Accountability report

Corporate governance report

Directors’ report

The HRA is a non-departmental public body, established in accordance with the Care Act 2014 and sponsored by the Department of Health and Social Care (DHSC).

Our relationship with DHSC, acting on behalf on the Secretary of State, is regulated by a Framework Agreement. This sets out:

• the respective roles and responsibilities of each organisation,
• the shared principles that underpin our relationship,
• the arrangements for ensuring DHSC can fulfil its responsibilities.

This agreement also explains our governance arrangements, how we are accountable for our performance and how DHSC measures our performance without being involved in our day-to-day decision making.

The DHSC’s Science, Research and Evidence Directorate acts as our sponsor and provides assurance to DHSC Permanent Secretary and the Secretary of State that we are meeting our obligations.

The HRA is fully compliant with relevant principles around governance best practice for public service as set out in Corporate governance in central government departments: code of good practice 2017.

HRA Board

We are governed by a Board that is our corporate decision-making body. The Board gives strategic oversight, agrees high level policy and ensures the HRA is run effectively and efficiently. It is made up of our Chair, Professor Sir Terence Stephenson, our Chief Executive, Dr Matt Westmore, two executive directors and four non-executive directors. Two directors attend the Board as non-voting members. We are committed to openness and transparency with our Board meetings which are held in public with all the papers and minutes available on our website.

The Board reviews performance at each meeting. The strategic performance report provides the Board with an overview of the status of the HRA business plan deliverables as well as management information relating to these objectives such as strategic risks, external developments and horizon scanning. This year we also introduced strategy delivery reporting, informed by our strategy pillars leadership teams drawn from the HRA Board and Executive Committee.

The Board is supported by two sub-committees: the Audit and Risk Committee and the Pay and Remuneration Committee. In 2023 we will introduce a new Community Committee.

Audit and Risk Committee

This committee advises the Accounting Officer and Board on risk management, corporate governance and assurance arrangements. It is made of three non-executive directors and two independent members. Individuals from the HRA and Government Internal Audit Agency are invited and regularly attend the committee.

The National Audit Office and KPMG, as external auditors for the HRA, also attend each meeting.

HRA Board membership and attendance

*Key: x/y: x is number of times the individual attended the Board or committee meetings and y is the number of meetings held.

Pay and Remuneration Committee

This committee makes decisions on senior executive salaries, their performance related pay and other terms and conditions. It also reviews arrangements for termination of employment, including termination payments. It is made up of the Chair of the Board and four non-executive directors.

Highlights of Board meetings in 2022-23

During 2022-23 the Board and its committees consider key strategic issues and routine business planning; the topics considered included:

• our strategy 2022-25
• our business plan and budgets 2022-23 and 2023-24
• annual report and accounts 2021-22
• strategic performance reports including finance reports
• updates from the HRA Audit and Risk Committee
• HRA website accessibility audit
• environmental sustainability strategy
• Research Ethics Service in England annual report
• Confidentiality Advisory Group annual report
• annual review of complaints, feedback and information
• feedback from Staff Voices representatives on matters affecting staff
• annual staff survey
• HRA achievements and key messages for stakeholders
• strategic and key operational risks and risk appetite for the organisation
• updates to the risk management process
• Board effectiveness review
• proposal to set up a Community Committee

The Board improves its performance and effectiveness through seminars. During 2022-23 seminars included:

• Think Ethics – putting people and ethics at the heart of health and social care research
• Confidentiality Advisory Group (CAG) – annual review attended by CAG Chair
• user centred design and what it means for our research systems programme
• an update on our data and artificial intelligence activities
• joint workshop with members from our Public Involvement Network to explore feedback from the HRA‘s strategy launch
• strategic scenario planning, including what we could do if our funding was significantly reduced
• how the HRA can help improve UK competitiveness attended by Sir John Bell (Regius Chair of Medicine at the University of Oxford)
• striking the balance between making it easy to do research and ensuring research is trustworthy attended by Professor Adam Tickell

Any expenses claimed by Board members are published on the HRA website, alongside minutes and papers from the Board meetings

Summary of the Board effectiveness review

Our Board effectiveness was reviewed in November 2022 by the Government Internal Audit Agency. The review found the Board has the structure, processes, people and performance to deliver its statutory duties effectively. The requirements of the Code of Good Practice for Corporate Governance, where relevant for the HRA as a Non-Departmental Government Body, are being met and the required responsibilities are being suitably carried out. Several opportunities to improve the effectiveness of the Board were identified. These include:

• setting a vision statement which explains what the Board is aiming to achieve, how and by when to support a shared understanding across members on strategic priorities and the capacity and pace needed to achieve these
• further development of the Board’s forward agenda to take account of this vision statement to allow sufficient time to address these priorities
• work with the Department of Health and Social Care’s sponsor team to put together a strategy for succession planning so that HRA does not lose valuable non-executive directors’ insight when it is needed

Executive Committee

The Executive Committee is the senior executive decision making body responsible for managing our business within agreed objectives, funding and our Framework Agreement. The Executive Committee is accountable to the Chief Executive.

It is responsible for ensuring an effective connection between executive to Board business and the formulation of HRA strategy.

The Executive Committee has delegated responsibility to the individual directors for the management of day-to-day organisational business, and to the Portfolio Delivery Group for the management of the HRA’s change activities. These are within agreed objectives, funding and according to the HRA/DHSC Framework Agreement and standing orders.

Statement of Accounting Officer’s responsibilities

Under the Care Act 2014, Section 109 (Schedule 7, paragraph 20) the Secretary of State has directed the HRA to prepare a financial statement of accounts for each year in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the HRA and of its income and expenditure, statement of financial position and cash flows for the financial year.

In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual issued by HM Treasury and in particular to:

• observe the Accounts Direction issued by the Secretary of State, with the approval of HM Treasury, including the relevant accounting and disclosure requirements and apply suitable accounting policies on a consistent basis
• make judgements and estimates on a reasonable basis
• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed and disclose and explain any material departures in the accounts
• prepare the accounts on a going concern basis
• confirm that the annual report and accounts as a whole is fair, balanced and understandable
• confirm that the Accounting Officer takes personal responsibility for the annual report and accounts and the judgements required for determining that it is fair, balanced and understandable

The Accounting Officer for DHSC has appointed the Chief Executive as Accounting Officer for the HRA. The responsibilities of an Accounting Officer are set out in Managing Public Money published by the HM Treasury. These include responsibility for the propriety and regularity of the public finances, for keeping proper records and for safeguarding HRA’s assets.

As far as the Chief Executive is aware, there is no relevant audit information of which the entity’s auditors are unaware and the Chief Executive has taken all the steps that they ought to have taken to make them aware of any relevant audit information and to establish that the entity’s auditors are aware of that information.

Risk management system

We want to make the most impact from our operations within our available resources. An effective risk management system supports this without stopping innovation. This requires considering a full cross section of risks we face including reputational risks, financial risks, organisational risks, health and safety risks and risks to the achievement of the organisation’s objectives.

Our strategic risk register captures the high-level significant risks which could impact on the delivery of our strategy and statutory functions. This is reviewed at each Audit and Risk Committee and regularly at the Board. Each directorate, individual governance teams and programme boards, hold their own risk registers and review these on a regular basis. Any significant risks are escalated to the Executive Committee for discussion and further escalation to Audit and Risk Committee, HRA Board and DHSC sponsor team as required. A risk engagement framework is in place to support our risk management culture including:

• sharing the risk appetite from the Board with staff and looking at what assurance is in place to address key risks affecting the organisation
• ensuring there is appropriate risk related training for staff
• sharing of feedback and good practice throughout the year

Risk management delegated responsibilities

All staff have a role to play in managing risk throughout the HRA. We make sure staff can perform their role through providing relevant information, guidance and training.

Governance structure

In addressing issues relating to risk, we seek to be as transparent and open as possible. We identify and address those areas where there is a need for improvement in the risk management processes or controls and contingencies.

The internal audit function forms part of the review process and provides assurance on the risk management process and advises the Audit and Risk Committee and Accounting Officer.

Information governance

The HRA has an established information governance structure:

• the Board has designated the Deputy Chief Executive and Director of Resources as Senior Information Risk Officer (SIRO) with responsibility for the system of safeguarding and protecting personally identifiable, confidential and sensitive data
• the information governance lead is also the Deputy Chief Executive and Director of Resources
• Jonathan Fennelly-Barnwell, Deputy Director of the Approvals Service is the Caldicott Guardian
• Stephen Tebbutt, Company Secretary is the Data Protection Officer
• Directors and senior managers are Information Asset Owners (IAOs) as appropriate

The Information Governance Steering Group (IGSG) is a formal sub-committee of the Executive Committee. Its purpose is to co-ordinate, supervise and review the work of others to make sure we maintain a co-ordinated approach to information governance. It meets four times a year and puts in place assurance processes that consider information governance issues to enable continuous improvement.

Data security risks are managed and monitored within the overall risk management framework, the HMG Security Policy Framework, overseen by the information governance lead and IGSG to ensure security threats are followed up and appropriately managed. We are committed to the 10 steps to cyber security and the National Data Guardian’s Data Security Standards.

No data security incidents have been reported to the Information Commissioner's Office (ICO) during the year.

We have introduced additional skills and capabilities to support our cyber resilience, including a Technical Architect and Cyber Security Lead. A new monitoring report is reviewed by IGSG, providing assurance that cyber security controls are sufficient to prevent information security threats.

All information assets and associated systems are identified and included in our Information Asset Register and are assessed annually. These assessments inform the Corporate and Information Risk Registers and help ensure we conform to data protection legislation.

We have also completed the Data Security and Protection Toolkit this year and met all mandatory requirements.

The system of internal control

As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control, which has been in place for the period 1 April 2022 to 31 March 2023 and up to the date of approval of the annual report and accounts, in accordance with HM Treasury guidance.

The Executive Committee, which I lead, reviews and monitors progress with other management groups providing input as required. These include Portfolio Delivery Group, Recruitment Panel and Digital Strategy and Prioritisation Group.

Senior managers who have responsibility for the development and maintenance of the system of internal control provide me with assurance. The assurance framework itself provides me with evidence that the effectiveness of controls that manage the risks to the organisation achieving its principal objectives have been reviewed and this aspect of our activities has been subject to external review.

Our business plan 2022-23 has been developed and approved by the Board which sets out our clear purpose and business objectives to deliver our strategy and statutory functions.

Our controls assurance and risk management processes are closely aligned to the twin objectives of maintaining ongoing activities and managing significant transformation activities.

Reports are provided to the Board every three months on achievements and progress against the objectives and plans, and these reports include risks and controls in place to mitigate them.

The effectiveness of the system of internal control is reviewed by our internal auditors who plan and carry out a workplan approved by the Audit and Risk Committee. When weaknesses are identified, these are reported to the Audit and Risk Committee and an action plan agreed with management to address these. This year, our overall internal audit assurance opinion has reduced. Although it remains moderate, it is at the lower end of the scale.

Our governance and risk management processes remain strong however our control processes need improvement, specifically our procure to pay and data security and protection processes. To address this, we are putting in place improved checking and assurance regimes, better guidance and process development and clarifying roles and responsibilities. This includes introducing purchase orders for all our contracted expenditure, reviewing open purchase orders and monitoring a sample of contracts. Measures put in place this year, following the review of our data security and protection processes have already improved the assurance rating for 2023.

Our external auditors attend Audit and Risk Committee to keep informed of the design and operation of the systems of internal control. The Head of Internal Audit provides me with an opinion, in accordance with Public Sector Internal Audit Standards, on the overall adequacy and effectiveness of the HRA’s risk management, control and governance processes.

Functional standards

We must apply and adhere to the UK Government functional standards in our processes and services. These standards help create a coherent, effective and mutually understood way of doing business within public bodies. They provide a stable basis for assurance, risk management and capability improvement. In 2022-23 we worked to embed the mandatory standards across our functions including project delivery, finance and counter fraud, bribery and corruption. We will continue to put in place the mandatory standards across all relevant standards in 2023-24 as well as begin to implement the advisory standards.

Compliance with NHS Pension Scheme regulations

As an employer with staff entitled to membership of the NHS Pension Scheme, control measures are in place to ensure all employer obligations contained within the scheme regulations are complied with. This includes ensuring that deductions from salary, employer contributions and payments into the scheme are in accordance with the scheme rules and that member pension scheme records are accurately updated in accordance with the timescales detailed in regulations.

Head of Internal Audit opinion 2022-23

In accordance with the requirements of the UK Public Sector Internal Audit Standards, I am required to provide the Accounting Officer with my annual opinion of the overall adequacy and effectiveness of the organisation’s risk management, control and governance processes.

My overall opinion is that I can give a Moderate assurance to the Accounting Officer that the HRA has had adequate and effective systems of control, governance and risk management in place for the reporting year 2022-23.

I have provided a Moderate assurance because overall governance and risk management arrangements are broadly effective however there is room for improvement regarding the HRA control framework. My overall Moderate opinion is on the lower end of the scale and the improvements points highlighted in my report are about getting the basic controls right through improving compliance and checking of controls, by having better guidance and processes in place and clarity of roles and responsibilities.

Declaration of interests

The HRA maintains a formal register of Board members’ interests as set out in the Code of Accountability for the NHS.

Board members are asked to confirm any declarations of interest at each Board meeting and at any time that changes take place. This includes any interests in relation to specific items on the Board agenda. Board members are also asked to declare any spouse or partner interests.

The register, showing current declarations made by the Board, is updated on a regular basis and made available to the public on the HRA website at www.hra.nhs.uk/about-us/governance/ publication-scheme/list-and-registers

Remuneration to auditors

The accounts have been prepared according to accounts direction of the Secretary of State, with approval of HM Treasury. The accounts have been audited by the Comptroller and Auditor General under the Care Act 2014 at the cost of £51,000 (2021-22 £43,000). The audit certificate can be found on page 52.

Remuneration and staff report

Remuneration Policy

The Chair and Non-Executive Director Board members are remunerated in line with DHSC guidance that applies to all NHS bodies.

Details of the senior managers’ remuneration, given in the following tables, are set and reviewed in line with DHSC guidance Pay Framework for Executive and Senior Managers (ESM) in Arm’s Length Bodies.

Senior managers employed under the ESM framework are under stated contracts of employment on terms and conditions as set out by NHS employers.

All those contained in the senior managers’ remuneration table below are subject to annual appraisals on their performance.

Remuneration and pension for Directors (subject to audit):

Chair and Non-Executive Directors

* Professor Sir Terence Stephenson is not paid directly by the HRA. His salary isnpaid by University College London and then recharged to the HRA on a costrecovery basis.

** Pension benefits accrued during the year are calculated on the real increase in pension multiplied by 20, less the contributions made by the individual. The real increase excludes increases due to inflation that will be received by the individual.

It is a calculation that is intended to convey to the reader of the accounts an estimation of the benefit that being a member of the pension scheme could provide. The pension benefit table provides further information on the pension benefits accruing to the individual.

Directors

Note 1 – Kurt Weideling was employed as Chief Digital Transformation Officer (CDTO) from 02/11/20 to 29/08/21. His full year equivalent salary was between £110,000 and £115,000. Helen Ainsbury was employed as Interim CDTO via an agency as a temporary off-payroll worker in 2021-22. Her full year equivalent salary was between £260,000 and £265,000. Ian Robinson was employed as CDTO from 24/01/22 to 22/08/22. His full year equivalent salary was between £110,000 and £115,000. Julie Waters was Interim CDTO from 01/08/22 allowing for a short handover period. Her full year equivalent salary was between £90,000 and £95,000.

Note 2 – An organisational change in 2021-22 led to the Director of Transformation and Corporate Services being disestablished. The total exit package was £107,000; comprised of £67,000 redundancy cost, included in 2021-22 financial year when the decision was made and £40,000 payment in lieu of notice, included in 2022-23, aligned with the notice period.

Note 3 – Juliet Tizzard was employed as Director of Policy and Partnerships until 22/07/22. Her full year equivalent salary was between £100,000 and £105,000.

Becky Purvis took on the role of Interim Director of Policy and Partnerships on 27/06/22 and following a competitive external recruitment process was appointed to the role permanently from 01/11/22. Her full year equivalent salary was between £90,000 and £95,000.

Directors

Ian Cook left the NHS Pension Scheme during 2020-21 in line with reporting guidance, no pension benefit disclosures have been presented in the tables above.

Ian Robinson left with less than 2 years qualifying membership and received a refund of contributions he paid in this time. The figures shown in the tables above reflect the net impact of the changes to his entitlement that occurred during the year and the refund of contributions that had been made. As a result of his withdrawal and refund Ian had no accrued lump sum or CETV at 31 March 2023.

CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2023. HM Treasury published guidance on 27 April 2023; this guidance will be used in the calculation of 2023-24 CETV figures.

Cash Equivalent Transfers

A Cash Equivalent Transfer (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s (or other allowable beneficiary’s) pension payable from the scheme. CETVs are calculated in accordance with SI 2008 No.1050 Occupational Pension Schemes (Transfer Values) Regulations 2008.

Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation or contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement).

Pay Ratio Information (subject to audit)

Reporting bodies are required to disclose the relationship between the remuneration of the highest paid director or member in their organisation against the 25th percentile, median and the 75th percentile of remuneration of the organisation’s workforce. Total remuneration is further broken down to show the relationship between the highest paid director director’s salary component of their total remuneration against the 25th percentile, median and the 75th percentile of salary components of the organisation’s workforce.

In 2022-23, the banded annualised remuneration of the highest paid director was £135,000 to £140,000 (2021-22, £260,000 to £265,000). The relationship to the remuneration of our workforce is disclosed in the table below.

The significant decrease in highest paid director’s remuneration is due to interim digital leadership arrangements put in place at pace in 2021-22 while we recruited to the permanent role. The actual salary received by the interim post holder has a midpoint of £107,500, and the annualised full year equivalent mid-point salary was £262,500. In 2022-23 the highest paid director was the Chief Executive.

All ratios are showing a significant decrease from last year due to the temporary doubling of the highest paid director’s remuneration and salary in 2021-22 while permanent arrangements were put in place.

Remuneration range

No employees received remuneration more than the highest paid director. For all employees, total banded remuneration ranged from £25,000 - £30,000 to £135,000 - £140,000 (2021-22: £20,000 - £25,000 to £260,000 - £265,000).

Total remuneration includes salary, non-consolidated performance-related pay and benefits-in-kind, but not severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions.

Percentage change from previous financial year in respect of highest paid director

The decrease in the highest paid director’s remuneration is due to interim digital leadership arrangements put in place at pace in 2021-22 while we recruited to the permanent role.

Average percentage change from previous financial year in respect of all employees (excluding the highest paid director)

Performance pay awards

The HRA does not make performance pay or bonus payments to staff on agenda for change terms and conditions. Staff employed on executive and senior managers (ESM) contracts can be awarded non-consolidated performance related pay award at the discretion of the Pay and Remuneration Committee. Details of these payments can be found in the remuneration report.

No non-consolidated performance related pay awards were made in 2022-23. During 2021-22 one Executive Director received a non-consolidated performance related pay award.

Staff on agenda for change terms and conditions received a consolidated pay award of £1,400 (pro-rated) during 2022-23. On 02/05/23 the NHS Staff Council formally accepted an additional pay offer for staff on agenda for change terms and conditions in England. The pay offer includes a non-consolidated payment for 2022-23, made up of two parts, a 2% pay award for all staff plus an additional “backlog bonus” of at least £1,250. These pay awards combined have increased median pay by £3,461 (10.1%) in 2022-23 to £37,633. If the non-consolidated pay award is excluded, then median pay has increased by £1,400 (4.1%) in 2022-23 to £35,572.

The agenda for change non-consolidated pay award for 2022-23 has been included within the 'Performance pay and bonuses' category above due to its one-off nature.

The large % increase in this category in 2022-23 is due to the pay award being received by all staff on agenda for change terms and conditions, whereas in 2021-22 only one Executive Director received a non-consolidated performance related pay award.

Staff report

Early retirements and redundancies (subject to audit)

There were 14 exit packages agreed during the year ending 31 March 2023 (2021-

22; three, £152,432).

Redundancy and other departure costs have been paid in accordance with agenda for change terms and conditions. The table below shows the total cost of exit packages agreed and accounted for in 2022-23 (2021-22 £152,432). In 2022-23 exit costs of £215,429 were paid in the year of departure (2021-22 £17,550). The other departure costs agreed £48,673 are contractual payments in lieu of notice.

The amounts are due to the individuals and do not include the employers’ National Insurance contribution on the payments. These payments are included within the social security costs in the staff note. Additional costs of agreed early retirement are met by the HRA and not by the NHS Pension Scheme.

Ill health retirements costs are met by the NHS Pension Scheme and are not included in this table. There are no redundancy payments that are special payments.

One exit payment made, with combined redundancy cost £66,667 and payment in lieu of notice £40,065 of £106,732 required DHSC Governance and Assurance Committee (GAC) approval. This approval was sought retrospectively in May 2023 following a change to the approved payment in lieu of notice which meant the total amount paid exceeded £100,000. The Committee carefully considered our case and retrospectively approved the total redundancy of £106,732 on 22 June 2023.

Analysis of staff costs (subject to audit)

The costs and average numbers of staff include the costs of staff employed by other organisations that are recharged to the HRA. These are included within the ‘other’ column. These figures include social security costs and employer contributions to the NHS Pensions Authority.

The average number of FTE persons employed during the year (subject to audit)

Staff turnover was 17.5% during 2022-23 (2021-22: 11.5%). (Unaudited)

Retirements due to ill health

This note discloses the number and additional pension costs for individuals who retired early on ill-health grounds during the year. There were no such retirements in the year to 31 March 2023 (£nil 2021-22). This information has been supplied by NHS Pensions Authority.

Pension costs

Past and present employees are covered by the provisions of the two NHS pension schemes.

Details of the benefits payable and rules of the schemes can be found on the NHS pensions website at www.nhsbsa.nhs.uk/pensions

Both are unfunded defined benefit schemes that cover NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State for Health and Social Care in England and Wales. They are not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, each scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS body of participating in each scheme is taken as equal to the contributions payable to that scheme for the accounting period.

In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by formal actuarial valuation, from FReM requires that 'the period between formal valuations shall be four years, with approximate assessments in intervening years'.

An outline of these follows:

a) Accounting valuation

A valuation of scheme liability is carried out annually by the scheme actuary (currently the Government Actuary’s Department) as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period, and is accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2023 is based on valuation data at 31 March 2021, updated to 31 March 2023 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and discounts rate prescribed by HM Treasury, have also been used.

The latest assessment of liabilities of the scheme is contained in the report of the scheme actuary, which forms part of the NHS Pension Scheme accounts. These accounts can be viewed on the NHS pensions website and are published annually. Copies can be obtained from The Stationery Office

b) Full actuarial (funding) valuation

The purpose of this valuation is to assess the level of liability in respect of the benefits due under the schemes (considering recent demographic experience), and to recommend contribution rates payable by employees and employers.

The latest actuarial valuation undertaken for the NHS Pension Scheme was completed as at 31 March 2016. The results of this valuation set the employer contribution rate payable from April 2019 to 20.6% of pensionable pay.

The 2016 funding valuation also tested the cost of the scheme relative to the employer cost cap that was set following the 2012 valuation. There was initially a pause to the cost control element of the 2016 valuations, due to the uncertainty around member benefits caused by the discrimination ruling relating to the McCloud case.

HM Treasury published valuation directions dated 7 October 2021 (see amending directions 2021) that set out the technical detail of how costs of remedy are included in the 2016 valuation process. Following these directions, the scheme actuary has completed the cost control element of the 2016 valuation for the NHS Pension Scheme, which concludes no changes to benefits or member contributions are required.

The 2016 valuation reports can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/nhs-pension-scheme-accounts-and-valuation-reports

Off payroll engagements

Following the review of tax arrangements of public sector appointees published by the Chief Secretary to the Treasury on 23 May 2012, we must publish the following tables of information on our highly paid or senior off-payroll engagements.

Table 1: For all off-payroll engagements as of 31 March 2023, for more that £245 (see note 1) per day:

Note 1 – The £245 threshold is set to approximate the minimum point of the pay scale for a Senior Civil Servant.

We can confirm that all existing off-payroll engagements have at some point been subject to a risk-based assessment as to whether assurance is required that the individual is paying the right amount of tax and where necessary, that assurance has been sought.

Table 2: For all off-payroll engagements between 1 April 2022 and 31 March 2023, for more that £245 (see note 1) per day:

Note 1 – The £245 threshold is set to approximate the minimum point of the pay scale for a Senior Civil Servant

Note 2 – A worker that provides their services through their own limited company or another type of intermediary to the client will be subject to off-payroll legislation and the HRA must undertake an assessment to determine whether that worker is in-scope of intermediaries legislation (IR35) or out-ofscope for tax purposes.

Table 3: For any off-payroll engagements of Board members and / or senior officials with significant financial responsibility between 1 April 2022 and 31 March 2023:

Consultancy expenditure

For the year ended 31 March 2023 the HRA spent £6,763 on consultancy (2021-22: £nil).

Sickness absence data

Statistics produced by the Health and Social Care Information Centre (HSCIC) from Electronic Staff Record (ESR) Data Warehouse.

Period covered: January - December 2022

• Employee Self Service (ESR) is the system we use for time and attendance management. It does not hold details of the normal number of days worked by each employee. Data on days lost and days available produced in reports are based on a 365-day year
• the number of Full-Time Equivalent (FTE) days lost to sickness absence has been estimated by multiplying the estimated FTE days available by the average sickness absence rate
• the average number of sick days per FTE has been estimated by dividing the estimated number of FTE-days sick by the average FTE
• sickness absence rate is calculated by dividing the sum total sickness absence days (including non-working days) by the sum total days available per month for each member of staff)

Equality, diversity and inclusion (EDI)

We know the HRA is working at its best when our people feel they belong and are valued for who they are, and that they see this borne out in their daily experience of the organisation.

In 2022/23, we:

• reduced our median gender pay gap by 2.7 percentage points, from 12.4% to 9.7%. Our mean gender pay gap has reduced by 2.3 percentage points from 8.3% to 6.0%
• made significant progress on six key staff survey inclusivity measures for disabled staff, seeing uplifts in satisfaction of between 5 and 42 percentage points
• saw a three-fold increase in the number of minority ethnic staff in leadership roles, although we still lack ethnic diversity at the highest levels
• increased staff disclosure of lesbian, gay, bisexual and other minority sexual orientations from 3% to 8%
• overhauled our recruitment policy and practices to make it as easy as possible to attract high quality applications and make high quality recruitment decisions, free from bias
• marked key diversity dates with a series of blogs to highlight exciting research projects focussed on addressing health inequalities
• developed a dignity and respect policy with supporting guidance including a video on respect at the HRA to be used in staff and membership inductions
• trained a group of menopause champions and delivered menopause awareness sessions to support engagement with our menopause at work policy
• continued to engage our staff-led interest groups in steering the implementation of our equality, diversity and inclusion priorities and shaping future plans

Equality information for staff

We publish gender pay information showing the difference in average earnings between women and men. The results for 2023 show that the average hourly rate is 6.0% higher for men with the median being 14.6% higher (2022 average hourly rate 8% higher and median 12% higher). This does not mean that men get paid more than women for doing the same job, the NHS pay grade structure (also known as Agenda for Change) and employment practices we use mean this isn’t possible.

Pay progression is tied to length of service, so some additional analysis on the intersection of length of service and gender was completed. Women are more likely to have a longer length of service, so the next step will be to look at length of service by pay band as well as gender, to understand this picture more clearly.

The lower average pay for women relates to gender distribution across pay quartiles. Women are overrepresented at all levels of the organisation, but less so in the most highly paid roles.

We are pleased that women are well represented across the workforce but appreciate more can be done to address this gap. We will be taking action through the Board and Staff Voices (staff forum), and learning from other organisations, to help us reduce this difference.

We publish diversity information on the Equality, Diversity and Inclusion Strategy page of our website.

Our gender pay gap data is also published on the gov.uk website.

Health, safety and welfare

We embrace health, safety and welfare as an integral part of our culture. We are committed to the fundamental right of all staff to work in a safe and healthy environment and to an integrated approach to identifying and mitigating associated risks.

Managers and staff are supported by comprehensive health, safety and welfare arrangements including an Estates Strategy Group which incorporates our Health, Safety and Welfare Committee (HSWC), comprehensive policies and procedures and access to expert advice. We encourage our employees to report accidents or instances of work-related ill health so we can identify trends and to inform on our health and safety performance.

We are pleased to report that we have had no reportable incidents, the same as last year. The HSWC is satisfied that if an incident were to occur it would be known immediately and reported.

No reports were made under Reporting Injuries, Diseases and Dangerous Occurrences Regulations 2013.

Trade union recognition

We have a well-established and embedded staff forum (Staff Voices) and a formal partnership with Unison and Managers in Partnership. The Joint Negotiating Committee has formally met 4 times. During the year 5 members of staff (4.8 FTE) were union officials at the HRA.

Pension Liabilities

Past and present employees of the HRA are covered by the provisions of the NHS Pensions Scheme. Page 43 of the annual report presents how pension liabilities have been treated.

Parliamentary accountability and audit report

This section provides other information disclosed in the public interest and is subject to audit.

Remote Contingent Liabilities

There are no known material remote contingent liabilities.

Regularity of Expenditure: Losses and Special Payments

For the year-ended 31 March 2023 the Health Research Authority incurred 5 losses totalling £981 (2021-22 £29,684). No special payments were made during the year.

Dr Matthew Westmore
Chief Executive
Health Research Authority
4 July 2023