Corporate report

Ethnicity Pay Gap Report: 1 April 2019 to 31 March 2020

Published 25 March 2021

Foreword

This is the first year we are voluntarily publishing our ethnicity pay gap report. Being open and transparent about equality, diversity and inclusion issues really matters to us, and we believe that the publication of this report is an important tool to help us achieve our ambition to fully embed a diverse and inclusive culture within the CMA. We want to ensure the CMA is a great place to work whatever your age; whether you have a disability or not; ethnicity; gender identity; marital or civil partnership status; if you are pregnant or taking maternity leave; religion; sex; sexuality; and social background.

We are pleased about the progress that we have made over the past few years to reduce our gender pay gap through a variety of corporate initiatives. These have included the introduction of success profiles (a more flexible recruitment framework which assesses candidates against a range of elements); continuing with the use of flat rate bonus payments to SCS and non-SCS colleagues; and always ensuring that we have both men and women on our interview panels. We are committed to ensuring that we continue to work to close the gender pay gap further, and additionally feel that it is now important to build on this work by considering our ethnicity pay gap.

In this ethnicity pay gap report, we have used the same principles that are applied to statutory gender pay gap reporting. The ethnicity pay gap shows the difference between the average (mean and median) earnings of the CMA’s BAME (Black, Asian and Minority Ethnic) employees and non-BAME employees. Similar to gender pay reporting, this report shows the proportions of BAME and non-BAME full-pay relevant employees in four quartile pay bands. Our current ethnicity pay gap figures are not acceptable to us as an organisation, and we fully acknowledge that there is considerable work to be done in this area.

As with many organisations, a significant driver of our ethnicity pay gap is a simple structural reason: we still have too few BAME colleagues in senior roles. This situation cannot continue, and we recognise that we must improve in this area. As a result, our key areas of focus to address our ethnicity pay gap over the coming years will be to support and champion BAME staff and address the lack of BAME diversity in our leadership population. Our Race Action Plan fully details our commitment to delivering these objectives. We anticipate that the implementation and achievement of the Race Action Plan’s actions will go some way towards reducing the ethnicity pay gap in the CMA.

We know that reducing our ethnicity pay gap will be challenging, but our board and executive team are fully committed to delivering on this ambition and making long-term sustainable changes with lasting impact.

Andrea Coscelli, Chief Executive

Amelia Fletcher, Non-Executive Director and Wellbeing, Inclusion, Diversity and Equality Steering Group (WIDE) Chair

Introduction

The CMA is a non-ministerial government department in the United Kingdom responsible for promoting competition for the benefit of consumers, both within and outside the UK. Our aim is to make markets work well for consumers, businesses and the economy, strengthening business competition and preventing and reducing anti-competitive activities.

The CMA is fully committed to minimising the ethnicity pay gap and our approach to pay seeks to reward staff fairly, regardless of race. We are committed to developing a culture that is respectful, diverse and inclusive.

Background

In October 2018, as part of the government response to the McGregor-Smith recommendations, the Department for Business, Energy and Industrial Strategy (BEIS) initiated an employer consultation on ethnicity pay gap reporting. The consultation set out questions and options on what ethnicity pay information should be reported by employers to allow for meaningful actions to be taken. The results of the consultation are still being analysed.

In the absence of a mandatory framework for ethnicity pay gap reporting, organisations who do take steps to report their ethnicity pay gap have to select their own reporting measures. Many have chosen to replicate the measures used in gender pay gap reporting. The CMA has taken this approach and therefore this report includes:

• the mean and median ethnicity pay gaps
• the mean and median ethnicity bonus pay gaps
• the proportions of BAME and non-BAME employees who received a bonus
• the proportions of BAME and non-BAME employees in each pay quartile

The ethnicity pay gap shows the difference in the average pay between all BAME (Black Asian and Minority Ethnic) staff in a workforce. Where there is a positive percentage, this means that the pay of non-BAME staff is higher than the pay of BAME staff. The higher the percentage, the greater the ethnicity pay gap.

The ethnicity pay gap is different to equal pay. Ethnic pay disparities are not primarily about those from a white background and other ethnic groups being paid differently for the same job. The Equality Act 2010 makes it unlawful to discriminate (both directly and indirectly) against employees (and people seeking work) because of their race. Therefore, unless there is a failure to comply with existing law, pay disparities between ethnic groups are likely to be due to other factors that impose a disadvantage on people from ethnic minorities without being explicitly discriminatory. ^{[footnote 1]}

The CMA supports the fair treatment and reward of all staff irrespective of race or other characteristics. This report sets out the CMA’s ethnicity pay gap including analysis of our ethnicity pay gap by grade and the CMA’s action plan to tackle the gap.

Context

The background to racial disparity in the UK is well documented in a range of recent reviews and reports that outline the challenges and opportunities for employers in achieving workplace equality.

At the CMA, we believe we have an important role in delivering our clearly stated commitment to racial equality and we have agreed a priority focus for 2020 to 2021 on race, including a review of our ethnicity pay gap position.

In addition, as a signatory to the Race at Work Charter, the publication of this Ethnicity Pay Gap reports fulfils our charter commitment to ‘capture ethnicity data and publicise progress’.

Unlike gender pay gap reporting, ethnicity pay gap reporting is completed on a voluntary basis. Of those organisations that have published ethnicity pay gap data there is a trend towards a concentration of BAME staff in lower grades and an absence or under-representation of BAME staff at senior grades. The CMA ethnicity pay gap presents a similar picture. We know that the absence of BAME staff in our Senior Civil Service (SCS) cohort in the reporting year is a significant issue for the CMA for many reasons, including being a substantial driver for our ethnicity pay gap figures. We have already put a range of measures in place to address under-representation at SCS level.

We also know that this is the start of a journey, an expression of our commitment to address our ethnicity pay gap and that it will be the effectiveness of our identified actions that will make the difference over time.

Finally, we note that the CMA, like many other organisations, is currently considering its use of the term BAME in the context of the extent to which using a single categorisation distorts the disparities between different ethnicities. This report uses the term BAME but we recognise this is an evolving discussion. Furthermore, given the numbers involved we need to be mindful of the impact that a different categorisation might have on our ability to report effectively.

Ethnicity profile of the CMA

At 31 March 2020, the CMA had a total of 852 staff ^{[footnote 2]} in the UK, with 795 based in London, 53 in Edinburgh, 2 in Cardiff and 2 in Belfast. This is the number of staff deemed to be ‘full pay relevant’; those employees who are not being paid or are on reduced, statutory or no pay during March 2020 are excluded as they are not ‘full pay relevant’ employees.

The ethnicity profile of full pay relevant CMA staff at 31 March 2020 was 22% BAME, 69% non-BAME.

9% of CMA staff have not provided ethnicity data either by choosing not to disclose this information – 7%, or by selecting the ‘Prefer not to say’ category – 2%. This is a total of 77 employees.

The following table shows the ethnic profile of the CMA by grade. The absence of BAME staff in the SCS in the CMA is acknowledged as unacceptable and is a priority focus for the Board and Senior Executive Team. The ambition is that the organisational diversity of the CMA at all levels should reflect that of the UK public, and we will take all possible steps to achieve this ambition.

Civil Service grade	Total Staff	Percentage BAME	Percentage non-BAME	Percentage not reportable
AO	28	28.6%	60.7%	10.7%
EO	80	45.0%	48.8%	6.3%
HEO	157	35.7%	60.5%	3.8%
SEO	60	40.0%	51.7%	8.3%
Grade 7	225	16.0%	77.8%	6.2%
Grade 6	192	14.1%	71.9%	14.1%
SCS PB1	86	0.0%	87.2%	12.8%
SCS PB2 and PB3	24	0.0%	75.0%	25.0%
All staff	852	22.0%	69.0%	9.0%

We know that there is higher representation of BAME staff at lower grades as well as lower representation of non-BAME staff at higher grades relative to the overall CMA population and that this is one of the main drivers of the ethnicity pay gap in the CMA. Improving our ethnic diversity in senior grades will reduce both the mean and median ethnicity pay gap.

The ethnicity pay gap calculations are based on the number of individual employees, and not on full-time equivalents. This means that each part-time employee counts as 1 employee.

Calculating the ethnicity pay gap

Ordinary pay

Ordinary pay, expressed as hourly pay, is used to calculate the mean and median ethnicity pay gaps. Ordinary pay includes basic pay, any allowances and any bonus payments made in March 2020.

The calculation for the mean and median ordinary pay only includes ‘full pay relevant’ employees, as described in paragraph 8.

In 2020, the mean ethnicity pay gap, which is the difference between the average hourly pay between BAME and non-BAME staff, is 29.3%.

In 2020, the median ethnicity pay gap, which is the difference between the midpoints of the average hourly pay of BAME and non-BAME staff is 34.8%.

Measure	Gap
Mean pay gap	29.3%
Median pay gap	34.8%

Looking at the mean ethnicity pay gap analysis by grade, the data shows that BAME staff in EO, HEO and SEO grades are paid less than their non-BAME colleagues. The negative difference demonstrated in the AO, G7 and G6 grades indicates that BAME staff in these grades are paid slightly more than their non-BAME colleagues. The percentage differences across AO – G6 roles are relatively small. The absence of a mean pay gap at SCS level is a consequence of the lack of BAME representation at this level and this contributes significantly to the overall ordinary pay gap figures. The under-representation of BAME staff at G6 and G7 relative to the CMA population is also a contributor to the overall mean and median ethnicity pay gap for ordinary pay.

Civil Service grade	Total staff	Mean pay gap*	Median pay gap*
AO	28	-2.5%	0.0%
EO	80	1.6%	0.0%
HEO	157	0.6%	0.0%
SEO	60	2.8%	3.7%
Grade 7	225	-0.1%	-0.2%
Grade 6	192	-0.1%	-1.0%
SCS PB1	86	N / A	N / A
SCS PB2 and PB3	24	N / A	N / A
All staff	852	29.3%	34.8%

*Where we have a negative percentage, this means that the pay of BAME staff is higher than the pay of non-BAME staff.

Bonus pay

Bonus pay, which is also calculated as mean and median, is based on bonus payments paid to staff throughout the 2019 to 2020 financial year and up to 31 March 2020.

As this covers a full year period, this calculation includes employees who are not ‘full pay relevant’ employees and can also include employees who left the CMA before 31 March 2020.

At the CMA, bonus pay includes performance related pay for all staff. There is a performance related pay scheme for our non-SCS staff which is negotiated annually with our trade unions. There is a separate performance related pay scheme for our SCS staff which is determined centrally by government.

This year, the proportion of staff eligible for performance bonuses was increased, enabling performance bonuses to be distributed more widely.

Our non-SCS staff also have their own in-year recognition scheme which allows cash awards worth between £25 and £750. The awards could be paid to staff at any time throughout the 2019 - 2020 financial year.

It should be noted that by definition, bonus calculations must also include Pivotal Role Allowances. These are payments, approved by a subgroup of the Civil Service Board and Chief Secretary to Treasury, aimed at retaining SCS staff in highly specialised roles and those delivering high-risk, major projects at the CMA. The allowances were paid in instalments on completion of key deliverables throughout the 2019 to 2020 financial year.

In the 2019 to 2020 financial year, 34.8% of CMA staff received a performance related bonus payment. In the same year 71.0% of qualifying non-SCS staff received a one-off organisational achievement award of £150, in recognition of delivering corporate objectives amidst a challenging period – notably, preparation for EU Exit, the CMA’s office relocation to Canary Wharf and growth in Scotland and the Devolved Nations.

Taking into account all types of bonus payments, 76.6% of BAME staff and 68.0% of non-BAME staff received a bonus payment in the year 2019 to 2020.

The mean bonus ethnicity pay gap is 57.9% and the median bonus ethnicity pay gap is 44.2%.

Measure	Gap
Mean bonus gap	57.9%
Median bonus gap	44.2%

We know that the bonus gap is affected by the following factors:

a) the value of the bonuses for SCS staff are significantly higher as their “performance pay pots” are different. SCS staff shared 3.3% of the SCS paybill in bonuses last year, whereas non-SCS staff received 1.5% of the non-SCS paybill to spend on bonus payments and in-year awards during the same period. Coupled with the absence of BAME staff in the SCS this widens the gap significantly

b) the distribution of performance ratings between BAME and non-BAME staff. End of year performance related payments (PRP) for the reporting year were based on staff receiving ‘Consistently Exceeding’ and ‘Partially Exceeding’ ratings. PRPs were paid as fixed values, based on grade, with staff in receipt of a ‘Partially Exceeding’ rating receiving 50% of the PRP value of ‘Consistently Exceeding’ staff in the same grade

c) the concentration of BAME staff in the lower 2 pay quartiles which limit their access to higher performance related pay bonuses given that these are tiered in value based on grade

d) the different grade structure for Competition Specialists and Non-Competition Specialists and the concentration of BAME staff in Non-Competition Specialist grades coupled with the low numbers of BAME staff in the Competition Specialist grade

An additional factor which has contributed to the increase in the mean gap this year are the inclusion of Pivotal Role Allowances in bonus calculations, as all recipients in the reporting period are non-BAME. Pivotal Role Allowances are payments, approved by a subgroup of the Civil Service Board and Chief Secretary to Treasury, aimed at retaining SCS staff in highly specialised roles and those delivering high-risk, major projects at the CMA. The allowances were paid in instalments on completion of key deliverables throughout the 2019 to 2020 financial year.

Looking at the mean bonus gap analysis by grade, the concentration of BAME staff in lower grades and the absence of BAME staff in higher and SCS grades has a negative impact on the bonus ethnicity pay gap.

Civil Service grade	Staff in receipt of bonus(es)*	Mean bonus gap**	Median bonus gap**
AO	8	-76.7%	-14.3%
EO	54	24.1%	42.9%
HEO	131	10.3%	32.1%
SEO	46	0.0%	0.0%
Grade 7	175	6.8%	40.0%
Grade 6	163	4.3%	30.6%
SCS PB1	34	N / A	N / A
SCS PB2 and PB3	12	N / A	N / A
All staff	625	57.9%	44.2%

*Bonuses include year-end performance-related payments, payments made through the CMA Staff Recognition Scheme and SCS Pivotal Role Allowance payments.

**Where we have a negative percentage, this means that the bonus pay of BAME staff is higher than the bonus pay of non-BAME staff.

Pay by quartiles

The hourly pay quartiles are calculated by listing all employees in order of hourly pay and splitting them into four equal parts. The chart below shows the proportion of BAME and non-BAME staff that are in each pay quartile.

Quartile	BAME	Non-BAME
Lower quartile	40.9%	59.1%
Lower middle quartile	28.8%	71.2%
Upper middle quartile	16.3%	83.7%
Upper quartile	8.5%	91.5%

The concentration of BAME staff in the lower quartile reflects the overall ethnic profile of the CMA and the fact that BAME staff predominantly hold AO, EO, HEO roles. The upper quartile, which is mainly comprised of Grade 6 competition specialists and SCS staff, has the lowest proportion of BAME staff.

Closing the gap: actions for the CMA

The CMA has agreed a Priority Focus: Race Action Plan 2020 to 2021 which aims to deliver an ambitious set of challenges that will see the CMA supporting and championing BAME staff and addressing the lack of senior BAME diversity. The following 4 actions are set out within this plan:

Action 1: Investigate ways to ensure greater ethnic diversity and diversity of thought at the senior leadership level

Action 2: Sponsorship and the creation of an internal CMA development programme for aspiring colleagues from under-represented groups

Action 3: Use data to challenge and check our progress on recruitment outcomes and pay and also review the CMA’s ethnicity pay gap

Action 4: Creation of the Positive Action Steering Group (PASG)

It is anticipated that the implementation and achievement of these actions will go some way towards reducing the ethnicity pay gap in the CMA. A brief overview of how we anticipate the identified actions will make a difference is outlined in the following table.

Priority focus: Race action plan 2020 to 2021

What we hope this will achieve over the longer term

Investigate ways to ensure greater ethnic diversity and diversity of thought at the senior leadership level

The CMA Board and Executive want to ensure that the voice of under-represented groups, with a particular focus at the current time towards colleagues from ethnic minorities, are heard, understood and integral to senior level decision making in the CMA. Whilst appointments to the CMA Board are made outside of the CMA, we will do all that we can to ensure that our Board becomes diverse and is reflective of the consumer voice. More broadly, work on cultural awareness, respect, and close working with our staff networks will ensure that we create an open and inclusive working environment throughout the CMA where all voices can be shared and are heard.

Sponsorship and the creation of an internal CMA development programme for aspiring colleagues from under-represented groups

Executive sponsorship is often cited as one of the most effective ways of developing diverse talent. Effective implementation of this in the CMA will help to build a strong talent pipeline throughout the organisation. This work also sits alongside and is complemented by the CMA’s Mutual Mentoring programme. The creation of an internal CMA development Scheme for aspiring colleagues from under-represented groups, aims to provide the tools, skills and opportunities for these staff to progress their careers. It is likely that this programme will also provide valuable information on the barriers under-represented groups face in the workplace and help the CMA identify strategies to address these so that all staff compete on an equal footing.

Use data to challenge and check our progress on recruitment outcomes and pay and also review the CMA’s ethnicity pay gap

The development of the CMA’s Diversity Dashboard provides a valuable tool in collating and interrogating our data. The current work on the ethnicity pay gap will provide a benchmark for comparison in future years. Analysis of our data, alongside conversations with our diverse talent, will enable the CMA to understand where there are barriers to entry into and progression within the CMA and identify strategies to tackle these and to attract talent from harder to reach groups. Use of our Diversity Dashboard data will enable us to provide hiring managers with an overview of the composition of their directorate at the outset of a recruitment campaign. Coupled with analysis from other data sources we will also be able to better target our advertising to reach a diverse audience. Continued development of the analysis of our equality data on end of year performance ratings and in year staff recognition awards will enable us to assess our progress towards meeting our equality commitments.

Creation of the Positive Action Steering Group (PASG)

The Positive Action Steering Group (PASG) has been set up and will ensure that we deliver on our Race Action Plan and continue to hold our Executive and Board to account. Erik Wilson, Chief Operating Officer and the Board’s race champion leads this group and progress will be reported regularly against the delivery of the Race Action Plan.

1. Ethnicity Pay Reporting, Government Consultation, BEIS, October 2018, pg. 12 ↩

2. This is the headcount of staff deemed to be full pay relevant employees on the CMA payroll for gender pay gap reporting purposes. There were 891 staff employed by the CMA at this date, not all were full pay relevant employees and so are not included in the ethnicity pay gap report. ↩