The latest ASHE figures (the final figures for 2019 and the provisional figures for 2020) were published on 3 November 2020. DWF Forensic have updated their annual review to highlight the key data relevant to catastrophic injury claims handling and the impact on the next round of annual periodical payments due in December 2020, as a result of increasing care costs.
The big picture
A summary of the annual increases included in the ONS release is reproduced below for ease of reference, based on Figure 5 of the 2020 ASHE release (and ASHE Table 2.1a). The average increase for all full time employees is 0.1%. The corresponding increases for inflation are CPI 0.9% and RPI 1.5% for the 12 months ended April 2020.
Last year, the increase for all full time employees was 2.9%, so this year's increase is significantly lower. It is likely that the effects of COVID-19, particularly in March and April 2020, has had an impact on overall growth this year. Table 1 of the 2020 ASHE Update (which can be found in section 3, below Figure 4) provides details of the percentage of jobs by type furloughed under the Coronavirus Job Retention Scheme, with reduced pay, summarised for all employees, geographically and by occupation. This shows that for example 22% of jobs in "Caring, leisure and other service occupations" were furloughed; similar percentages are shown in "Process plant and machine operatives" (26%) and "Sales and customer service occupations" (20%). The lowest furlough percentage was for "Professional occupations" (3%).
The links to the tables are as follows:
- The individual Tables numbered 1 to 28 can be found here, although they are not listed in numerical order. Selecting a particular table will take you to a page with links to all the figures published for that table from 1997 (or such later date as the table started) to the 2020 provisional figures. The figures for each year are opened as a zip file which gives access to all the sub-tables (for example 14.1a, 14.1b to 14.12). Clicking on the required sub-table will open the corresponding excel file. The tabs along the bottom of the spreadsheet further split the figures between All, Male, Female, Full-time and Part-time.
- Alternatively the Statistical Bulletin includes an overview of the changes from the 2019 to 2020 figures. To access the results tables, click on the green button "View all data used in this statistical bulletin" to bring up the same Tables 1 to 28 as accessed from the above link (although again not in numerical order).
Care costs and periodical payments
The ASHE table relevant to indexing the majority of periodical payment orders (most of which relate to care costs) is Table 26.5a SOC 6145 & 6146 (previously SOC 6115).
The Table 26 dataset can be found here. The figures are shown below together with the percentage increase over the final 2019 figures:
Notwithstanding the modest average increase across all sectors, care costs showed a 5.47% increase in the median hourly rate in the year to April 2020. This reflects the rise in the National Living Wage by 4.85% in April 2019, and by 6.22% in April 2020. In the same period CPI was 0.9% and RPI was 1.5%. The figures shown in Table 26.5a include employees who have been furloughed under CJRS.
The impact of Brexit on earnings growth is still uncertain, as the UK still follows EU rules until 31 December 2020 (when the "withdrawal period" ends). However, any restriction on the free movement of workers may result in higher care costs due to a reduced pool of carers with fewer numbers being recruited from the EU. The impact of COVID-19 on earnings growth is also uncertain, although caring is now clearly a frontline profession and employers need to make it financially attractive for their employees. Ian Slater argued in May that the crisis in social care was likely to lead to an increase in earnings and, in turn, an increase in the annual percentage applied to periodical payments and, therefore, their attractiveness to claimants.
It is worth repeating that this increase is only in the year to April 2020 so the full effect of COVID-19 and Brexit has not yet been factored in: the concern ahead of next year's release is real.
These increases are ahead of the overall 2.5% increase in Caring, Leisure and Other Service Occupations (Table 1, above), with the Leisure sector likely being more adversely affected by COVID-19. With the majority of periodical payments linked to the 80th percentile many annual payments due in December 2020 will increase by 5.31%, compared to 3.49% in 2019, ahead of CPI and RPI:
DWF PPO administration
DWF Forensic offers an annual update service for periodical payment orders to calculate the next payment due and can also review earlier payment calculations if there are queries over the amounts paid.
