Public sector salaries: methodology

Panorama, in collaboration with the Bureau of Investigative Journalism, has carried out an extensive review of top public sector pay in the UK. Below is a detailed description of the methodology used in that process.

The database

The database contains the remuneration details of nearly 40,000 individuals working in the public sector who were paid £100,000 or more in the financial year 2009/10 or 2008/09. The details were culled from the replies to Freedom Of Information (FOI) requests which were sent by the Bureau of Investigative Journalism to around 2,400 public sector organisations. Where FOI responses were not forthcoming, or it was already in the public domain, annual reports and other official documents were consulted.

Freedom of Information requests

The FOI asked for the name, gender and pay details of every person in an organisation who is paid £100,000 or more according to the most recent data available. We also asked for information relating to any extra payments, bonuses and benefits in kind. Where it was clear we tried to exclude any redundancy and pension payments.

Defining the Public Sector

Defining the public sector is not easy. In 1999 the Public Administration Select Committee called for "greater clarity and consistency" to be brought to the "confusing network of bodies which play a crucial role in British Government". The Committee called for an annual 'map' of public bodies to be published.

In 2009 the House of Commons report into Top Pay in the Public Sector comments: "There is a lack of clarity about what constitutes the 'public sector'.

Matthew Flinders, Professor of Parliamentary Government and Governance at the University of Sheffield, wrote in an article in the Times that government needed to understand how far the public sector spreads: "First they have to map quangoland and establish who wields what power — and then clarify who should be responsible for what" going on to confirm: "The simple fact is that no one even knows how many quangos exist in Britain. A number of parliamentary inquiries and academic studies have attempted — and failed — to map the topography of the state beyond ministerial departments."

The Cabinet Office produces an annual list of what it calls non-departmental public bodies, some 766 in all. These are defined as bodies that "have a role in the processes of national Government, but is not a Government Department or part of one, and which accordingly operates to a greater or lesser extent at arm's length from Ministers"

According to the ONS many public sector organisations fall outside of this categorisation. The ONS itself is one such independent body accountable to Parliament but not to a specific department.

Quangos - as defined by the Public Administration Committee's report - are: "All bodies responsible for developing managing or delivering public services or policies, or for performing public functions, under governing bodies with a plural membership of wholly or largely appointed or self-appointing persons."

The list of organisations was drawn from the information available in the public domain, also including the recently released information relating to top public sector salaries released by the cabinet office.

The areas on which the database focuses are central government, local government, police, NHS (including GPs), the armed forces, emergency services, universities, the judiciary and quangos - quasi-government arms-length agencies that fulfil a public service role but are not directly controlled by government.

Exemptions

The UK National Accounts defines the public sector as comprising of central government, local government and public corporations; however this study excluded the larger public corporations such as Network Rail, Royal Mail, Channel 4, the Financial Services Authority and the publicly owned banks. These are operated as largely commercial organisations that focus on profit and raise a lot of their funding through the markets, government loans or commercial concerns and as such they are unrepresentative of the vast bulk of the rest of the public sector.

The following key organisations were exempted from the study:

Network Rail: There is ongoing debate about whether this is a private sector body. It has government investment in the form of loans, but it is run for a profit and referred to by government as a private company

Royal Mail: This has been transformed into a profitable organisation so the government can sell off part of it. It is not run as a public service

Crossrail: The large scale rail scheme that will traverse London is a £15.9bn project. It will get £5bn from the Department of Transport and a further £7.7bn will be raised through Transport for London (TfL), the remainder is will be provided by the private sector. In order to raise money in the private sector, an organisation has to act as a private business.

Channel 4: Receives no public money - it is funded through advertising.

Financial Services Authority: Receives no public money from the taxpayer.

Other exclusions

The earnings of freelance contractors - such as management consultants - have not been included because these staff are usually employed on temporary contracts. Where possible, the data avoided including those who worked only part way through the year.

Why we have included the BBC

The BBC is often excluded from analysis of public sector pay, however it is included it in this database. Although not directly funded by taxation it is funded by the licence fee and maintains a separate commercial arm (BBC Worldwide).

The BBC provides a public service and public funding is responsible for around 96% of its income. Its commercial arm contributes £145m to the business. This compares with the £3.5bn provided by the licence fee.

The BBC releases salaries in bands of £30,000, so it is not possible to give a definitive figure for those earning above the prime minister. The figures do not include amounts paid to talent.

Total remuneration

This database includes anyone - named or otherwise - earning a base salary of £100,000 or more. Total remuneration includes base fee plus any additional payments such as bonuses, extra pay or benefits in kind. Where possible we have excluded pension contributions from total remuneration.

The exception to this is the BBC executive board - total remuneration figures for those members also include payments made as part of a salary sacrifice scheme and employer pension contributions. They are included in the accounts as total remuneration. These are marked this with an *. However, the BBC has made it clear that these payments are under review and are likely to be withdrawn.

The other exception is hospital consultants. As stated below, their pay is made up of a number of elements. As a result those who had base pay, on- call supplements and payments for additional work that met or exceeded £100,000 were included. Clinical Excellence Awards were added in the extra pay column in the database.

Explanation of NHS Consultants' pay

Hours Worked: Consultants are paid on the basis of programmed activities (PAs). A PA during the week is four hours. The basic salary is based on a 10 PA week of 40 hours, but consultants often have the option to work more than this - the average according to the most recent BMA survey of consultants was 11.3 PAs.

On call supplement: Under the contract, consultants who are available on call for emergencies out of hours receive a supplement which varies from 1-8% of basic salary depending on the number of nights per week and weekends affected.

Payment for non-emergency additional work: All non-emergency work at evenings and weekends is by agreement only. Consultants are paid at time and a third (or PAs are reduced from four to three hours) for all work at weekends, and all work before 7am or after 7pm on weekdays. Consultants may also be approached for additional ad hoc work for their trust, for example under the Waiting List Initiative. There are no nationally agreed rates of pay for such work in England, and remuneration is locally negotiated.

Clinical Excellence Awards (CEAs): To encourage and support innovation in the NHS, consultants may apply for Clinical Excellence Awards, which are paid as additional salary.

Managerial Responsibilities: Many consultants also hold managerial positions, for example as Clinical Directors of trusts. Medical management positions are often classified and remunerated separately to the consultant contract through a "responsibility payment".

Salary provided in pay brackets

Many organisations provided us with salary information in pay bands. Where a salary band has been supplied instead of an exact salary, the mid-point in that range was taken to arrive at our total remuneration figure. Entries based on a salary band are marked with a *. Many responses referred to the number of individuals working at the organisation who earn over £100,000. In those instances, those individuals were entered as having a total remuneration of £100,000.

GPs Data

As GPs do not receive a salary we asked Primary Care Trusts to provide us with information from the Certificates of Pensionable Profits which are submitted to the HMRC at the end of each year. Due to the way this information is recorded, much of the GP information dates from 2007/8 or 2008/09.

Refusals

If an organisation has refused to release information to us we have submitted an appeal to overturn the decision. However this can be a long process and as a result many of our appeals are still pending.

Data inaccuracies

Any reported errors in the database will be verified and amended as soon as possible.

Some definitions

Central Government has been divided into ministerial departments and non-ministerial departments according to the latest Cabinet Office classification.

It also includes those working for the Welsh Assembly, Scottish Government and Northern Ireland Assembly.

Quangos - In absence of a definitive list of what is and is not a "quango", a list was drawn based on those bodies listed on the Cabinet Office's Public Bodies list.

Executive Agencies - Agencies which carry out executive, administrative or regulatory functions, examples include the Environment Agency and the Regional Development Agencies - are included.

Education - This is broken into Schools and Higher Education (including Universities). See below.

Schools - The information is from FOI responses and from council accounts for England where information on the salaries and numbers of teaching staff are listed. However, a number of councils do not separate council staff from teachers and as a result their replies were entered as council staff, even though some may be teachers.

Teachers' pay from Scotland, Wales and Northern Ireland was not available.

Higher Education - All universities in England, Wales, Scotland and Northern Ireland were approached for the pay details of their highest paid employees. However, both The London Business School and the Cass Business School were excluded as they receive only 8% or less of their funding from government.

NHS

This is broken down into hospital trusts (acute, mental health or where they have foundation status), Primary Care Trusts (PCT), Health Boards (for Scotland, Wales and Northern Ireland) Ambulance trusts, Strategic Health Authorities (SHA) and Care Trusts.

National breakdown

Figures have been compiled from the whole of the UK wherever possible; with the following exceptions:

Councils: Information from English single tier and county councils has been taken from 2009/10 accounts as these have largely been published in pre-audit form. However information for Scottish, Northern Irish, Welsh and district-level English councils mainly dates from 08/09.

Education: England only

Judiciary: The information received was not region specific, and combined England and Wales together. Therefore it was not possible to separate out which individuals relate to England and which to Wales. Separate information for Scotland and Northern Ireland is included.

Fire: UK-wide

NHS: UK-wide

Quangos: UK-wide