Remuneration and staff report

Remuneration and Pension for Directors (subject to audit)

Non-Executive Directors

Salaries and allowances

Year-ended 31 March 2019:

Non-Executive Directors

Salaries and allowances

Year-ended 31 March 2018:

Directors

Salaries and allowances

Year-ended 31 March 2019:

Directors

Salaries and allowances

Year-ended 31 March 2018:

*  denotes full year equivalent.

Note 1:  Teresa Allen, Chief Executive, was seconded to the Health Research Authority from NHS Blood and Transplant on a full-time basis until 31 July 2017, from when Teresa became an HRA member of staff. Teresa's salary was increased to recognise her role as the HRA’s Interim Chief Executive, backdated to the start of her appointment at the HRA. The arrears paid upon her transfer to the HRA, are included in the table above. Details of Teresa’s remuneration are not included within the Annual Report of NHS Blood and Transplant. 

Note 2: Janet Wisely stepped down as Chief Executive on 31 July 2017 due to an unexpected and life changing health situation. She continued to be employed by the HRA, until 30 June 2018 and remained on full pay until she left. The remuneration she received after ceasing to be a Director has not been included in the table above.

Note 3: As part of the HRA executive restructure in 2017, Joan Kirkbride was made redundant and decided to take early retirement. Joan received a redundancy payment of £94,314 and a further payment of £65,905 was made to NHS Pensions for the capitalisation costs of early retirement, in accordance with the NHS Pension scheme. The total cost of both payments was £160,219 and this is disclosed within the exit-packages table.

Directors

Pension benefits

Year-ended 31 March 2019:

Pension benefits (continued) 

Year-ended 31 March 2019:

Notes:(*) NHS Pensions did not provide a lump sum figure for senior managers who only have membership in the 2015 or 2008 section, unless they chose to move their 1995 section benefits under the Choice option.

Cash Equivalent Transfers

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme.  

The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosures applies. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. The total entitlement will increase from one year to the next, by virtue of staff having an additional year’s service. 

In certain circumstances, the extra service accrued may not be sufficient to offset the inflation increase, in which case, in real terms the pension value can reduce and are therefore shown as negative values. The CETV figures also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute of Faculty of Actuaries.

Fair pay disclosures (subject to audit)

The relationship between the remuneration of our highest-paid director and the median remuneration is 4.14, a slight decrease on last year of 14 per cent. This is due to a decrease in the Chief Executive’s salary and increase in the median salary resulting from a nationally agreed reformed agenda for change pay structure.

In 2018/19, one employee (2017/18, 0) received remuneration in excess of the highest-paid director. Remuneration ranged from £165k to £170k (2017/18 £0). 

Staff Report

Early retirements and redundancies (subject to audit)

Year to 31 March 2019:

Year to 31 March 2018:

Redundancy and other departure costs have been paid in accordance with the provisions of Agenda for Change. Exit costs in this note are the full costs of departures agreed in the year. Additional costs of agreed early retirements are met by the HRA and not by the NHS pension scheme. Ill health retirement costs are met by the NHS pension scheme and are not included in this table. 

Analysis of staff costs (subject to audit)

The costs and average numbers of staff include the costs of staff employed by other NHS bodies that are recharged to the Health Research Authority. These are included within the 'Other' column. These figures include social security costs and employer contributions to the NHSPA.

The average number of persons employed during the period (subject to audit) 

Retirements due to ill health

This note discloses the number and additional pension costs for individuals who retired early on ill-health grounds during the year. There were one such retirement in the year to 31 March 2019 £52,655 (£0 2017/18). This information has been supplied by NHS Pensions.

Pension costs

Past and present employees are covered by the provisions of the two NHS pension schemes. Details of the benefits payable and rules of the schemes can be found on the NHS Pensions website. Both are unfunded defined benefit schemes that cover NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State for Health in England and Wales. They are not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, each scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS body of participating in each scheme is taken as equal to the contributions payable to that scheme for the accounting period.  

In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal valuations shall be four years, with approximate assessments in intervening years”. An outline of these follows:

a) Accounting valuation

A valuation of scheme liability is carried out annually by the scheme actuary (currently the Government Actuary’s Department) as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period and is accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2019, is based on valuation data at 31 March 2018, updated to 31 March 2019 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been used.

The latest assessment of the liabilities of the scheme is contained in the report of the scheme actuary, which forms part of the annual NHS Pension Scheme Accounts. These accounts can be viewed on the NHS Pensions website and are published annually. Copies can also be obtained from The Stationery Office.

b) Full actuarial (funding) valuation

The purpose of this valuation is to assess the level of liability in respect of the benefits due under the schemes (taking into account recent demographic experience), and to recommend contribution rates payable by employees and employers. 

The latest actuarial valuation undertaken for the NHS Pension Scheme was completed as at 31 March 2016. The results of this valuation set the employer contribution rate payable from April 2019. The Department of Health and Social Care have recently laid Scheme Regulations confirming that the employer contribution rate will increase to 20.6 per cent of pensionable pay from this date. 

The 2016 funding valuation was also expected to test the cost of the scheme relative to the employer cost cap set following the 2012 valuation. Following a judgment from the Court of Appeal in December 2018 Government announced a pause to that part of the valuation process pending conclusion of the continuing legal process. 

Off-payroll engagements

Following the Review of Tax Arrangements of Public Sector Appointees published by the Chief Secretary to the Treasury on 23 May 2012, the Health Research Authority must publish the following tables of information on their highly paid and / or senior off-payroll engagements.

Table 1

For all off-payroll engagements as at 31 March 2019, for more than £245 per day and that last longer than six months:

The HRA can confirm that all existing off-payroll engagements have at some point been subject to a risk-based assessment as to whether assurance is required that the individual is paying the right amount of tax and where necessary, that assurance has been sought.

Table 2

For all new off-payroll engagements between 1 April 2018 and 31 March 2019, for more than £245 per day and that last longer than six months:

Table 3:

For any off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, between 1 April 2018 and 31 March 2019:

Consultancy expenditure

The Health Research Authority spent £6,759 on VAT consultancy work relating to the Research IT Systems development for the year-ended the 31 March 2019 (2017/18: £196,800, for market assessment and procurement support for the Research IT Systems development). 

Sickness Absence Data 

Statistics Produced by HSCIC from Electronic Staff Record (ESR) Data Warehouse

Source: NHS Digital – Sickness Absence Publication – based on data from the ESR Data Warehouse.

Other Employee Matters

Diversity and Inclusion

The HRA promotes equality and integrates an anti-discriminatory approach into all areas of its work by:

• ensuring that barriers to accessing services and employment are identified and removed
• being committed to ensuring that all its practices are carried out in a fair, reasonable and consistent manner, promoting human rights and equality and diversity
• not discriminating against any staff, potential staff, members, partners, service users or anyone that deals with the HRA in any way. 

This ensures that anyone that deals with the HRA will receive equitable treatment whether they are receiving a service, providing a service, applying for a job, tendering for a contract or any other relationship. 

To build on our 2017/18 substantial rating for an audit assessing our compliance with equality and diversity best practice in the workplace as defined by Equality and Human Rights Commission (EHRC) we have committed in our business plan to developing an Equality and Diversity Strategy for the HRA in 2019/20. 

The Board’s Audit and Risk Committee (ARC) is also pleased to note that there had not been any allegations of discrimination against anyone with protected characteristics since the HRA’s inception.

The HRA is committed to ensuring equality of opportunity for all disabled staff and we promote a culture that enables staff with disabilities to participate fully in working life and are registered as a Disability Confident employer. In 2018/19 we agreed to develop a disability leave policy and created a working group to take this forward. We anticipate that this policy, now in draft, will be approved and piloted in 2019/20.

Equality information for staff 

The HRA publishes gender pay gap information showing the difference in average earnings between women and men. The results for 2018 show that the average hourly rate is 7.9 per cent higher for men with the median being 13.3 per cent. This does not mean that men get paid more than women for doing the same job, as this is highly unlikely given the NHS pay grade structure and employment practices the HRA uses. What it does show, however, is that the lower average pay for women reflects the fact that there are proportionately fewer women in management roles compared to men. 

The HRA is pleased that women are well represented across the workforce but appreciates that more can be done to address this gap and will be taking work forward through the Board and the Staff Forum actions to help reduce this difference.

We publish diversity information on our equality and diversity page.

Our gender pay gap data is also published on the Gov.uk website.

Health, safety and welfare

The HRA embraces health, safety and welfare as an integral part of its culture. It is committed to pursuing the fundamental right of all employees to work in a safe and healthy environment and is committed to a holistic approach to identifying and mitigating associated risks.

Managers and staff are supported by comprehensive health, safety and welfare arrangements including an active Health, Safety &Welfare Committee (HS&WC), comprehensive policies and procedures and access to expert advice. 

We encourage our employees to report accidents or instances of work-related ill health to highlight trends and inform health and safety performance. We are pleased to report that we have had no reportable incidents, down from one last year. The HS&WC is satisfied that if an incident were to occur it would be known immediately and reported. No reports under Reporting Injuries, Diseases and Dangerous Occurrences Regulations 2013 have been made.

Trade union recognition

The HRA has in place a well-established and embedded Staff Partnership Forum. In April 2018 we reached a formal partnership agreement with Unison and Managers in response to our 2017 staff engagement survey where staff expressed a strong level of interest in union recognition.  The Joint Negotiating Committee has met formally three times along with a number of other occasions to discuss organisational change processes. During the year 4 members of staff (3.6 FTE) were union officials at the HRA.