Local clinical excellence awards How to ensure your

Local clinical excellence awards How to ensure your organisation has allocated the minimum level of funds for investment in LCEAs (2018 -2022)

Calculating the minimum funds for investment As set out in Schedule 30 of the Terms and conditions of service for consultants - England (2003), the formula for calculating the minimum funds for investment in new awards each year between 1 April 2018 and 31 March 2022 (four annual award rounds) is Number of eligible consultants x investment ratio x unit value of an award Each element of the formula is dynamic, the number of eligible consultants in an organisation is unlikely to remain static year on year, the investment ratio has been subject to change and the unit value of an award has been updated following DDRB recommendations. The funds for investment are cumulative over the four year period. This build up in the level of investment awards reflects previous investment levels as awards were paid on a consolidated basis until retirement. Under the new arrangements awards are time limited and non-consolidated allowing for reinvestment of the released funds when the award ends. The released funds are then added to the new awards investment for the following year up to 2021/22.

Calculating the minimum funds for investment This slide pack set out the steps employers should follow to ensure that they have calculated the necessary funds for investment over the four years covered by the interim arrangements. We have deployed an updated method of calculation to simplify the process for employers*. Employers will need to identify their actual spend over the first three years against these calculations. Should there be any discrepancies in the level of spend then these should be rectified during the 2021/22 award round (under the equal distribution approach). Employers do not need to retrospectively adjust the value of awards made to consultants in previous years. The LCEA arrangements from 1 April 2022 have yet to be agreed and will be communicated in due course. *See FAQ Q 1 under Local clinical excellence awards FAQs > COVID-19 and 2021 -22 award round.

Eligibility criteria Consultant contract reform • The terms “eligibility” or “eligible consultant” can be defined in two ways depending on purpose – Eligibility or eligible consultant for the purposes of determining who can apply for an award and the criteria that they must meet – Eligibility or eligible consultant for the purposes of calculating the funds for investment in LCEAs • There is a degree of local discretion when applying the former but the latter definition must be applied as per schedule 30 of the 2003 TCS and cannot be varied.

Eligibility criteria for the purposes of calculating the funds for investment in LCEAs • Eligible consultants should have at least one year’s service at consultant level and not hold an Employer Based Level 9, a National Clinical Excellence Award or a Distinction Award. Consultants on fixed term contracts are eligible for the purposes of calculation and to receive an award. • Exclusions – there is no requirement that these eligible consultants need to be on 2003 TCS when calculating the funds for investment, with the exception of agency locum consultants, who should be excluded from the calculations. They are also not eligible to receive award funds. • Consultant clinical academics (CCAs) employed on honorary contracts - where they have previously had access to LCEA arrangements, it is expected that they would continue to be considered as eligible to receive an award. Where CCAs are deemed eligible to apply they should be included in the funding calculations (as otherwise this would dilute the funding pot). • Those consultants eligible to receive an award during 2018 -22 are set out in Schedule 30 of the Terms and Conditions - Consultants (England) 2003.

Investment ratio • Consultant contract reform The investment ratio for the years 1 April 2018 to 31 March 2022 for LCEAs rounds are as specified below. Year Additional Funding Ratio Cumulative Funding Ratio (points per eligible consultant) (points per eligible consultant for that year) 2018 -2019 0. 3 2019 -2020 0. 3 0. 6 2020 -2021 0. 424 1. 024 2021 -2022 0. 218 1. 242 The cumulative build up in the level of investment over the four year period reflects previous investment levels (prior to 2018) as awards were paid on a consolidated basis until retirement. • The investment ratio is one element of the calculation formula required to determine the level of investment in LCEAs. Full details of the calculation formula for each year is set out in the following slides.

2018 -19 award round Consultant contract reform A Calculate the number of eligible consultants* (FTE) as at 1 April 2018 B Multiply the number of eligible consultants (FTE) by 0. 30 (the investment ratio) C Multiply that figure by the unit value of an employer based award (set at £ 3, 016**) * Eligible consultants should have at least one year’s service at consultant level and not hold an Employer Based Level 9, a National Clinical Excellence Award or a Distinction Award. ** As set out in the Pay and Conditions Circular (M&D) 3/2018. The value of an award is subject to DDRB recommendations accepted by the government Note: Any underspend/overspend in 2018/19 should be identified and carried forward into 2021/22

2019 -20 award round A B C Consultant contract reform Calculate the number of eligible consultants (FTE) as at 1 April 2019 Multiply the number of eligible consultants (FTE) by 0. 60 (the cumulative investment ratio) Multiply that figure by the unit value of an award (£ 3, 092*) * As set out in the Pay and Conditions Circular (M&D) 2/2019 Note: Any underspend/overspend in 2019/20 should be identified and carried forward into 2021/22

2020 -21 award round A B C Consultant contract reform Calculate the number of eligible consultants (FTE) as at 1 April 2020. Multiply the number of eligible consultants (FTE) by 1. 024 (the cumulative investment ratio) Multiply that figure by the unit value of an award (£ 3, 092*) The 2020/21 LCEA round was halted as a result of the COVID-19 pandemic, with the award money to be distributed equally among eligible consultants. See the joint statement from NHS Employers, the BMA and HCSA. * As set out in the Pay and Conditions Circular (M&D) 2/2020 Note: Any underspend/overspend in 2020/21 should be identified and carried forward into 2021/22

2021 -22 award round Consultant contract reform A Calculate the number of eligible consultants (FTE) as at 1 April 2021. B Multiply the number of eligible consultants (FTE) by 1. 242 (the cumulative investment ratio) C Multiply that figure by the unit value of an award (£ 3, 092*) D Add/deduct any underspend/overspend from 2018/19 - 2020/21 E Available investment to be equally distributed among eligible consultants**, ensuring the total value of those awards is no less than the calculation above * As set out in the Pay and Conditions Circular (M&D) 2/2020. This may be updated following the 2021 DDRB recommendations accepted by the government (expected to be published in September 2021) ** The 2021/22 LCEA round was again halted as a result of the COVID-19 pandemic, with the award money to be distributed equally among eligible consultants. See the joint statement from NHS Employers, the BMA and HCSA.

Additional items to note • The tables focus on award spend and does not include oncosts to the employer. • The funding for reversions from existing National Clinical Excellence Awards to existing Local Clinical Excellence Awards are funded from outside the minimum investment requirements for the 2019, 2020 and 2021 Award rounds. • Please note – the slides are intended to support you to check trust level spend. You do not need to check or deduct from any past payments to individuals based on the change to an FTE calculation this.

Ensuring the full allocation of funds are distributed by the end of 2021/22 • The tables represent the calculations that trusts should do for each year to calculate their annual minimum investment funds. This should be mapped against actual spend in each of the first three years (2018 -20) • Any underspend/overspend can be taken into account when calculating the investment funds available in fourth year (2021/22). • As the DDRB review the unit value of an award annual (currently £ 3, 092) we will need to wait for the Government’s response to this year’s DDRB report before finalising the calculations for 2021/22. We expect to publish this information in an updated Pay Circular in September 2021. • The investment funds will be distributed equally among eligible consultants in 2021/22 as set out in the joint statement from NHS Employers, the BMA and HCSA. Those eligible consultants working less than full time should receive an equal value award to those working full time.

Further information • NHS Employers website Local clinical excellence award (LCEA) arrangements | NHS Employers • Employer mailbox for any LCEA queries doctorsanddentists@nhsemployers. org