. An extract from the
accounts is below48.
Details of active scheme membership as at 31 March 2016
Active members at 1 April 2015 1,428,050 Adjustment (see note 1) (5,421) Restated active members at 1April 2015 (see note 2) 1,422,629
New entrants 162,458 Deferred members who re-join in the year 55,030 Re-employed pensioners 415 Retirements (32,874) Leavers with deferred pension rights (110,031) Deaths (792) Active members as at 31 March 2016 1,467,102
48 Source: NHS Pension Scheme Annual Accounts 2015-16
http://www.nhsbsa.nhs.uk/Documents/Pensions/56324_NHS_Pension_Scheme_HC_370_Web_only_(2015-
16_accounts).pdf
Note 1. Member records are updated retrospectively after the year end, after the membership statistics are prepared for the scheme
accounts. This is due to the volume of data required to be uploaded onto the pension administration systems from employers, and
the resolution of any subsequent data errors. An adjustment will be required each year to show a revised opening position to
reconcile to the movements and closing position for the year.
Note 2. The membership data at 31 March 2015 differs from that disclosed in the Report of the Actuary as the data extract provided
to GAD was taken in November 2015, whereas these statistics were taken from a data extract provided in May 2016 and member
data is continually updated after the year end.
59
Pension taxation
197. Any NHS employee who has pension benefits above tax thresholds may be
liable to a tax charge. This has the potential to impact the perception of the
NHS pension as a benefit and to impact workforce behaviour.
198. The two thresholds are annual allowance and lifetime allowance. It used to
be the case that few NHS workers were likely to exceed the tax thresholds,
but changes in recent years mean that more staff are likely to be impacted.
199. Annual allowance is the amount of ‘pension savings’ an individual can make
in one year before receiving a tax charge. The annual allowance limit is
currently £40,000 in 2016/17, the same as in 2014/15, reduced from
£50,000 in 2013/14.
200. In April 2016 the tapered annual allowance was introduced. This cuts
pension tax relief for high earners by introducing a tapered annual
allowance of those with adjusted incomes of over £150,000. The rate of
reduction in the annual allowance (from the current maximum of £40,000) is
by £1 for every £2 that the adjusted income exceeds £150,000, up to a
maximum reduction of £30,000 at £210,000 For example at £210,000 the
annual allowance is only £10,000.
201. Lifetime allowance reduced to £1 million, down from £1.25 million in April
2016. The lifetime allowance is the total amount that an individual can have
in their pension savings, during their lifetime, without incurring a tax charge.
202. Defined benefit pension is tested against the lifetime allowance using the
amount of pension and lump sum if relevant. Defined benefit pensions are
multiplied by a factor of 20 and any retirement lump sum is added to the
result.
203. With 46 per cent of the NHS workforce aged 45 or above49 there are a
significant number of staff who are at an age where they are considering
their retirement options. Anecdotally there is a perception that the change in
49 Source Health and Social Care Information Centre, September 2015 provisional statistics
60
public service pensions has led to a less desirable pension scheme, and
this change to pension taxation, among others changes such as prolonged
pay restraint; years of increased pension contribution increases, and
changes to state pension leading to increased National Insurance (NI)
contributions may lead people down the path of some form of retirement or
flexible retirement. This will potentially have an impact on supply and
demand, and associated factors such as staff experience and agency/locum
spend.
204. As high earners contribute more through their higher rate of employee
contributions, if a significant number of high earners opt out of the scheme,
this will have an impact on the average overall yield that is received. The
NHS Pension Scheme is required to deliver an average yield of 9.8 per
cent. When the NHS Pension Scheme valuation exercise is undertaken
(using data from 2016 and taking effect from 2019) this could mean an
increase in employee contribution rates at all levels, including lower bands
(which could potentially impact on the behaviour of other members and
increase the general level of opt out). This has the potential to undermine
the integrity of the scheme should such opt outs continue in significant
numbers.
Changes to state pension
205. On 6 April 2016, the state pension was replaced with a new one for those
that reach state pension age on or after that date. The new state pension
replaced the previous basic and additional state pension. Employees who
contributed to a contracted-out occupational pension scheme, such as the
NHS Pension Scheme, did not receive the additional state pension and paid
a lower rate of NI contributions, along with their employers.
206. The introduction of the new state pension meant the end of contracting-out
and ended the reduction in NI that contracted-out employers and employees
paid. Employers no longer receive the 3.4 per cent NI rebate and now pay
the standard rate of 13.8 per cent of all earnings above the secondary
threshold for all employees. The 1.4 per cent NI rebate for employees also
ended.
207. The removal of the rebate for employees has been another cost pressure
for members of the NHS Pension Scheme and contributes to impact on take
61
home pay. Although not directly related to the NHS Pension Scheme,
individual members may perceive this as a further erosion in the value of the
scheme, particularly following previous years of contribution rises and
change to the 2015 CARE Scheme.
62
6. Staff numbers and paybill 208. Analysis of published NHS statistics provides evidence of the recruitment,
retention and pay bill cost trends that employers are reporting. In addition to
the published statistics, NHS Employers has also undertaken its own
analysis of workforce and payroll data to identify trends not evident in the
published information.
209. Against each of the areas of interest below, more detailed data tables have
been provided in the annexes.
Staff numbers
210. The non-medical workforce grew by 16,697 FTE50,51 or 1.8 percent between
September 2014 and September 2015. This is reflective of employers
increasing capacity to meet increasing demand on the service. Growth was
consistent across all staff groups, with the exception of hotel, property and
estates.
211. The new healthcare workforce statistics includes the inclusion of grade and
AfC band for the first time, as shown in Annex G1. In the longer term this
will help identify shifts in the grade mix by staff group. Figure 1 below shows
the profile of full-time equivalent staff by staff group within each band. This
illustrates how the NHS workforce is spread across the levels of the pay
50 NHS Digital, Healthcare workforce statistics September 2015, http://www.digital.nhs.uk/catalogue/PUB20337/nhs-
staf-sept-2015-summ.xlsx
51 There is an apparent discrepancy between the % change in staff numbers (FTE) between September 2014 and
September 2015 detailed in the NHS Digital figures the 2015/16 Average FTE Growth detailed in Annex D (paybill
metrics). This is because the percentage change detailed in Annex F based on the difference between September
2014 and September 2015, whereas the difference in the DH metrics reflects the difference between the 12-month
averages for the years ending in March 2016. The difference occurs because there is seasonal variation in workforce
numbers. The DH metric figure is used to explain and describe movements in annual paybill costs. In this context,
average workforce levels over the year rather than a snapshot at a particular month are relevant. In addition, the
NHS Digital staff numbers are based on slightly different coverage and staff groupings.
63
scale. This is reflective of employers increasing their capacity to meet
increasing demand on the service.
Figure 1 Distribution of non-medical staff by band and staff group
212. The ability to grow the workforce is indicative that at system wide level, the
labour market is sufficiently buoyant to sustain both the replacement of staff
who leave and retire from the NHS, and increase overall workforce capacity.
Annex F provides further detail of workforce growth. Workforce growth at a
staff group level hides the presence of hard to fill roles in some professions
and localities.
64
Vacancies
213. NHS Employers welcome the new NHS Digital publication52 which details
an analysis of vacancies advertised on NHS Jobs. In the longer term this
will assist in providing quantified evidence of the localised recruitment
difficulties that employers inform us of. The new publication also details
numbers of web hits, applications, shortlistings and total appointed. This will
hopefully provide not only an assessment of vacancies, but also the number
and quality of applications.
214. As this publication is in its first year, it is marked as experimental. We are
cautious of over-interpreting this initial publication, because we are aware of
inconsistencies in the way the data is recorded between staff groups and
areas. Once a longer term time series of vacancies data is available, it will
be possible to make an assessment of whether the recruitment position is
easing or becoming more difficult.
215. The table in Annex I shows the numbers of advertised vacancy FTE and
accompanying information during February 2015 to March 2016 by staff
group.
52NHS Digital, NHS Vacancies Statistics England 2015, Provisional, Experimental statistics,
http://digital.nhs.uk/catalogue/PUB20132
65
Turnover
216. Figure 2 shows that the number of joiners continues to exceed the number
of leavers, which is consistent with the workforce growth reported. Whilst
the number of leavers is increasing slightly, this has been offset by greater
increases in joiners.53
Figure 2 Non-medical joiners and leavers rates, NHS trusts and CCGs
March 2010 - March 2011
March 2011 - March 2012
March 2012 - March
2013
March 2013 March - 2014
March 2014 - March 2015
March 2015 - March 2016
Non-medical leavers
9.9% 11.4% 10.3% 11.7% 10.7% 10.9%
Non - medical joiners
8.8% 8.3% 9.7% 11.7% 12.0% 12.7%
53 Department of Health Estimates
66
Recruitment and retention premia
217. As shown in Figure 3, the percentage of staff in receipt of recruitment and
retention premia (RRPs) continues to fall, with only 0.8 per cent of non-
medical staff (full-time equivalents) receiving RRPs in April 2016. The full
detail of the percentages of staff in receipt of RRPs by staff group and AfC
band/region can be found in annexes C and C1 respectively.
Figure 3 - Time series of non-medical staff in receipt of RRPs (full-time
equivalents)54
54 NHS Employer Estimates
67
Pay bill metrics
218. The Department of Health (DH) pay bill metrics show that the pay bill for
hospital and community health services (HCHS) non-medical staff grew by
2.3 per cent in 2014/15, while the size of this workforce increased by 2.0
percent. This means there has been a slight (0.3 per cent) increase in the
paybill per full-time equivalent (FTE) growth (the cost per unit of staff). The
increase in staff costs adds pressure on NHS finances.
219. Annex D, from the DH Headline HCHS pay bill metrics, details the
contribution of changes to each of the pay elements to the change in pay bill
per FTE.
220. Incremental progression is one of the pay pressures which contribute to
increased staff costs. Figure 4 shows that 46 per cent of AfC staff will be
entitled to a pay increment in 2016/17 worth on average 3.4 per cent, even
without an increase in the national pay scales. Pay increments are paid in
addition to any annual award.
221. The impact of pay progression is not fully evident in the pay bill per FTE
metric as this cost is offset by other negative pay pressures such as
turnover. Should turnover decrease from current levels, the full costs of
incremental progression will become more apparent.
222. Annex B details the average basic pay increase, per FTE, by pay band and
staff group. This adds a pay pressure of around one per cent to the AfC pay
bill. Annex J below details the incremental pay rises, which staff on each
point can expect to receive over the next 12 months (expressed as £s and
also as a percentage increase to the previous year’s basic pay).
223. Figure 4 shows the percentage of staff on top of their pay band. The
proportion at the top of band 1 is due to the band 2 containing just two
points.
224. Figure 5 shows that the percentage of staff at the top of their band in April
2016 (46 per cent) has decreased slightly from the same figure in 2015 (48
per cent.) Whilst staff reaching the top of their band reduces the rate at
which the basic pay bill increases, it does not contribute to a reduction in
68
pay bill pressure unless staff leave and are replaced by staff lower down the
band.
Figure 4 – Percentage of staff on top of their pay band
AfC Band
Total HCHS non-medical staff
Band 1 81%
Band 2 46%
Band 3 50%
Band 4 50%
Band 5 42%
Band 6 40%
Band 7 48%
Band 8a 46%
Band 8b 47%
Band 8c 45%
Band 8d 46%
Band 9 41%
Grand Total 46%
225. Full details of the proportion of staff at the top of each band, by staff group,
can be found in Annex E
69
Figure 5. Percentage of staff on the top point of their band2010 2011 2012
2013 2014 2015
2010 2011 2012 2013 2014 2015 2016
35 40 45 47 49 48 46
226. Annex J details the incremental pay rises that staff on each point can expect
to receive over the 12 months from April 2016 (expressed as £s and also as
a percentage increase to the previous year’s basic pay).
70
ANNEXES
Annex A. Results from NHS Provider/NHS Employers
Workforce Survey
What would you do if you were free to decide how to apply a 1 per cent pay
awarding 2017/18 (total respondents = 51)
(The chart reflect the sum of rank values - Highest ranked option = 5, 2nd ranked = 4, … , Lowest
Ranked = 1, Not ranked = 0)
71
72
For remaining remit groups would you prefer the current approach of single
year or a multi-year pay approach? (Total respondents = 51)?
How would you target an annual 1 per cent to support transition to a
reformed AfC contract? (Total respondents = 48)
73
Does AfC reform remain a priority for you? (Total respondents = 48)
Do you have issues with recruitment and retention of staff? (Total
respondents = 50)
74
Please select up to 3 options which reflect your organisations most
significant challenges (total respondents = 50)
What has happened to your organisations overall agency/locum spend
since the introduction of the price caps? (Total respondents = 47)
75
Annex B. Expected basic pay per FTE increase in
2016/17 though increments by AfC band
Band
Average increment
% of basic pay
Band 1 50.91 0.3%
Band 2 205.93 1.2%
Band 3 241.28 1.3%
Band 4 270.70 1.3%
Band 5 496.38 1.9%
Band 6 654.08 2.1%
Band 7 650.22 1.7%
Band 8a 876.53 1.9%
Band 8b 1200.59 2.2%
Band 8c 1400.38 2.2%
Band 8d 1729.52 2.3%
Band 9 2465.43 2.7%
Total HCHS non-medical staff 477.06 1.8%
76
Annex B1. Expected basic pay per FTE increase in
2016/17 though increments by staff group
Staff Group
Average increment % of basic pay
Qualified nursing, midwifery and health visiting staff 562.54 1.8%
Qualified scientific, therapeutic and technical staff 646.05 1.9%
Qualified ambulance staff 559.46 2.0%
Support to clinical staff
Support to ambulance staff 311.85 1.5%
Support to doctors & nursing staff
242.51 1.3%
Support to scientific, therapeutic and technical staff
320.53 1.6%
NHS Infrastructure Support
Central functions 534.82 2.0%
Hotel, property & estates 175.28 0.9%
Senior managers 1545.24 2.4%
Managers 1114.89 2.3%
Total HCHS non-medical staff 477.06 1.8%
Sources
ESR Data Warehouse; Pay Bill Data Extract, 2016
NHS Workforce Statistics - May 2016, Provisional statistics: National and HEE Tables [.xlsx],
http://www.digital.nhs.uk/catalogue/PUB21381/nhs-work-stat-may-2016-nat-hee-tab.xlsx;
NHS Workforce Statistics - April 2016, Provisional statistics: HCHS staff in NHS Support
Organisations and Central Bodies in England, March 2016 [.xlsx],
http://digital.nhs.uk/catalogue/PUB21066/nhs-work-stat-mar-2016-quart-sup-org-tab.xlsx.
77
Notes to Annexes B and B1
Estimates derived from NHS Employers analysis of ESR data warehouse data as at April 2016,
for all organisations in England except two organisations who do not use ESR.
Data cleaning processes are applied to the ESR extracts before use
Staff with an invalid staff group, other staff groups, or with an incorrectly recorded point or band
have been excluded from the analysis
Approximations have been made to match the staff groups used in previous submissions to the
NHS Review Body and those now used in NHS Digital workforce publications following the
consultation carried out on workforce census.
78
Annex C. Proportion of staff receiving recruitment and retention premia (RRP) (either
general or long term) by staff group and AfC band – April 2016
Band Total HCHS
non-medical staff
Qualified nursing,
midwifery and health visiting
staff
Qualified scientific,
therapeutic and technical staff
Qualified ambulance
staff
Support to clinical staff
Support to ambulance
staff
Support to doctors &
nursing staff
Support to scientific,
therapeutic and technical
staff
Band 1 0.0% 0.0% 0.0% 0.0%
Band 2 0.1% 0.0% 0.4% 0.0% 0.1% 0.0%
Band 3 0.6% 0.0% 0.2% 0.0% 0.8% 0.2%
Band 4 1.4% 0.0% 0.6% 0.0% 1.9% 0.7% 0.4%
Band 5 0.8% 0.8% 0.5% 0.0% 0.2% 0.5% 1.2%
Band 6 1.0% 1.2% 0.9% 0.2% 0.4% 0.4% 0.4%
Band 7 1.2% 1.2% 1.6% 6.4% 0.0% 0.5% 0.0%
Band 8a 1.0% 1.3% 1.1% 0.0% 0.7% 1.4%
Band 8b 0.9% 1.0% 0.8% 2.7% 0.0% 0.0%
Band 8c 1.6% 1.4% 0.8% 0.0% 0.0% 0.0%
Band 8d 1.8% 1.1% 0.9% 0.0% 0.0% 0.0%
Band 9 3.2% 0.0% 1.4%
Grand Total 0.8% 1.0% 1.0% 0.4% 0.4% 0.5% 0.3%
79
Annex C (continued)
Band
Total HCHS non-
medical staff
NHS Infrastructure Support
Central functions
Hotel, property and
estates
Senior managers
Managers
Band 1 0.0% 0.0% 0.0%
Band 2 0.1% 0.1% 0.2% 0.0% 0.0%
Band 3 0.6% 0.3% 1.1% 0.0%
Band 4 1.4% 0.4% 15.9% 0.0%
Band 5 0.8% 0.5% 13.0% 0.0% 0.5%
Band 6 1.0% 0.8% 5.4% 0.0% 0.5%
Band 7 1.2% 0.5% 2.5% 0.0% 0.6%
Band 8a 1.0% 0.8% 6.6% 0.2% 0.8%
Band 8b 0.9% 1.1% 0.0% 0.4% 1.0%
Band 8c 1.6% 2.8% 1.4% 2.3%
Band 8d 1.8% 2.9% 1.8% 2.4%
Band 9 3.2% 4.2% 2.9% 5.2%
Grand Total 0.8% 0.5% 2.5% 1.2% 1.1%
80
Annex C1. Proportion of staff receiving recruitment and retention premia (RRP) (either
general or long term) by staff group and LETB region – April 2016
Region/ LETB Region
Total HCHS non-medical
staff
Qualified nursing,
midwifery and health
visiting staff
Qualified scientific,
therapeutic and technical
staff
Qualified ambulance
staff
Support to clinical staff
Support to ambulance
staff
Support to doctors &
nursing staff
Support to scientific,
therapeutic and technical
staff
Nort
h North East 0.1% 0.0% 0.2% 0.0% 0.0% 0.2% 0.0%
North West 0.4% 0.2% 0.7% 0.1% 2.9% 0.2% 0.1%
Yorkshire and Humber 0.2% 0.2% 0.3% 0.1% 0.0% 0.1% 0.1%
Mid
lands
and E
ast
East Midlands 0.3% 0.3% 0.4% 0.0% 0.0% 0.2% 0.2%
West Midlands 0.5% 0.4% 0.4% 0.0% 0.0% 0.2% 0.9%
East of England 2.4% 4.4% 3.0% 0.0% 0.6% 0.6% 0.3%
Lond
on
North Central and East London 0.8% 0.8% 1.1% 0.0% 0.2% 0.4%
North West London 0.8% 0.4% 0.4% 2.3% 0.0% 0.5% 0.1%
South London 0.9% 0.9% 1.1% 0.0% 0.7% 0.6%
South
Kent Surrey and Sussex 1.4% 1.5% 2.4% 0.0% 0.0% 0.8% 0.2%
Thames Valley 1.7% 2.6% 1.7% 0.0% 0.2% 0.9% 0.0%
Wessex 1.6% 3.1% 1.1% 0.0% 0.0% 0.1% 0.7%
South West 0.3% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0%
Special Health Authorities 2.5% 3.5% 0.3% 19.0% 0.1%
Grand Total 0.8% 1.0% 1.0% 0.4% 0.4% 0.5% 0.3%
81
Annex C1 (continued)
Region/ LETB Region
Total HCHS non-medical
staff
NHS Infrastructure Support
Central functions
Hotel, property
and estates
Senior managers
Managers
Nort
h North East 0.1% 0.0% 0.8% 0.3% 0.0%
North West 0.4% 0.3% 1.9% 0.1% 0.2%
Yorkshire and Humber 0.2% 0.1% 0.5% 1.7% 0.5%
Mid
lands
and E
ast
East Midlands 0.3% 0.1% 1.0% 0.5% 0.4%
West Midlands 0.5% 0.4% 2.0% 0.8% 0.4%
East of England 2.4% 0.7% 4.7% 2.2% 1.4%
Lond
on
North Central and East London 0.8% 1.0% 6.6% 1.3% 0.7%
North West London 0.8% 0.6% 11.9% 1.1% 0.5%
South London 0.9% 1.5% 0.5% 0.9% 1.8%
South
Kent Surrey and Sussex 1.4% 0.7% 3.5% 1.6% 1.0%
Thames Valley 1.7% 1.2% 4.4% 1.7% 2.6%
Wessex 1.6% 0.1% 4.6% 0.9% 0.7%
South West 0.3% 0.3% 3.1% 1.0% 0.3%
Special Health Authorities 2.5% 0.5% 2.5% 3.0% 3.1%
Grand Total 0.8% 0.5% 2.5% 1.2% 1.1%
82
Annex D. Paybill metrics for Total HCHS non-medical staff55
Paybill metric/change versus previous year
2009/10 2010/11 2011/12 2012/1
3 2013/14 2014/15 2015/16
Headline Pay Award 2.40% 2.20% 0.30% 0.30% 1.00% 0.40% 0.50%
Basic Pay per FTE Drift 1.00% 1.10% 0.80% 0.50% -0.50% -0.30% -0.20%
Staff Group Mix Impact 0.10% -0.20% -0.10% 0.00% -0.20% -0.10% -0.10%
Excluding Staff Group Mix Impact 1.00% 1.40% 1.00% 0.50% -0.30% -0.20% -0.10%
Basic Earnings per FTE Growth 3.40% 3.40% 1.20% 0.80% 0.50% -0.30% 0.80%
Additional Earnings per FTE Drift Impact
-0.50% -0.50% 0.00% 0.10% -0.50% -0.10% -0.10%
Staff Group Mix Impact -0.10% 0.00% 0.10% 0.00% 0.00% 0.00% 0.00%
Excluding Staff Group Mix Impact -0.40% -0.50% 0.00% 0.10% -0.60% -0.10% -0.10%
Additional Earnings per FTE Growth
-0.80% -0.50% 1.40% 1.80% -3.90% 2.50% -4.10%
55 Department of Health, HCHS Paybill Metrics and Paybill driver quantifications, August 2016
83
Annex D (continued)
Paybill metric/change versus previous year
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16
Total Earnings per FTE Drift 0.50% 0.70% 0.90% 0.60% -1.00% -0.40% -0.20%
Staff Group Mix Impact 0.00% -0.20% -0.10% 0.00% -0.20% -0.20% -0.10%
Excluding Staff Group Mix Impact 0.50% 0.90% 0.90% 0.60% -0.80% -0.30% -0.10%
Earnings per FTE Growth 2.90% 2.90% 1.20% 0.90% 0.00% 0.00% 0.20%
Pensions Contributions Drift Impact 0.00% 0.00% 0.00% -0.10% 0.30% -0.10% 0.20%
National Insurance Contributions Drift Impact
0.00% 0.10% 0.10% 0.00% -0.10% -0.10% -0.10%
Total On-Costs per FTE Drift Impact
0.00% 0.10% 0.10% -0.10% 0.20% -0.20% 0.10%
Staff Group Mix Impact 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Excluding Staff Group Mix Impact 0.00% 0.10% 0.10% -0.10% 0.20% -0.20% 0.10%
Employer On-Costs per FTE Growth 2.70% 3.50% 1.70% 0.60% 1.20% -0.90% 0.80%
Paybill per FTE Drift 0.50% 0.70% 0.90% 0.60% -0.80% -0.60% -0.20%
Staff Group Mix Impact 0.00% -0.20% -0.10% 0.00% -0.20% -0.20% -0.10%
Excluding Staff Group Mix Impact 0.50% 1.00% 1.00% 0.60% -0.60% -0.40% -0.10%
Paybill per FTE Growth 2.90% 3.00% 1.30% 0.90% 0.20% -0.10% 0.30%
Average FTE Growth 4.60% 0.80% -1.90% -0.40% 0.60% 2.00% 2.00%
Aggregate Paybill Growth 7.60% 3.80% -0.70% 0.40% 0.80% 1.90% 2.30%
84
Notes to Annex D
Derived from DH's Estimated Headline HCHS Paybill Metrics (see separate notes on the construction of this data set).
Headline Pay Award reflects the impact of, usually, annual central pay awards which are typically headline uplift applied to pay scales. If uplifts differ
across staff groups, it reflects a weighted
average.
Basic Pay per FTE Drift gives the growth in basic pay per FTE after allowing for the impact of the Basic Pay Settlement. This captures the effects of pay
progression & increment mix, pay band mix and staff group mix.
Employer On-Cost per FTE Drift Impact gives the combined effect of the National Insurance and Pensions Contribution per FTE Drift Impacts. It reflects
the impact of changing on-cost patterns on Paybill per FTE Growth.
Paybill per FTE Drift gives the growth in Paybill per FTE after allowing for the impact of the Basic Pay Settlement. This captures the effects of changes in
workforce mix, additional earnings patterns and on-cost patterns.
The driver quantifications excluding the Staff Group Mix Impact show the residual impact of the driver after allowing for changes in the mix of staff across
the broad staff groups used in HSCIC
publications.
Average FTE Growth compares the average numbers of FTEs over the period, assessed using monthly snapshots, to the average numbers of FTEs over
the equivalent period the previous
year.
85
Annex E. Percentage of AfC staff on top of their bands
Band Total HCHS
non-medical staff
Qualified nursing,
midwifery and health visiting
staff
Qualified scientific,
therapeutic and technical
staff
Qualified ambulance
staff
Support to clinical staff
Support to ambulance
staff
Support to doctors and
nursing staff
Support to scientific,
therapeutic and technical
staff
Band 1 81% 95% 69% 65%
Band 2 46% 71% 36% 37% 45% 45%
Band 3 50% 82% 46% 43% 53% 47%
Band 4 50% 7% 45% 40% 26% 58% 45%
Band 5 42% 46% 25% 42% 73% 34% 36%
Band 6 40% 43% 38% 29% 38% 34% 14%
Band 7 48% 51% 49% 48% 45% 34% 41%
Band 8a 46% 46% 54% 52% 35% 44%
Band 8b 47% 47% 62% 34% 45% 50%
Band 8c 45% 38% 63% 38% 39% 52%
Band 8d 46% 29% 72% 30% 30% 52%
Band 9 41% 22% 66%
Grand Total 46% 46% 42% 39% 42% 49% 43%
86
Band Total HCHS
non-medical staff
NHS Infrastructure Support
Central functions
Hotel, property and estates
Senior managers
Managers
Band 1 81% 60% 84%
Band 2 46% 45% 59% 76% 21%
Band 3 50% 41% 58% 43%
Band 4 50% 43% 60% 37%
Band 5 42% 36% 48% 28% 33%
Band 6 40% 32% 42% 38% 30%
Band 7 48% 33% 47% 26% 36%
Band 8a 46% 33% 49% 38% 40%
Band 8b 47% 31% 42% 41% 42%
Band 8c 45% 30% 42% 39%
Band 8d 46% 39% 43% 36%
Band 9 41% 41% 39% 36%
Grand Total 46% 38% 67% 41% 38%
87
Notes to Annex E
Sources
ESR Data Warehouse;
NHS Workforce Statistics - May 2016, Provisional statistics: National and HEE Tables [.xlsx], http://www.digital.nhs.uk/catalogue/PUB21381/nhs-work-
stat-may-2016-nat-hee-tab.xlsx;
NHS Workforce Statistics - April 2016, Provisional statistics: HCHS staff in NHS Support Organisations and Central Bodies in England, March 2016
[.xlsx], http://digital.nhs.uk/catalogue/PUB21066/nhs-work-stat-mar-2016-quart-sup-org-tab.xlsx. to Annex E
Estimates derived from NHS Employers analysis of ESR data warehouse data as at April 2016, for all organisations in England except two organisations
who do not use ESR.
Data cleaning processes are applied to the ESR extracts before use
Staff with an invalid staff group, other staff groups, or with an incorrectly recorded point or band have been excluded from the analysis
Approximations have been made to match the staff groups used in previous submissions to the NHS Review Body and those now used in NHS Digital
workforce publications following the consultation carried out on workforce census.
88
Annex F. Time series of non-medical staff by staff group
Non-Medical Staff Groups (includes non-
AfC staff)
All Non-
Medical
staff
Nurses,
midwives
and health
visitors
Nurses and
health
visitors
Midwives
Scientific,
therapeutic and
technical staff
Ambulance staff
FTE
2009 923,401 299,075 280,114 18,960 121,241 16,987
2010 931,859 300,971 281,483 19,488 124,090 17,441
2011 910,108 298,315 278,437 19,879 124,864 17,596
2012 891,126 292,902 272,686 20,216 123,529 17,514
2013 902,791 296,673 276,137 20,537 126,129 17,537
2014 920,846 301,237 280,399 20,838 127,680 17,437
2015 937,543 303,746 282,813 20,934 129,653 17,880
Change from 2014
Number 16,697 2,509 2,413 96 1,973 443
% 1.80% 0.80% 0.90% 0.50% 1.50% 2.50%
89
Annex F (continued)
Non-Medical Staff Groups (includes non-
AfC staff)
All Non-Medical
staff
Support to
clinical staff
Support to …
NHS Infra-
structure Support
Cen
tral fu
nctio
ns
Ho
tel, p
rop
erty
an
d
esta
tes
Sen
ior m
an
ag
ers
Man
ag
ers
am
bu
lance s
taff
docto
rs, n
urs
es
and m
idw
ives
scie
ntific
,
thera
peutic
an
d
technic
al s
taff
Other HCHS staff or those
with unknown classification
FTE
2009 923,401 286,746 12,926 224,129 49,691 199,352 100,079 57,468 12,516 29,290 4,322
2010 931,859 290,883 13,290 226,185 51,408 198,475 101,809 57,312 11,715 27,640 3,734
2011 910,108 282,894 12,807 219,444 50,644 186,440 94,875 55,542 10,685 25,337 3,756
2012 891,126 276,360 12,107 215,026 49,227 180,821 92,014 54,106 10,342 24,360 3,610
2013 902,791 282,486 12,714 219,965 49,807 179,966 91,657 53,915 9,984 24,410 3,612
2014 920,846 292,927 13,406 226,913 52,608 181,564 94,072 52,555 10,468 24,469 4,007
2015 937,543 302,630 14,611 233,918 54,101 183,633 95,884 52,146 10,584 25,020 4,091
Change from 2014
Number 16,697 9,704 1,205 7,006 1,493 2,069 1,811 -409 115 551 84
% 1.80% 3.30% 9.00% 3.10% 2.80% 1.10% 1.90% -0.80% 1.10% 2.30% 2.10%
90
Notes to Annexes F and G
Following the recent consultation by NHS Digital into the publication of NHS workforce statistics in England56, a number of developments have been implemented to the way non-medical staff are counted in time for the annual publication of staff numbers. Because of these changes, these statistics are currently classed as experimental. Key developments are:
Only paid staff are counted.
A new category for Very Senior Managers has been defined.
Inclusion of nurses undertaking additional training in the nurse statistics.
Staff with mismatched AfC bands and occupation codes (staff groups) have been re-categorised according to their job role.
Staff groups have been redefined.
Headcount and FTE staff numbers for support organisations and central bodies considered to be outside the NHS, such as Health Education England, National Institute for Health and Care Excellence, NHS Blood and Transplant and NHS England, are published separately to those of NHS CCGs and trusts.
Because of these and other changes, the staff number publications are no longer equivalent to the annual workforce censuses used in previous submissions to the Review Body. In addition, as headcount for support organisations and central bodies is published separately to that of NHS CCGs and trusts, we have not included aggregate headcount in the table in Annex F due to the small risk of double counting those staff with assignments at both types of organisations. We have also not included staff from organisations in the independent sector, as most of these staff will be on different terms and conditions.
56 NHS Digital, Outcomes from the NHS Hospital and Community Health Service in England workforce statistics proposed developments consultation,
http://www.digital.nhs.uk/media/20076/Outcomes-from-the-NHS-HCHS-in-England-workforce-statistics-
consultation/doc/Outcomes_from_the_NHS_HCHS_in_England_workforce_statistics_consultation.docx
91
Annex G1. Non-medical staff by staff group and AfC band, September 2015
AfC Band/Grade Nurses, midwives
and health visitors Nurses and
health visitors Midwives
Ambulance staff
Scientific, therapeutic and technical staff
Band 1 7.00 7.00 0.00 0.00 0.00
Band 2 8.00 8.00 0.00 0.00 7.89
Band 3 4.50 4.50 0.00 0.00 57.44
Band 4 273.61 270.69 2.92 2694.57 5193.55
Band 5 141028.02 138885.91 2142.10 9861.54 28209.38
Band 6 96949.95 82571.09 14378.86 4265.55 42377.68
Band 7 49520.13 45449.35 4070.78 857.14 32119.01
Band 8a 10008.77 9839.72 169.05 128.50 12545.55
Band 8b 2549.96 2517.36 32.60 36.43 4406.23
Band 8c 1021.94 1004.94 17.00 17.60 2158.32
Band 8d 269.04 269.04 0.00 11.00 950.31
Band 9 83.67 83.67 0.00 0.00 278.13
AfC (Total) 301724.59 280911.27 20813.32 17872.33 128303.49
Very Senior Manager
0.00 0.00 0.00 0.00 0.00
Unknown Grade 2021.90 1901.30 120.60 8.01 1349.57
Grand Total 303746.49 282812.57 20933.92 17880.34 129653.06
92
Annex G2. Non-medical staff by region and AfC band, September 2015
AfC Band/Grade North Midlands and East South London
Special Health
Authorities and other
statutory bodies
Grand Total
Band 1 10,215.76 6,590.06 6,762.61 1,300.56 1,165.90 26,034.90
Band 2 52,585.66 43,343.08 36,028.31 15,543.52 1,449.27 148,949.84
Band 3 42,408.52 31,121.48 28,331.35 17,493.92 3,063.41 122,418.69
Band 4 24,975.17 22,457.56 17,887.08 13,928.58 2,898.12 82,146.51
Band 5 69,626.78 56,340.50 47,849.08 33,413.76 3,260.31 210,490.43
Band 6 50,598.93 45,891.29 38,120.72 29,087.69 4,028.06 167,726.68
Band 7 30,066.13 25,095.20 21,521.74 20,570.85 4,469.23 101,723.16
Band 8a 9,815.39 8,237.90 6,802.28 7,638.70 3,190.86 35,685.13
Band 8b 3,727.98 3,447.17 2,940.91 3,161.55 2,092.06 15,369.66
Band 8c 1,873.50 1,771.27 1,570.58 1,819.56 1,419.84 8,454.75
Band 8d 922.85 970.80 740.93 865.55 967.52 4,467.65
Band 9 271.14 300.59 251.06 386.08 495.32 1,704.19
AfC (Total) 297,087.82 245,566.92 208,806.65 145,210.32 28,499.90 925,171.61
Very Senior
Manager
530.89 491.95 396.42 331.75 358.88 2,109.90
Unknown Grade 2,494.65 5,598.87 2,067.50 1,136.11 3,055.79 14,352.92
Grand Total 300,113.36 251,657.74 211,270.58 146,678.18 31,914.58 941,634.43
93
Annex H. Time series of mean basic pay by staff group
Staff Group
Mean basic pay per full-time equivalent during 12 month period ending in March (£)
2009 2010 2011 2012 2013 2014 2015 2016
Total HCHS non-medical staff 24,125 24,984 25,919 26,283 26,537 26,720 26,699 26,837
Qualified nursing, midwifery and health
visiting staff 28,028 29,111 30,122 30,390 30,544 30,782 30,712 31,000
Qualified health visitors 32,528 33,485 34,308 34,388 34,298 34,177 33,661 33,652
Qualified midwives 30,219 31,402 32,338 32,348 32,325 32,511 32,389 32,655
Total qualified scientific, therapeutic
and technical staff 31,913 32,984 34,081 34,308 34,402 34,524 34,462 34,652
Qualified allied health professions 31,015 32,000 33,041 33,258 33,333 33,491 33,285 33,463
Qualified healthcare scientists 32,041 33,343 34,558 34,944 35,183 35,429 36,006 36,204
Other qualified scientific, therapeutic
and technical staff 33,417 34,420 35,479 35,581 35,592 35,629 35,442 35,673
Qualified ambulance staff 24,665 25,540 26,219 26,396 26,570 26,872 26,960 27,175
Support to clinical staff 16,652 17,211 17,867 18,224 18,483 18,605 18,575 18,437
94
Staff Group
Mean basic pay per full-time equivalent during 12 month period ending in March (£)
2009 2010 2011 2012 2013 2014 2015 2016
Support to doctors and nursing staff 16,505 17,027 17,649 17,999 18,279 18,408 18,361 18,617
Support to scientific, therapeutic and
technical staff 17,220 17,947 18,741 19,089 19,248 19,382 19,415 17,426
Support to ambulance staff 17,229 17,683 18,303 18,803 19,103 19,066 18,998 19,377
NHS infrastructure support 24,588 25,612 26,696 27,053 27,500 27,864 28,189 28,639
Central functions 21,687 22,650 23,763 24,260 24,653 24,854 25,000 25,509
Hotel, property and estates 15,433 15,913 16,522 16,860 17,142 17,278 17,268 17,656
Senior managers 66,205 68,138 71,845 74,045 75,329 77,506 78,595 78,381
Managers 42,445 43,954 46,164 46,871 47,544 48,648 48,819 48,401
95
Annex H1. Time series of mean total earnings by staff group
Staff Group
Mean total earnings per person during the 12 month period ending in March (£)
2009 2010 2011 2012 2013 2014 2015 2016
Total HCHS non-medical staff 24,017 24,770 25,566 25,940 26,263 26,338 26,448 26,581
Qualified nursing, midwifery and health
visiting staff 28,384 29,412 30,174 30,439 30,657 30,917 31,050 31,169
Qualified health visitors 27,126 27,936 28,576 28,803 29,063 29,190 29,190 29,092
Qualified midwives 29,145 30,257 30,816 30,846 31,001 31,211 31,298 31,382
Total qualified scientific, therapeutic and
technical staff 30,311 31,219 32,025 32,182 32,242 32,225 32,245 32,209
Qualified allied health professions 28,152 28,983 29,773 29,863 29,984 30,162 30,093 30,162
Qualified healthcare scientists 34,617 35,837 36,679 37,027 36,938 36,870 37,282 37,049
Other qualified scientific, therapeutic
and technical staff 30,697 31,528 32,353 32,500 32,598 32,664 32,696 32,711
Qualified ambulance staff 35,651 36,044 35,831 35,881 36,310 36,300 36,602 36,526
96
Staff Group
Mean total earnings per person during the 12 month period ending in March (£)
2009 2010 2011 2012 2013 2014 2015 2016
Support to clinical staff 16,052 16,594 17,158 17,520 17,819 18,003 18,139 18,343
Support to doctors and nursing staff 15,921 16,416 16,946 17,293 17,610 17,812 17,927 18,139
Support to scientific, therapeutic and
technical staff 15,492 16,191 16,896 17,258 17,452 17,610 17,794 17,988
Support to ambulance staff 20,520 21,233 21,665 22,325 22,794 22,630 22,827 23,092
NHS infrastructure support 24,310 25,134 26,325 26,754 27,392 27,205 27,568 27,896
Central functions 20,548 21,430 22,669 23,143 23,764 23,815 24,111 24,510
Hotel, property and estates 16,056 16,121 16,485 16,722 16,882 16,886 16,927 17,232
Senior managers 66,889 68,738 73,443 76,498 78,689 75,619 75,494 74,879
Managers 42,143 43,581 46,490 47,728 48,957 48,691 49,037 48,498
NHS Digital, NHS Staff Earnings Estimates to March 2016 - Provisional statistics: Tables [.xlsx],
http://digital.nhs.uk/catalogue/PUB20971/nhs-staff-earn-mar-16-tables.xlsx
97
Sources for Annexes H and H1
Annex I. Advertised vacancies by staff group
Staff Group
Numbers Ratio of Total advertised vacancy FTE
Total web
hits
Total
applications
Total
shortlisted
Total
advertised
vacancy
FTE
Total
appointed
Total
web
hits
Total
applications
Total
shortlisted
Total
advertised
vacancy
FTE
Total
appointed
All National
Workforce Data Set
(NWD) Staff Groups -
Non-Medical (excl
students) 177,172,529 3,750,371 856,808 278,648 56,533 635.83 13.46 3.07 1.00 0.20
Additional Clinical
Services 20,236,896 917,260 203,483 31,068 10,514 651.37 29.52 6.55 1.00 0.34
Additional Professional
Scientific and
Technical 9,511,202 120,891 32,088 11,672 2,381 814.86 10.36 2.75 1.00 0.20
98
Staff Group
Numbers Ratio of Total advertised vacancy FTE
Total web
hits
Total
applications
Total
shortlisted
Total
advertised
vacancy
FTE
Total
appointed
Total
web
hits
Total
applications
Total
shortlisted
Total
advertised
vacancy
FTE
Total
appointed
Administrative and
Clerical 57,534,757 1,779,742 313,483 74,970 17,983 767.44 23.74 4.18 1.00 0.24
Allied Health
Professionals 22,680,226 232,598 65,607 32,314 5,830 701.86 7.20 2.03 1.00 0.18
Estates and Ancillary 6,161,272 158,982 39,066 7,806 2,362 789.34 20.37 5.00 1.00 0.30
Healthcare Scientists 4,510,962 70,794 11,695 6,435 1,083 700.97 11.00 1.82 1.00 0.17
Nursing and Midwifery
Registered 56,537,214 470,104 191,386 114,382 16,380 494.28 4.11 1.67 1.00 0.14
99
Annex I1. Advertised vacancies by region
Region
Health
Education
England Area
Numbers Ratio of Total advertised vacancy FTE
Total web
hits
Total
applications
Total
short-
listed
Total
advertised
vacancy
FTE
Total
appointed
Total
web hits
Total
applica
tions
Total
short-
listed
Total
advertised
vacancy
FTE
Total
appointed
All National Workforce Data
Set (NWD) Staff Groups -
Non-Medical (excl students) 177,172,529 3,750,371 856,808 278,648 56,533 635.83 13.46 3.07 1.00 0.20
North North East 7,177,197 190,291 55,027 9,573 2,472 750 19.88 5.75 1.00 0.26
North West 20,494,274 470,793 84,273 32,528 5,450 630 14.47 2.59 1.00 0.17
Yorkshire and the
Humber 15,579,793 367,480 97,932 20,970 7,261 743 17.52 4.67 1.00 0.35
Midlands
and East
East Midlands 12,443,576 243,387 67,397 17,971 4,812 692 13.54 3.75 1.00 0.27
West Midlands 16,853,484 417,896 124,723 24,693 10,169 683 16.92 5.05 1.00 0.41
East of England 16,331,313 281,729 72,223 27,464 4,600 595 10.26 2.63 1.00 0.17
100
Region
Health
Education
England Area
Numbers Ratio of Total advertised vacancy FTE
Total web
hits
Total
applications
Total
short-
listed
Total
advertised
vacancy
FTE
Total
appointed
Total
web hits
Total
applica
tions
Total
short-
listed
Total
advertised
vacancy
FTE
Total
appointed
London North Central and
East London 13,097,245 305,586 45,242 21,633 2,583 605 14.13 2.09 1.00 0.12
North West
London 10,183,307 241,163 31,278 17,487 737 582 13.79 1.79 1.00 0.04
South London 10,335,792 274,632 38,234 15,095 2,512 685 18.19 2.53 1.00 0.17
South Kent, Surrey and
Sussex 15,084,500 252,599 62,193 28,223 4,058 534 8.95 2.20 1.00 0.14
Thames Valley 7,866,956 101,596 17,909 12,823 1,288 614 7.92 1.40 1.00 0.10
Wessex 8,826,844 133,991 38,125 15,401 2,176 573 8.70 2.48 1.00 0.14
South West 14,165,205 252,281 78,318 20,183 5,258 702 12.50 3.88 1.00 0.26
Special Health Authorities and
other statutory bodies 8,733,043 216,947 43,934 14,603 3,157 598 14.86 3.01 1.00 0.22
101
Annex J - Increments and positions within band
Band/
Point
Band 1 Band 2 Band 3 Band 4 Band 5 Band 6
Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment
£ % £ % £ % £ % £ % £ %
2 15,251 265 1.7% 15,251 265 1.7%
3 15,516 - 15,516 428 2.8%
4 15,944 428 2.7%
5 16,372 428 2.6%
6 16,800 551 3.3% 16,800 551 3.3%
7 17,351 627 3.6% 17,351 627 3.6%
8 17,978 - 17,978 174 1.0%
9 18,152 501 2.8%
10 18,653 564 3.0%
11 19,217 438 2.3% 19,217 438 2.3%
12 19,655 - 19,655 693 3.5%
13 20,348 704 3.5%
14 21,052 640 3.0%
15 21,692 217 1.0%
16 21,909 549 2.5% 21,909 549 2.5%
17 22,458 - 22,458 905 4.0%
18 23,363 941 4.0%
19 24,304 994 4.1%
20 25,298 1,004 4.0%
21 26,302 1,059 4.0% 26,302 1,059 4.0%
22 27,361 1,101 4.0% 27,361 1,101 4.0%
23 28,462 - 28,462 871 3.1%
102
Band/
Point
Band 1 Band 2 Band 3 Band 4 Band 5 Band 6
Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment
£ % £ % £ % £ % £ % £ %
24 29,333 1,024 3.5%
25 30,357 1,026 3.4%
26 31,383 1,024 3.3%
27 32,407 1,153 3.6%
28 33,560 1,665 5.0%
29 35,225
103
Annex J (continued)
Band/
Point
Band 7 Band 8a Band 8b Band 8c Band 8d Band 9
Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment
£ % £ % £ % £ % £ % £ %
28 33,560 1,665 5.0%
29 35,225 1,025 2.9%
30 36,250 1,153 3.2%
31 37,403 1,280 3.4%
32 38,683 1,345 3.5%
33 40,028 1,345 3.4% 40,028 1,345 3.4%
34 41,373 - 41,373 1,665 4.0%
35 43,038 1,665 3.9%
36 44,703 1,922 4.3%
37 46,625 1,409 3.0% 46,625 1,409 3.0%
38 48,034 - 48,034 2,433 5.1%
39 50,467 2,818 5.6%
40 53,285 2,819 5.3%
41 56,104 1,536 2.7% 56,104 1,536 2.7%
42 57,640 - 57,640 1,966 3.4%
43 59,606 2,791 4.7%
44 62,397 4,185 6.7%
45 66,582 1,902 2.9% 66,582 1,902 2.9%
46 68,484 - 68,484 2,854 4.2%
47 71,338 3,487 4.9%
104
Band/
Point
Band 7 Band 8a Band 8b Band 8c Band 8d Band 9
Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment Basic
Pay
per
FTE (£)
Increment
£ % £ % £ % £ % £ % £ %
48 74,825 3,804 5.1%
49 78,629 3,805 4.8% 78,629 3,805 4.8%
50 82,434 - 82,434 3,956 4.8%
51 86,390 4,147 4.8%
52 90,537 4,346 4.8%
53 94,883 4,554 4.8%
54 99,437 -
105
Annex K - Cost impact of the National Living Wage (NLW) on the NHS paybill
The precise cost impact of the national living wage on the NHS paybill is dependent on a number of factors – workforce growth,
incremental drift, future NHS pay awards, and the rate at which the national living wage increases each year. In order to give a
broad indication of the possible cost, NHS Employers has made some neutral assumptions on these points.
Assumptions
Workforce growth -16/17 workforce size is maintained over period Incremental drift – current distribution of workforce across pay points remains constant
Future NHS pay awards – Average 1% public sector pay policy is applied until 19/20. Award for 20/21 is unknown.
Cost estimates include both the in-year additional cost of the increasing value of the living wage, and the recurrent cost of living wage increases made in previous years.
106
Rate at which the national living wage is assumed to increase each year:
Financial Year
NLW
actual/
forecast
rates (£)
Forecast
growth in
average
earnings
Cumulative
Forecast
growth in
average
earnings
Share of
Cumulative
Wider
economy
profile
NLW
forecasts
Equivalent
AfC
Annual
Salary (£)
2016/17 7.20 0% 7.20 14,079
2017/18
3.60% 3.60% 24% 7.64 14,931
2018/19 3.50% 7.23% 49% 8.08 15,790
2019/20 3.40% 10.87% 73% 8.52 16,699
2020/21 9.00 3.60% 14.86% 100% 9.00 17,598