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Pay Settlements

Volume 455: debated on Friday 26 January 2007

To ask the Secretary of State for Health how the assumption of 2.5 per cent. for pay settlement and drift used to inform the pay, price and reform uplift to the tariff in 2007-08 was taken into account in determining the 1.7 per cent. increase in the tariff for pay; what definitions of pay settlement and drift she is using; and if she will make a statement. (114995)

The tariff uplift is based on the estimated increase in the cost of services within the hospital and community health service (HCHS) sector. The 2.5 per cent. increase in pay settlement and drift translates into a 1.7 per cent. increase in HCHS costs because pay represents around two-thirds of total HCHS costs.

Pay settlement is the level of pay increase awarded following the recommendation by pay review bodies. Pay drift is the increase in paybill beyond increases due to workforce growth, pay settlement and staff on-costs. For example, a decrease in workforce growth or improved staff retention may lead to pay drift due to a change in the distribution of staff between different incremental points on the pay scale.