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Area Cost Adjustment

Volume 404: debated on Monday 28 April 2003

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To ask the Deputy Prime Minister what New Earnings Survey data separating fringe and non-fringe areas in shire counties were used in his calculation of area cost adjustment. [109360]

The Office of the Deputy Prime Minister uses a number of different pieces of information from the New Earnings Survey in calculating the area cost adjustment in the fringe and non-fringe areas surrounding London. These are as follows:

  • gross hourly earnings excluding overtime
  • age
  • sex
  • industry
  • occupation
  • whether the worker is part time or full time
  • whether the worker is employed in the public or private sector
  • the year in which the earnings took place
  • loss of pay marker (whether the employee lost pay due to absents etc.)
  • adult rate marker (whether the employee is paid an adult rate for the job)
  • upper tier local authority
  • lower tier local authority.
A full guide to the ACA calculation is available on the Office of the Deputy Prime Minister website at http://www.local.odpm.gov.uk/finance/0304/acatechs.pdf

To ask the Deputy Prime Minister for what reasons he identified a separate area cost adjustment factor for fringe and non-fringe areas in shire counties.[109359]

The new area cost adjustment (ACA), recognises that authorities in the fringe areas around London face significantly higher wage costs than those in non-fringe areas. Examples of these increased costs are the inner and outer fringe payments made to teachers and other staff on national pay scales. These increased costs are mirrored in the ACA factors calculated by the Office of the Deputy Prime Minister.