NHS pay review body: twenty-sixth report 2012 - Official Documents

Appendix D
The Department Of Health’s Pay Metrics
The Department of Health is currently revising the methodology that underpins the pay metrics.
There are known issues with the current methodology which will impact on the metrics and
historical comparisons for recent years. These include:
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The staff group split of the pay bill is becoming increasingly unreliable due to a lack
of staff group level spend data for Foundation Trusts (FTs);
An annual snapshot of workforce numbers is used from the Census publication,
rather than the average workforce over the year, which can skew per FTE pay bill
and earnings calculations, and therefore per FTE growth (and drift) calculations;
Earnings per FTE is calculated based on the pay bill per FTE and estimates of oncosts
which are of uncertain reliability; and
There are some inconsistencies introduced by the need to merge different data
sources for FTs and non-FTs.
The benefits of the new approach are that it:
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Is based on more detailed and regularly available data sources;
Uses more reliable estimates of spend across staff groups;
Uses more detailed staff groups that are meaningful from a workforce planning
perspective;
Considers average workforce levels, as opposed to September snapshots, to give
more reliable pay bill per FTE estimates;
Provides a more detailed breakdown of pay bill across earnings and on-cost streams;
Supports a more nuanced bottom-up approach to forecasting pay bill pressures; and
Is available with less of a time lag and can be monitored in-year.
The Department plans to implement the new approach for the next set of metrics. In the
meantime, the 2010/11 metrics have been supplied on the basis of the existing methodology.
Historical figures
The historical pay metrics (up to and including 2010/11) have been estimated using pay bill
data from NHS Financial Returns, NHS Accounts and Foundation Trust Annual Reports.
Workforce statistics up to and including 2010/11 are from the annual NHS Workforce Census.
The pay bill figures include all employees of Trusts, Primary Care Trusts, Strategic Health
Authorities and Foundation Trusts in England. They do not include agency staff, contractors’
employees, GPs, other GP practice staff or family dentists and their staff.
The pay bill data from the Foundation Trust Annual Reports does not include a breakdown of
costs by staff group; this breakdown has been estimated using historic NHS Financial Returns.
Earnings per FTE figures have been derived from the pay bill per FTE figures using the NHS
Pension Scheme and National Insurance rates and thresholds that apply to NHS employers.
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