Report of the Director of Education and Early Intervention
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1 HERTFORDSHIRE COUNTY COUNCIL SCHOOLS FORUM 19 th October 2011 AGENDA ITEM 12 Delegation of Maternity Budget from 2012 Report of the Director of Education and Early Intervention Author: Pauline Tinnelly / Cheryl Faint Tel: / Executive Member: Frances Button 1. Purpose 1.1 To update Forum on available approaches to supporting schools in meeting the of maternity absence following the delegation of the maternity budget in April Background 2.1 The Authority advised Forum of its intention to delegate the centrally held maternity budget to schools from April Officers have examined insurance products available in the commercial market and looked at a mutual scheme linked to the sickness and supply scheme. 3. Illustration of typical maternity 3.1 It is particularly difficult to give a definitive cost for a member of staff taking maternity leave. The attached to maternity are affected by a number of factors: Length of service with HCC Length of Local Government service Whether the employee qualifies for Statutory Maternity Pay. The date on which the maternity leave starts and finishes Whether or not the employee returns from their maternity leave. Whether the employee is on a fixed term contract.
2 There are also a number of separate elements of pay, over and above any contractual right to maternity pay itself, to which an employee can be entitled. These are: Accrued Annual Leave Both teaching and non-teaching staff accrue the right to annual leave whilst on maternity leave. The Alabaster Ruling Following ruling in the European Court of Justice in 2005, employees who are on maternity leave are entitled to benefit from any pay award or regarding which applies to them for the whole of the maternity leave period. For example a teacher who starts their maternity leave in April and progresses to the next point on the teachers payscale will be entitled to have their maternity pay recalculated to reflect the higher pay for the whole of their maternity leave period. (Alabaster v Woolwich Plc) Keeping in Touch Days The employee may work up to 10 days, with the employers agreement, without ending their maternity leave. The combination of factors and variables makes projecting the cost of maternity particularly difficult. The following are illustrations of typical for the various scenarios and types of employee: Type of employee Paysc Pension Sch eme Option Cost Full Time Head L30 Yes - TP Returning to Full Time Deputy L7 Yes - TP Returning to Head Full Time Teacher UPS 1 Yes - TP Returning to Full Time Teacher MPS Yes - TP Returning to Full Time Teacher MPS Yes - TP Returning to Full time Support H3 Yes Returning to Staff work after 6 months maternit y leave 13,064 inc on 8,755 inc on 7,531inc on 7,138 inc on 6,884 inc on 4, inc on The above are straightforward examples, however, there are a number of scenarios which are far from straightforward and involve additional elements of pay such as accrued holiday pay and Alabaster payments.
3 Type of employee Payscale Pension Scheme Option Full-time Teacher UPS2 plus TLR1 Yes - TP Returning to work - ( 12,1 Annual 14) Pay Award Alabaster Part-time Deputy Head (60%) Applies L10 Yes - TP Returning to work - Withdrew from Childcare Voucher Scheme Alabaster Applies Full-time Teacher MPS 5 Yes - TP Not returning to Full-time Teacher MPS 6 Yes - TP Not returning to Cost 9,177.28inc on plus Alabaster payment. 6,586.48inc on plus 1,059 Alabaster payment. 6,884 inc on plus accrued annual leave of 1, ,051 inc on plus accrued annual leave of 1,642 Part time Support Staff H4 P20 No Returning to work 4,780 inc on plus accrued annual leave of 1,537 There are any number of other scenarios which we could include. For example a teacher on a salary of 35,000 who moves from a school in a different Authority and qualifies for Occupational Maternity Pay but has less than 26 weeks service with Hertfordshire and does not qualify for Statutory maternity Pay, will cost 14,574 rather than the 7,503 it would cost if they qualify for SMP. This is due to the fact that SMP is recoverable. Alabaster is recorded as Basic Salary or additional OMP and SMP. 4. Defining the insurable benefit 4.1 It is not possible to match the of maternity in any type of insurance scheme. 4.2 Using financial year 2009/10 as an indicative year, the simple average cost of each maternity absence was 5700 per absence. We would recommend a maternity benefit of 5000 per case of maternity with no
4 differential between teaching and non teaching staff. This is the equivalent of the budget divided by the number of cases. 4.3 It is standard practice in the commercial insurance market that schools are required to join both maternity schemes and the sickness insurance schemes. This ensures that schools of all risk profiles join and share the cost of maternity. 4.4 The following sections examine the commercial and mutual insurance scheme options in greater depth. 5. Commercial Option 5.1 On carrying out investigations, with Insurance Brokers and the Department of Education the company chosen for this comparison is the Schools Advisory Service (SAS). This was formed in 1997, and recognised by the Department of Education for Best Value, and currently has over 3000 customers. 5.2 They offer a very extensive package with their Sickness Supply Scheme and this includes maternity benefit. 5.3 The list below shows the benefits and the current charges to schools for each full time equivalent given by HCC and SAS. Table of sickness & supply benefits CURRENT HCC SAS BENEFITS Teaching Staff Non Teaching Nursery The table indicates the similarity of the benefits. 5.4 The comparison of current HCC charges to SAS are shown below:- CHARGES FOR HCC SAS TEACHI NG STAFF days excess day excess day excess Not offered by us day excess
5 10 day excess day excess SAS charges per full time equivalent are less and include the additional covers shown below:- STAFF ABSENCE Maternity Absence- payment of 3,000. Up to 250 daily benefit Bereavement cover On-line claims reporting Full Stress cover Paternity and Adoption cover Jury service Care for others Suspension cover No additional excess periods for lower back, gynaecological, stress and asthma claims. MEDICAL COVER 100,000 worth of cover per staff member Covers 150 common conditions Use of private hospitals Fast track treatment Bowel/Prostate Cancer Screening Covers Surgeon/Physician/ Anaesthetist fees After care expenses In-patient or day care cover Cancer Service- Serious illness cover Oncology Nurse Nurse Visitation Service All family members covered Counselling GP Helpline Qualified GP s Free cover for 24 hours a day, 7 days a week, 365 days a year. Unlimited usage Well-being Cover is also included covering the following areas:- Unlimited access to stress counselling helpline Support and rehabilitation Physiotherapy Health Screening 6. Maternity 6.1 The charges detailed in paragraph 5.4 include standard maternity cover paid by SAS of 3,000 per employee. SAS have offered some variations based on the size of the school OFFER Small School = up to 250 pupils Medium School = pupils Large School = Over 501 pupils.
6 Maternity Cover of 5,000 (maximum) per claim Premium charge Small School Medium School Large School 2,600 per school 5,900 per school 8,700 per school Maternity Cover of 8,000 (maximum) per claim Premium charge Small School Medium School Large School 3,000 per school 7,800 per school 10,700 per school 6.2 Any agreement can be made direct with the School and /or a Local Partnership and therefore will not affect any tax paid by the individual 6.3 The benefits of this commercial option include the ability for schools to individually set a maternity level appropriate to their needs. It also offers additional services as detailed in paragraph 5.4. We understand that schools would also be able to continue their membership in this scheme if they converted to academy. The selection of a commercial option would also allow the distribution of the Sickness and supply scheme final balances back to member schools in a distribution agreed with member schools. 6.4 This commercial option can be considered in more detail with primary representatives and other interested schools in a separate process. 7. Mutual Scheme 7.1 The alternative approach is to operate a mutual scheme where the balance is owned by Hertfordshire schools. The required outcome would be to achieve a sustainable scheme whilst paying out a benefit which meets a significant proportion of the average cost. 7.2 The number and grade of staff taking maternity leave in any one year is highly variable and therefore challenging from the perspective of managing the fund. 7.3 It is proposed that schools who wish to be members of the sickness and supply scheme will also be required to be a member of maternity scheme. The proposal for 2012/13 will be to charge schools for membership of the maternity element the amount they were delegated ie a charge per pupil. 7.4 The Forum is aware that the balance of the Sickness & supply scheme is above the target balances set. This would support the scheme as we develop a greater experience of the risks and pressures. However in
7 the event that this reserve is depleted and the scheme starts to move to a deficit position a mechanism will be needed to ensure that all schools contribute to stabilising the fund. This could include a balance share mechanism where any shortfall or surplus is shared amongst members on an annual basis. 7.5 The detail and of running this scheme would need to be finalised this term with representatives from schools. 7.6 The balances in the Sickness & supply scheme would be needed to support the maternity scheme in the event of a higher claim rate than predicted. 8. Delegation of Maternity Budget 8.1 The proposed delegation of funding was detailed in a paper to the April 2011 meeting of the Forum. The Authority would seek to allocate this budget on a per FTE pupil basis across all schools, to delegate the same amount as charged per FTE pupil for membership of the maternity element of the mutual scheme. 8.2 To predict a delegated amount per child by sector, 2011/12 pupil numbers have been compared to the of maternity in 2009/10. The illustrative results are shown in the following table; Spend against Pupil numbers Delegation per pupil Estimated Delegation Sector Maternity 2011/12 Budget (A x B ) 2009/10 A B ESCS Nursery ,847 Primary (Nursery classes) Under/over recovery By sector Primary Classes Total primary ,620, Secondary (excluding sixth form an inc academies) Special 67, , Totals 2,644, ,664,985
8 8.3 It is proposed to delegate the 2.7m budget on the basis of pupil numbers at January census date based on the above approach. The actual amount per child will be dependent upon the number of children recorded at census date. 9. Conclusion 9.1 The Authority intends to delegate the centrally held maternity budget from financial year 2012/13 and the maternity pay responsibilities. 9.2 To support schools in sharing the cost of maternity, the Authority has explored a commercial option and a mutual scheme. As this scheme is predicted to be predominantly used by primary schools, these will need to be explored in greater detail with primary headteacher representatives and other interested schools. If a mutual scheme is selected it is important that a mechanism for ensuring that it remains adequately funded must be included. 9.3 Forum is asked to support the proposed method of delegation of funding as detailed in paragraph 8.2 for inclusion in the consultation. 9.4 Forum is asked to confirm representatives who would like to look in detail at the mechanism of a mutual scheme and the commercial offer.
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