Policy paper

Supplementary evidence to NHSPRB: average costs of employing staff in the hospital and community health sector in England

Published 23 March 2023

Applies to England

© Crown copyright 2023

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This publication is available at https://www.gov.uk/government/publications/supplementary-evidence-to-nhsprb-hospital-and-community-health-sector/supplementary-evidence-to-nhsprb-average-costs-of-employing-staff-in-the-hospital-and-community-health-sector-in-england

Data summary

The accompanying spreadsheet ‘Supplementary data to support NHSPRB 2023 to 2024’ provides estimates on the earnings and costs of employing granular sections (for example, by staff group, pay band or pay point) of the hospital and community health services (HCHS) workforce in England. It includes information on basic pay, total earnings and paybill, the latter includes employer pension and national insurance contributions. All figures are provided on a ‘per FTE’ basis which reflects the average for one ‘full time’ member of staff.

Data provides estimates for 2021 to 2022 based on outturn data from the electronic staff record (ESR) and estimates for 2022 to 2023 assuming that patterns of additional earnings and total paybill remain stable.

Why is this data being published

Principally these estimates are provided to aid the pay review bodies (PRBs) in their work making pay recommendations. Pay review bodies are independent panels - technically, non-departmental public bodies - that gather evidence from a range of stakeholders including government and trade unions and then provide the government with advice each year on pay. In the health system the NHS Pay Review Body (NHSPRB) covers non-medical staff working under NHS Agenda for Change (AfC), the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) covers medical staff, and the Review Body on Senior Salaries (SSRB) covers very senior managers.

It is important that they have access to accurate workforce and costing data, including the distribution of staff across pay bands and points, to assess pay recommendations more accurately. Due to an unavoidable lag to payroll data, outturn information following the most recent pay award is not available. However, if we assume that the relationship between basic pay, total earnings and paybill is stable then it is possible to estimate its impact based on the known value of the pay scale following the pay award and using the historical relationship between pay, earnings and paybill.

What data has been published

This data estimates the earnings and paybill cost of substantive staff in the hospital and community health sector in England and is provided for both medical and non-medical staff. Estimates do not cover general practice, social care, the independent sector or those working via bank or agency routes.

We are providing information for detailed sections of the workforce as defined by:

  • staff group or DDRB contract group (for example, nurses or consultants)
  • AfC band or medical contract (for example, AfC band 6 or 2003 consultant contract)
  • pay step or pay threshold (for example, top of AfC band 6 or new consultant)

We are providing 2 sets of pay information - the first of which covers outturn estimates for 2021 to 2022 and the second which provides estimates for 2022 to 2023 based on the results of the 2021 to 2022 analysis. We include estimates for 2022 to 2023 because this helps show the impact of the 2022 to 2023 pay award, before outturn data is available, and sets the context for the 2023 to 2024 pay round.

All figures are provided on a per FTE basis which reflects the average for one full time member of staff.

The table below outlines the statistics provided.

Table 1: summary of information provided

Statistics What this means Provided for 2021 to 2022 Provided for 2022 to 2023
Estimated FTE The number of FTE in the group Yes No
Pay scale value (£) The basic pay value for the pay point Yes Yes
Estimated total earnings per FTE (£) Average total earnings per full time equivalent Yes Yes
Estimated total earnings per FTE (excluding ‘other’ pay) (£) Average total earnings per full time equivalent after removing pay linked to ‘other’ pay in the ESR Yes Yes
Estimated paybill per FTE (£) The average for one full time member of staff including basic pay, additional earnings, employer national insurance and employer pension contributions Yes Yes
Estimated paybill per FTE (excluding ‘other’ pay) (£) The average for one full time member of staff including basic pay, additional earnings, employer National Insurance and employer pension contributions. Payments in the ‘other’ pay category are removed Yes Yes
Estimated total earnings per FTE as a multiple of basic pay Calculated field based on ‘total earnings per FTE’ divided by ‘pay scale value’ Yes No
Estimated total earnings per FTE (excluding ‘other’ pay) as a multiple of basic pay Calculated field based on total earnings per FTE (excluding ‘other’ pay) divided by ‘pay scale value’ Yes No
Estimated paybill per FTE as a multiple of total earnings Calculated field based on ‘paybill per FTE’ divided by total earnings per FTE Yes No
Estimated paybill per FTE (excluding ‘other’ pay) as a multiple of total earnings Calculated field based on ‘paybill per FTE (excluding ‘other’ pay) divided by ‘total earnings per FTE (excluding ‘other’ pay) Yes No

How to use these estimates

These estimates may be used to:

  • provide estimates of earnings patterns for different groups of staff in 2021 to 2022 including basic pay, additional earnings and employer on-costs. Data is provided on a per FTE basis (the average for employing one full time member of staff) which is something that is not available via other data sources and is something that the PRBs have asked for in recent years
  • estimate the cost of employing staff in 2022 to 2023 using the known basic pay values following the 2022 to 2023 pay award and the earnings and paybill multipliers identified from the 2021 to 2022 data
  • use 2022 to 2023 pay estimates as part of the process to determine pay recommendations in 2023 to 2024. In simple terms the total cost of any pay policy is linked to how staff are distributed between pay points, the relative cost of employing staff in different pay points, and the size of the pay award given to each pay point

The estimate for paybill per FTE may be derived from the basic pay scale value and the multipliers provided:

  • the earnings multiplier allows users to estimate total earnings per FTE from a given rate of basic pay by estimating average additional earnings (a figure of 1.2 indicates average additional earnings are equal to 20% of basic pay)
  • the paybill multiplier allows users to derive the average paybill per FTE given total earnings per FTE by estimating average on-costs (a figure of 1.3 indicates average National Insurance and pension contributions are equal to 30% of total earnings)

Therefore, to calculate the estimated paybill per FTE from the information provided:

  • take the basic pay scale
  • multiply by the ‘additional earnings multiplier’ (to determine average total earnings per FTE)
  • multiply by the ‘paybill multiplier’ (to estimate total paybill including on-costs)

Important caveats when using this data

Following are several important caveats that users must consider when using this data.

Estimates for 2021 to 2022 are based on DHSC analysis of data extracted from the electronic staff record which has been scaled and processed to ensure consistency with national pay scales and official workforce estimates. The process is detailed in the ‘Methodology’ section.

Estimates of total earnings per FTE and paybill per FTE in 2022 to 2023 are based on the results of the 2021 to 2022 analysis. Users are reminded that these ‘multipliers’ may change slightly from year to year depending on factors such as workforce usage, external events or changes to the tax system:

  • on cost estimates in 2021 to 2022 will not include the impact of the temporary increase to National Insurance that was in operation between 6 April and 5 November 2022
  • as a result we would advise that any estimates calculated using this data be rounded to an appropriate level (generally to no more than 2 significant figures) to avoid spurious accuracy

FTE forecasts for 2022 to 2023 are not available and would likely be more uncertain than the per FTE costs which are heavily driven by the known pay award. Users are reminded that the cost of any pay proposal in 2023 to 2024 is dependent on the average size of the workforce in 2023 to 2024, how those staff are distributed between pay points, and the average cost of each pay point over the period those pay rates are in operation.

These estimates cannot be used to calculate the full ‘system cost’ of any pay award. The full cost of pay awards to HCHS staff will include ‘spillover’ costs in addition to the impact on core paybill for substantive staff. These additional costs are due to knock-on consequences for temporary staffing pay rates, and the impact of funding mechanisms for both NHS and independent sector activity which mean pay uplifts have a wider financial impact. The uplift made to activity tariff payment rates to absorb pay awards will also apply to independent sector activity payments and increase the total costs. The estimates included in this publication do not include spillovers which may differ depending on the precise coverage and mechanism used to make any pay award.

Estimates are limited to substantive staff working in the hospital and community health sector captured on the NHS electronic staff record and do not cover other parts of the DDRB remit group including GPs or most dentists who operate outside of the HCHS sector.

Methodology

Estimates are based on analysis of a large sample of data (over 1.2 million records per month) extracted from the electronic staff record (more information on the data source can be found in the ‘Data notes’ section of this document) which undergo a limited set of data processing and scaling to maintain consistency with official statistics published by NHS Digital and pay circulars published by NHS Employers.

We then undertake additional data validation to ensure that our sample represents typical pay behaviour. For each month the recorded basic pay is compared with what would be expected based on the recorded pay band, pay point and FTE, and removed if there is a discrepancy of more than 5% in either direction. This impacts a relatively small (around 5%) amount of data each month and is undertaken to ensure that the sample is not biased by staff (for example, joiners or leavers) who may have unusual earnings patterns in a given month or be temporarily out of the active workforce.

FTE estimates

FTE estimates at staff group and band level are scaled to maintain consistency with the official NHS workforce statistics published by NHS Digital. We do this because we want to maintain trust in official statistics and avoid any inconsistencies that may be caused by things such as the additional steps that NHS Digital are able to carry out (for example, cross referencing with other datasets) which help to ensure than workforce estimates are as accurate as possible.

NHS Digital publish workforce information by staff group, and, for non-medical staff, pay band. As NHS Digital do not routinely publish workforce information by pay point, we estimate the distribution of staff within each combination of staff group and pay band based on the original ESR extract. We do this to avoid any inconsistencies that may be caused by things such as the additional data validation steps that NHS Digital are able to carry out (for example, cross referencing with other datasets) which help to ensure that workforce estimates are as accurate as possible. 

FTE estimates are not available for 2022 to 2023.

Pay estimates

Pay estimates are based on the following:

Total earnings and paybill estimates (which include pension and NI contributions) are based on analysis of records that pass initial validation checks and cover all other pay and on-cost categories, including geographical allowances, unsocial hours premia and employer pension contributions.

We provide estimates that are inclusive and exclusive of ‘other’ pay - this is a pay type in ESR that includes any payments not captured elsewhere as shown in table 3. We do this because ‘other’ pay may be more volatile than other pay types and in 2021 to 2022 includes the impact of the one-off payment made to staff who worked regular overtime during 2019 to 2020 and/or 2020 to 2021:

  • for 2021 to 2022 we use the multiples calculated directly from ESR data
  • for 2022 to 2023 it is assumed that the same ‘multipliers’ of earnings and paybill from 2021 to 2022 apply

Data glossary

FTE

Full time equivalent is a standardised measure of the workload of an employed person and allows for the total workforce workload to be expressed in an equivalent number of full time staff. For non-medical staff on Agenda for Change 1.0 FTE equates to 37.5 hours while for most medical staff 1.0 FTE would be 40 hours. This differs from headcount where all staff count as ‘1’ regardless of hours worked.

Staff group and medical grade

Used to describe the basic function of staff. For non-medical staff this is the broad staff group such as nurses, midwives or central functions. For doctors this is the medical grade which denotes seniority or level of training for example, consultant or foundation doctor.

Medical contract

For medical staff this denotes which national contract staff are on based on the ‘grade code’ variable within ESR. This allows us to distinguish between medical staff who may be on the same grade but are employed on a different contract (for example distinguishing between the new 2021 specialty doctor contract and the old 2008 specialty doctor contract). Pay circulars for different medical contracts are published by NHS Employers.

Pay bands, pay points and pay steps

Some national contracts, including NHS Agenda for Change and the 2003 consultant contract, operate across 3 levels:

  • the pay band or pay threshold which can be used to represent the level of seniority
  • the pay point represents the range of pay values within the pay band or threshold
  • the pay step represents the current position within the pay point. In the case of Agenda for Change there are several pay steps which map to the same pay point

An example of this is provided in table 2 below: figures are based on band 5 pay values for 2022 to 2023.

Table 2: Agenda for Change band 5 structure from 1 April 2022

Years of experience Pay scale value (£) Pay band Pay point Pay step
less than 1 Year 27,055 Pay band 5 Pay point 1 Pay step 1
1 to 2 Years 27,055 Pay band 5 Pay point 1 Pay step 2
2 to 3 Years 29,180 Pay band 5 Pay point 2 Pay step 3
3 to 4 Years 29,180 Pay band 5 Pay point 2 Pay step 4
4 to 5 Years 32,934 Pay band 5 Pay point 3 Pay step 5
5 to 6 Years 32,934 Pay band 5 Pay point 3 Pay step 6
6 to 7 Years 32,934 Pay band 5 Pay point 3 Pay step 7
7 Years and more 32,934 Pay band 5 Pay point 3 Pay step 8

The spreadsheet includes ‘pay band and ‘pay step’ components.

Very senior manager (VSM)

Senior staff who are either part of the executive team or report directly to the executive team (for example, board level director, director of finance) and are not employed on Agenda for Change. In this data, very senior managers are identified based on a combination of earnings and occupation code.

Non-AfC grade

A small number of non-medical staff cannot be assigned to any AfC pay band. If this is the case these staff are classified as being ‘non-AfC’.

Pay scale value

The published basic pay value for the combination of contract, pay band and pay step as published by NHS Employers.

Total earnings

The average amount of earnings received per full time member of staff including basic pay and additional earnings.

‘Other’ pay

This is any pay that does not fit into the standard pay categories on ESR (as shown in table 3) In 2021 to 2022 this will include one-off payments made to staff as part of a settlement for staff working regular overtime.

Table 3: ‘other’ pay types

Pay type Pay description
Bonus or PRP Any form of bonus or performance-related pay. Excludes discretionary points, distinction awards and clinical excellence awards that are grouped separately
Directors of public health supplement Specific payment type made to directors of public health
Occupational absence Occupation pay for adoption, maternity or paternity (excludes statutory absence payments)
Other Any payment that does not fit into any other category including redundancy payments
Protected pay Payment made to staff that moved onto agenda for change but whose previous contracts provided higher pay overall

Source: electronic staff record

Paybill

The estimated total cost of employing staff including basic pay, additional earnings, employer pension contributions and employer National Insurance contributions.

Total earnings multiple

This compares average total earnings per FTE to the pay scale value. A figure of 1.2 would indicate that on average additional earnings are worth 20% of basic pay.

Paybill multiple

This compares paybill per FTE to total earnings per FTE. A figure of 1.3 would indicate that on average total paybill per FTE is around 30% higher than total earnings per FTE.

Data notes

Information is based on data extracted from the NHS electronic staff record (ESR) which is the HR and payroll system used throughout the hospital and community health sector in England. This includes staff working for NHS trusts, NHS foundation trusts, integrated care boards (ICBs, formerly CCGs), arm’s length bodies (ALBs) and other support organisations but does not cover primary care, social care or the independent sector. ESR does not include information on any other ‘outside’ earnings that some staff may have such as private work.

Data extracted for this publication is restricted to substantive members of the workforce (FTE greater than 0) which excludes bank or locum staff.

Outturn estimates are for 2021 to 2022 which is the most recent completed year. As earnings and workforce composition can change over the course of the year it is important to consider earnings across a full year. Estimates for 2022 to 2023 are based on updated pay scale values after the 2022 to 2023 pay award and use the earnings and paybill multipliers from 2021 to 2022 data.

Estimates of earnings and paybill are provided inclusive and exclusive of ‘other’ pay - this is any pay that does not fit into the standard pay categories on ESR (as shown in table 3) and may be more volatile than other pay types - for example in 2021 to 2022 ‘other’ pay will include the impact of one-off payments made to staff working regular overtime.

There are a small number of rows where the recorded FTE for the combination of staff group, pay band and pay step is less than 5. To ensure we are not disclosing individuals pay and earnings in these cases the FTE is replaced by an asterisk - in total this impacts around 250 FTE which is around 0.02% of the HCHS workforce.

Analytical quality assurance

Quality assurance is an important part of the analytical process to ensure that the estimates provided are as robust as possible as well as communicating any unavoidable risk or uncertainty.

We have undertaken the following quality assurance on this analysis:

Because pay multipliers, and workforce distribution, will vary from year to year there will always be some uncertainty around using these estimates to cost future pay recommendations and so we would advise that figures be rounded to an appropriate level (generally to no more than 2 significant figures) to avoid spurious accuracy.

Any queries on this publication should be sent to payanalysis@dhsc.gov.uk.

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