Contents
Executive Summary 6
Chapter 1. Introduction 9
Introduction 9
Twenty-Sixth Report 2012 9
Remit for Our Twenty-Seventh Report 2013 9
Our Market-Facing Pay Report 2012 11
Parties Giving Evidence for Our Twenty-Seventh Report 12
Review Body Visits in 2012 14
NHS Developments 14
Key Themes for this Report 15
Chapter 2. The Economy, Inflation, Labour Market, Earnings and Pay Settlements 17
Introduction 17
Economic Growth 17
Inflation 18
Labour Market 19
Average Earnings Growth and Pay Settlements 22
Evidence from the Parties 25
Earnings of Our Remit Group 27
Membership of the NHS Pension Scheme 31
Our Comment 31
Chapter 3. Recruitment, Retention and Motivation 33
NHS Workforce, Vacancies and Turnover 33
Changes in Staffing Levels 33
Vacancy Rates 36
Turnover 36
Evidence from the Parties 36
Our Comment 38
Shortage Occupations 39
Evidence from the Parties 39
Our Comment 40
Recruitment and Retention Premia 40
Evidence from the Parties 41
Our Comment 42
Workforce Planning 43
Evidence from the Parties 43
Our Comment 44
Training and Development 45
Evidence from the Parties 45
Our Comment 45
Appraisal and the Knowledge and Skills Framework 46
Evidence from the Parties 46
Our Comment 47
Staff Engagement 47
Background Research 47
NHS Staff Survey 48
Evidence from the Parties 50
Our Comment 51
Chapter 4. Funds Available to the Health Departments 52
Introduction 52
Evidence from the Parties 52
NHS Payment by Results (PbR) Tariff 59
Reports on NHS Finances and Productivity 59
Our Comment 60
Chapter 5. Pay Proposals and Recommendations for 2013/14 62
Basic Pay Uplift 62
Evidence from the Parties 62
Our Comment and Recommendation 66
Compression of AfC Pay Points 15 and 16 69
Evidence from the Parties 69
Our Comment 70
High Cost Area Supplements 70
Evidence from the Parties 71
Our Comment and Recommendation 71
Chapter 6. A Forward Look 73
Introduction 73
Pay Developments for 2013/14 73
Key Messages for 2013/14 76
Appendix A. Remit Letters 78
Appendix B. Recommended Agenda for Change Pay Scales with Effect from 1 April 2013 84
Appendix C. Composition of Our Remit Group 85
Appendix D. The Department of Health's Pay Metrics 88
Appendix E. The Parties' Website Addresses 93
Appendix F. Previous Reports of the Review Body 94
Appendix G. Abbreviations 96
Table 2.1: Inflation forecasts, fourth quarter 19
Table 2.2: Change in median gross weekly pay for full time employees at adult rates, UK, April 2008-2012 30
Table 3.1: Change in NHS non-medical workforce by UK country and broad staff group4, September 2010 - September 2011 34
Table 3.2: Summary results from the National NHS Staff Survey, 2007-2011, England, excluding medical and dental staff 49
Table 4.1: NHS revenue expenditure since 2000/01 53
Table 4.2: Increase in NHS revenue expenditure and proportion consumed by pay bill 54
Table 4.3: Disposition or revenue increase across expenditure components 55
Table 4.4: NHS PbR tariff uplifts 59
Table 5.1: Recommended value of HCAS minima and maxima 72
Table C1: Qualified nurses and midwives 86
Table C2: Nursing and healthcare assistants and support staff 86
Table C3: Professional, technical and social care2 86
Table C4: Ambulance 87
Table C5: Administration, estates and management 87
Table C6: Other 87
Table C7: Total NHS non-medical workforce 87
Table D1: Aggregate pay bill 90
Table D2: Aggregate total earnings 90
Table D3: Full time equivalent (FTE) staff, average for the year 91
Table D4: Pay bill per FTE 91
Table D5: Total earnings per FTE 92
Figure 2.1: GDP growth 2007 to 2012 (chained volume measure at market prices) 17
Figure 2.2: Inflation, 2007 to 2012 18
Figure 2.3: Total employment, rate and level, 2002 to 2012 20
Figure 2.4: LFS unemployment and claimant count, 1992 to 2012 21
Figure 2.5: Job vacancies, three-month average, 2007 to 2012 21
Figure 2.6: Average weekly earnings (total pay), three-month average, 2007 to 2012 22
Figure 2.7: Pay settlements, 2008 to 2012 (three-month average) 23
Figure 2.8: Mean basic salary and non-basic pay by main staff groups, England, 2010 to 2012 28
Figure 2.9: Estimated earnings distributions for full time employees (UK), AfC staff and wider economy, April 2012 29
Figure 2.10: Estimated pension membership rate by AfC Band, England, September 2009-2012 31
Figure 3.1: NHS non-medical workforce by UK country, September 2007-2011 34
Figure 3.2: Distribution of FTE staff on Agenda for Change pay bands by UK country, latest available data 35
Figure 3.3: Percentage of AfC staff at the top of pay bands by UK country, latest available data 35