Clinical excellence awards (CEA) agreement negotiations

This guidance covers questions on the CEA agreement, including what it means if your employer has failed to run awards rounds in the past or if it will in the future. We also cover how it affects your pension.

Location: England
Audience: Consultants
Last reviewed: 18 February 2022
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About the proposed new LCEA scheme

Read about the proposed new LCEA scheme and why the BMA have not agreed it.

About funding

What will happen with funding

Following previous action taken by the BMA, the money is a clear contractual element of pay. It cannot be removed and must remain part of the overall package of consultant’s pay. What has not been agreed is a national scheme that sets out how the award process will be run.

How much the awards were worth

It’s worth reiterating that the money has not gone anywhere and needs to be spent on consultants pay. However, an explanation of the background to investment in the scheme may be helpful. Trusts which ran rounds (which, again, was increasingly fewer before the 2018 agreement) usually paid out a number of points per eligible consultant (e.g. 0.20 points per eligible consultant) each year. The number of new awards was not impacted by the number of existing CEA holders within the trust. This meant that consultants across England had an equity of opportunity to compete for new awards. As part of the 2018 agreement, the full investment pot of more than £400 million was contractually secured and expressed as £7.9k per FTE identified as expenditure and started to include all of the CEAs paid at that time.

In this round of negotiations, NHS England were adamant that rather than trusts in effect having a separate allocation of funds it could disperse for new awards, irrespective of the number of existing awards in payment, they insisted that trusts must pay for both existing and new awards from the same funding allocation. This meant that Trusts would have wildly varying amounts of money to spend depending on numbers of existing award holders.

To make matters worse, it is the trusts where there are large number of existing award holders, who are more likely to be older white men, where there would be limited funding available for new awards. This meant that in these trusts, younger consultants, a greater proportion of whom are female, would be the ones disadvantaged. The BMA felt it could not sign up to an arrangement that created such inequity.

What happens to unspent funds

The BMA agreed with NHS Employers in 2018 that payment of CEAs was a contractual obligation. Under existing arrangements, the money must be spent on consultant pay. Under the proposed new scheme, there was no mandate that unspent funds must be paid to consultants. If too few people applied in a given year, there could be a substantial amount of money left over. The BMA were clear that legally this must be spent on consultants. We proposed channelling any unspent funds from level 2 into level 1, raising the value of those awards.

Employers’ side were adamant that level 1 was to be capped at £2.5k. They also stated that the use of unspent funds was a decision for Trust management ‘in consultation with the LNC’, rather than agreement, and could be used for anything from staff facilities to benefitting other staff groups. We were extremely concerned that this meant there was no longer a contractual right for the money to be spent purely on consultants pay. This was a significant ‘red line’ for us.

About the old scheme

Why the old scheme had to change

The existing CEA scheme was recognised as a contributory factor to widening the gender and ethnicity pay gaps.

Both women and those from non-white ethnic backgrounds were less likely to apply for an award, and the awards were seen as exclusionary, as the rigid domain structure meant that you had to have evidence of management and leadership as well as research in order to have a realistic chance of being successful. These roles are less frequently taken on by women and those from ethnic minorities and in our view, it was unfair that you could not tailor your application to match your scope of practice.

In addition, those working part time (predominantly women) only received a pro-rata’d award despite needing to submit the same level of evidence.

Addressing inequalities in the old scheme

The BMA were clear that making the new scheme fair and accessible to all was our main objective.

Broadening the scope of evidence to 15 areas of excellence in which a consultant would only need to submit evidence for three, instead of under the old scheme where all 5 single areas were mandatory, would go some way to addressing inequalities – not just in the gender and ethnicity pay gap but also between specialties (with some in the past far less likely to be awarded) and levels of seniority.

However, the lack of a defined scoring system, which would be under the complete control of management, and lack of guidance on how Less Than Full-Time (LTFT) doctors might be assessed meant that the new areas of excellence alone were not enough to guarantee a fairer and more accessible scheme. Despite the BMA highlighting concerns about inequity of time and resource between consultants undertaking clinically excellent work, these were not addressed by the other side. As such, no guidance was included mandating trusts to take these factors into account.

In addition, the proposed scheme only allows a consultant to use evidence gathered during the preceding three years. We felt this would disadvantage LTFT workers, those taking maternity leave or extended sick leave, and those with disabilities, further widening inequality within the scheme. We were concerned that limiting evidence to this time period essentially meant any excellent work done prior to the pandemic for consultants without existing awards would essentially be ‘lost’. Furthermore, those working in acute frontline specialties may have had little time over the last three years to perform many roles outside of their extensive clinical duties.

The BMA did secure agreement that LTFT workers should receive a full award if successful but, without an agreement on how LTFT workers’ reduced time and resources would be considered when deciding on their suitability for an award, we felt the risk of LTFT workers being disadvantaged when competing with full-time colleagues remained high, which would worsen the gender pay gap.

Existing CEA holders

Currently, Schedule 30 (the contractual provisions detailing CEA arrangements since 2018) means that old-style Existing LCEAs (awards granted prior to April 2018) are subject to a renewal process every five years. The BMA proposed a ‘total cap’ on the amount that could be earned when combining the old and new awards, and recommended that those with high level Existing LCEAs (who would therefore be ineligible for the full value of new awards) should not be subject to a renewal process on their old awards.

We felt this was a fair and reasonable proposal that benefitted those with old-style Existing LCEAs whilst also ensuring those with no awards would potentially have access to more funding, more quickly. Employers’ side did not agree to this suggestion and, as such, Existing LCEAs will still be subject to a scored renewal process under the old Employer-Based Awards Committee (EBAC) assessment system.

Earnings on the local scheme versus the national scheme

By allowing those with high level existing awards (which previously would have been capped at a maximum of Level 9) to qualify fully for new awards as well, the total value earned could be higher than national awards. Indeed, given the changes to the new National Clinical Impact Awards, the highest level of award is now £40,000 and non-pensionable. ACCIA had been considering whether to allow national award holders to access the local scheme but have decided not to allow this. This causes a number of issues as existing local award holders will have to give up their local pensionable awards if they successfully apply for a national award and as noted a Local level 9 holder could retain this award and potentially apply for an additional £22.5k of new awards in the local scheme. This would be significantly higher than the value of a platinum award. This is likely to significantly deter people from applying for national awards and create further inequity.

The financial impact on younger consultants

As NHSEI have stated that Existing LCEAs (awards granted prior to April 2018) must be paid prior to funding being allocated for new awards. New awards are non-consolidated and non-pensionable, meaning far higher amounts would need to be awarded to even come close to the value of the old-style Existing LCEA over a career. By requiring that old-style awards be paid first out of the funding pot, some Trusts will have very little money left to run new awards. As noted above, this historically used to be the case in practice anyway but Trusts generally paid the money anyway and reclaimed the costs from government.

As old-style award holders are able to apply for the full amount of both new levels, the situation could easily arise where older consultants’ earning potential far exceeds that of younger consultants. This would disproportionally affect women who make up a higher proportion of the younger workforce. We didn’t think this was fair and suggested a cap on total award income.

The financial impact on Trusts

Those Trusts that have paid the full value of their LCEA rounds in the past and rewarded their consultants most fairly are now in the position of having the least money to invest into the new scheme. It’s a postcode lottery. In fact, there are around 35 trusts who would have virtually no money available for the new scheme at all in the first few years. We are concerned that those Trusts that have historically valued their consultants appropriately may now struggle to recruit new consultants if neighbouring Trusts are able to award much higher LCEAs.

About the proposed new scheme

How the new scheme came about

Although the old CEA scheme was introduced in 2004 following the new implementation of the new consultant contract, in 2014, the government threatened to remove CEAs, including removing the awards held by existing consultants, as they believed that they were not a contractual entitlement. Furthermore, an increasing number of trusts were not running rounds due to cost pressures, again believing the scheme was discretionary.

The BMA disputed this and took legal advice, and subsequently brought a legal challenge against the government arguing that CEAs were contractual, that they could not be removed from existing award holders and that consultants on the 2003 contract had an ongoing entitlement to access the CEA scheme each year.

While we were confident in the strength of our case, there are always risks involved in bringing legal action to court, as it leaves determination of the issue in the hands of a judge. This was a large sum of money for consultants - currently in excess of £400million pounds a year and, after a prolonged period of discussion, the BMA consultants committee, felt it would be in the bests interests of consultants to pursue an out of court settlement that would remove any uncertainty about the outcome and, consequently, members’ income.

The agreement that was reached in 2018 with NHS Employers and the Department of Health & Social Care (DHSC) secured the majority of what we hoped to achieve through the legal action, ensuring that those with awards could expect to continue to receive them and, crucially, to guarantee the future funding of the scheme and that this money would continue to be paid to consultants.

Like with every negotiated settlement, there had to be some concessions. Consequently, it was agreed that awards under the new scheme became non-consolidated (i.e. not incorporated into basic pay) and non-pensionable, though the value of employer pension contributions were added to the overall funding pot.

The minimum amount of money for awards was set out in schedule 30 of the consultant terms and conditions of service, as well as certain other protections, but in the event of a failure to agree a national scheme, there was the option of employers to modify schemes locally via consultation with the LNC.

How far we got with the new scheme and how it worked

The proposed new scheme had two levels of awards that may be achieved. The BMA felt strongly that the ‘every day’ excellence achieved by nearly all consultants should be recognised and set out proposals for an awards payment that addressed this. An entry level award was agreed by all sides and termed ‘level 1’. The idea of level one is that consultants would need to provide evidence of engagement in three areas of excellence but that these would not be outcome measured.

The proposed scheme had 15 areas of excellence under 5 broad domains and each consultant would submit evidence in three areas; 2 chosen by them and 1 from a list of three chosen by the employer (with the caveat that it must be achievable). All consultants, irrespective of specialty or seniority, should be able to fulfil several of the 15 areas so would have a reasonable choice on which aspects of their work to use. The scoring of Level 1 would be a binary decision of ‘achieved or not achieved’ with no competitive scoring or ranking. All 15 areas are determined as of equal value. The expectation is that up to 100% of consultants would be able to achieve this each year.

‘Level 2’ is a higher value, higher resource award which would be run competitively, more similar to the old-style pre-2018 awards. The same 15 areas of excellence apply with consultants being able to pick any three of their choosing in which to submit evidence. One of those areas would have to demonstrate how it aligned with the Trust’s objectives but the consultant could pick any area to use. Those scoring highest against their peers would achieve a level 2 award.

Our negotiating partners insisted that both levels must be single year awards which are non-consolidated and non-pensionable. For level 2 awards, we felt that a process of annual application would create a significant and unnecessary burden (see below).

There is currently no agreement in this area, and it remains to be seen what approach Trusts will adopt. As noted above, we remain willing to engage with DHSC and NHS Employers to develop a new national scheme that is fair and believe that until this happens, we believe that the fairest method is to continue to the arrangements that operated during the pandemic and equally distribute CEA funding to consultants.

How the new awards would have been scored

Level 1 awards were to be marked by a single individual who might be an individual’s Clinical Director or Clinical Lead (or nominated consultant). Employers’ side however wanted the right to be able to specify that the person marking the applications could be, for example, a non-clinical manager. We disagreed with this, given the clinical nature of these awards.

A second panel would look at whether the process in terms of whether the trust had followed this correctly. This would have significantly limited the scope for consultants to appeal any decisions made, and a compromise on this point could not be agreed.

Access to the scheme was only available to those engaged with appraisal/job planning and, at employers’ insistence, those who’d completed (or would complete) 100% of their mandatory training.

Level 2 awards were to be assessed by a panel comprising of at least 50% non-managerial consultants (similar to the old scheme EBAC panels) though the make up of these panels would be left to local discretion, as would future marking schemes.

Who is eligible for the new scheme

All consultants employed on 2003 terms including those in their first year and directly employed NHS locum consultants. Agency locums and National Clinical Award holders were not eligible to receive an award.

However, for funding calculations, this is based on the number of full time equivalents within the trust, excluding National clinical award holders and those with less than 1 year’s service.

Time implications of the proposed new scheme

Under employers’ proposed scheme, there would be three things to score:

  1. Level one awards
  2. Level two awards
  3. Existing awards renewals

The BMA repeatedly voiced its concerns that the new scheme was too complicated and time-consuming for Trusts to run every year. We know our employers are busy trying to run hospitals under immense pressure, with staff shortages and huge backlogs of care. We felt it unreasonable that a new scheme would place such a significant burden on organisations, as well as being difficult for individual consultants to navigate. The BMA argued against running renewal processes for old schemes as well as suggesting multiple-year awards to lessen the amount of paperwork Trusts would have to manage each year. Employers’ side did not agree these proposals and insisted on single-year awards only, with applications being run annually for everyone.

Tax implications of the proposed new scheme

Although the new awards are non-pensionable, there are still tax implications for receiving a level 2 award in one year rather than it being split over a few years. For those close to the tapering threshold for pensions, this might have significant consequences in terms of annual allowance charges. For those on the lower points of the consultant pay scale, a high value one-off bonus could be enough to breach the threshold for loss of personal allowance.

About the negotiations

Negotiating the new scheme

The BMA have been in consultation with HSCA, NHSEI, DHSC and NHS employers to attempt to develop a new scheme which is fairer. Unfortunately, the BMA were not able to agree to the final proposal due to a number of concerns which will be addressed below. The specifics of how the scheme operates will remain subject to local negotiation.

We remain willing to engage with DHSC and NHS Employers to develop a new national scheme that is fair and believe that until this happens, the fairest method is to continue to the arrangements that operated during the pandemic and equally distribute CEA funding to consultants.

Why we did not ask membership to vote on the new scheme

We presented the proposals for the new scheme in great detail to your elected national representatives on the UK Consultant Committee. 100% of the committee felt the offer was completely unacceptable or unacceptable and 98% of representatives felt it should be rejected without putting it to the wider membership. We informed employers’ side of this and asked that several areas of concern be addressed, particularly the areas addressing inequalities and the use of unspent funds. Unfortunately, there was no movement on these key areas, so the committee was confident in its decision to reject the scheme on behalf of our members.

What happens now

The BMA have said we are willing to continue to negotiate on a new scheme if employers’ side are willing to reconsider the areas of concern we have highlighted. In the meantime, the Schedule 30 arrangements will remain in place. The BMA will be sending out supporting guidance to LNC chairs about new rounds and our recommendations for aspects of the scheme that they should seek to negotiate. Presently, we recommend continuing the process of equally distributing award funding, as has been followed since the start of the pandemic, until a fairer, less complicated scheme can be agreed. This is the proposal we will be highlighting to our local representatives across the country.

Please note

We are currently working to bring this content up to date following the CEA agreement negotiations.

The existing agreement on the future of LCEAs in England

The BMA, Department of Health and Social Care and NHS Employers have made an agreement on the future of the local clinical excellence awards in England.

While negotiations on a long-term replacement for the scheme continue, this agreement will provide clarity for consultants and employers.

Read the full guidance

This guidance is intended to be read along with the Local clinical excellence awards joint FAQs. The joint FAQs give employers and consultants a shared understanding of the agreement and its practical implications for consultants.

 

Background on the negotiations

During negotiations around the national consultant contract, the Government indicated that it could remove the CEA scheme and/or withdraw future funding.

The BMA subsequently undertook a legal challenge against the Secretary of State for Health. This legal action was conducted on a number of grounds.

The BMA, NHS Employers and Department of Health and Social Care reached an agreement on the local clinical excellence awards (CEA) scheme. This is an out-of-court settlement arising from the BMA’s continuing legal action around the contractual status of these awards.

The agreement will secure the overall value of consultant awards (~£300m) for the future. This is a large proportion of the total consultant pay bill which the Government had threatened to remove.

Furthermore, we have secured an increase in the minimum investment in the local awards from 0.2 per FTE to 0.3. This is met partly through the reinvestment of employer pension contributions.

 

If your employer won't implement the deal

This agreement has been incorporated into the 2003 consultant contract. It clarifies that access to LCEAs, and the right to retain existing LCEAs in accordance with the terms of the settlement, are a contractual entitlement.

If an employer who employs consultants on the 2003 contract deviates from these terms they will be in breach of contract. In such an instance the BMA would support its members in bringing a claim against them.

If your employer says they can’t afford it - trusts will simply be spending the amount that they always should have on the LCEA scheme and this is not an additional cost pressure.

 

If your trust didn't run awards before

The BMA believes that the CEA scheme was contractual. It was potentially a breach of contract if trusts had not run rounds prior to the agreement.

However, further legal action would be required on behalf of the individual consultants against their employer directly. This would potentially be challenging as consultants would need to prove that they would have been successful if an award round had been run.

For these reasons, the settlement focuses on ensuring that awards rounds are run and that this issue is not allowed to recur.

 

The impact on your pension

  • If you are in receipt of a pensionable award (made prior to April 2018) there will be no change to your pension status as a result of this agreement – you should keep in mind your lifetime and annual allowance.
  • If a pensionable award is reviewed after 2021 and reduced or removed it will be possible for those in the 1995/2008 sections, or then transitioned to the 2015 scheme, to apply for pay protection.
  • If successful, this would mean that your benefits would not be calculated with reference to your reduced pensionable pay but the previous higher pensionable earnings.
  • If you have yet to receive an award and receive a non-pensionable award after 2018, pension contributions will not be deducted from this money - although it will still be taken into account for assessing your annual allowance.
  • If you lose an award that was previously pensionable you are able to protect your 1995/2008 section pension by applying for pay protection.
  • You can’t apply for pay protection on the 2015 scheme as it looks at each year’s pensionable earnings and does not base benefits on final salary.
  • The loss of an award will mean that each year’s accrual after loss of the award will be based on your pensionable earnings (without the award).

 

Giving up employers' contributions

The BMA has been carefully considering tax implications for those whose awards are pensionable and the old mantra of ‘pensionable = good’ no longer applies. We have heard from some members who are unhappy that the awards were pensionable and have triggered large tax bills. This is part of the reason to the change for new awards, on the basis that all the money is reinvested in the scheme, and any new money.

The increased funding for the awards from 0.2 to 0.3 per consultant has been secured in this way, which increases the chance of a consultant getting an award.

Greater flexibility is being looked at on a national level as part of the review of member pension contributions. The ability to choose how much income is treated as pensionable is being explored. Some trusts already have schemes where those who opt out of the scheme for tax reasons are able to keep the employer contributions.

Given the reduction in both lifetime and annual allowances it is not necessarily in consultants’ interest to have all of their income pensionable.