Pay in High Cost Areas

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Houses of Parliament

09 / 9 / 2016 Midday

High cost area supplements (HCAS) are paid to all NHS staff groups who are covered by the Agenda for Change agreement on working in inner and outer London and the fringe zones.

These supplements are expressed as a proportion of basic pay (including the value of any long term recruitment and retention premia) but are subject to a minimum and maximum level of extra pay. 

HCAS payments are pensionable.  They will not count as basic pay for the purposes of calculating the rate of overtime, unsocial hours pay or on call payments.

The current value of these payments is set out in the table below:

Area  Level (1 April 2016)
Inner London 20 per cent of basic salary, subject to a:
  • Minimum payment of £4,158 and a maximum payment of £6,405
Outer London 15 per cent of basic salary, subject to a:
  • Minimum payment of £3,518 and a maximum payment of £4,483
Fringe 5 per cent of basic salary, subject to a:
  • Minimum payment of £961 and a maximum payment of £1,665

More detail is available in Section 4 and Annexes H (Zones) and I (rates) of the NHS terms and conditions of service handbook.

Review of HCAS

In response to a recommendation from the NHS Pay Review Body,  the NHS Staff Council was asked to undertake a technical review of HCAS. Frontier Economics were commissioned to undertake this work and their report review of high cost area supplement was published on 24 September 2014. A copy has been sent to the NHS Pay Review Body.

The report finds no strong evidence to suggest that local recruitment and retention issues would be improved systematically by changing the current HCAS system. Frontier's analysis finds some evidence that relative pay affects a combined measure of recruitment and retention issues. However, when looking at any individual measure (such as staff turnover, vacancies and use of agency staff), there is no clear impact on relative pay. 


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