Press Release - Pay Modernisation: A new contract for NHS
consultants in England
19 April 2007
Under the new NHS consultants’ contract, consultants in England
are earning on average 25 per cent more than three years ago but
are working the same number of hours or less. Whilst the contract
has the potential to improve management of consultant time it has
yet to deliver the full value for money to the NHS and the public
that the Department expected.
The Department initially provided £565 million to the NHS to
fund the new consultant contract in the first three years. The
Department acknowledged in 2005 that it had underestimated the cost
of the new contract by £150 million and increased its allocation to
NHS trusts accordingly.
The new NHS consultants’ contract, implemented in 2003, aims to
improve the working lives of consultants while giving the NHS more
control over its medical professionals. The ultimate goal is to
improve the quality and ease of access to care for patients.
Today’s report looked at the development, implementation and
outcomes of the new contract. It also examined whether the public
and the NHS are receiving the expected benefits of the contract.
The report concluded that the contract is not yet delivering the
value for money to the NHS and patients that was expected from
it.
There was a compelling need for the new contract, the potential
benefits of which are highlighted in today’s report. Since the
introduction of the contract, the number of consultants working in
the NHS has continued to increase. There is greater transparency
about the hours that consultants work in the NHS and the duties
they undertake and an increased recognition about the amount of
work carried out by consultants. On average the amount of private
practice carried out by consultants has reduced slightly.
Consultants’ pay has increased significantly as a result of the
new contract. In 2005 - 06 the average annual pay of consultants
was £110,000, an increase of over a quarter in three years. But the
average number of hours that consultants reported they worked for
the NHS had decreased by 1.4 hours a week, from 51.6 to 50.2
hours.
Consultants also reported that they were providing less direct
clinical care than before the new contract. And although the number
of consultants working in the NHS increased by 11.3 per cent in the
two years following contract agreement, the amount of
consultant-led activity had increased by only four per cent.
Today’s report found that, in negotiating the contract, the
Department did not collect sufficiently robust evidence on the
actual numbers of hours worked by consultants in the NHS. As a
result workloads were underestimated, undermining the Department’s
ability to cost the new contract accurately.
In addition, most trusts did not set cost boundaries when
negotiating consultant job plans under the new contract. Therefore
they agreed more hours than they had budgeted for, leading to
cost-overruns. In the NAO’s survey 84 per cent of trust chief
executives believed that the contract was not fully funded.
Among the NAO’s recommendations are that any new policies from
the Department should be based on accurate assessment of the
current situation, all possible scenarios should be fully
financially modelled before they are implemented, and their purpose
and detail communicated to the NHS in a timely manner. And NHS
trusts should carry out a full local assessment of what is needed
from consultants, in terms of levels of activity and patient
outcomes, bounded by a ‘cost envelope’.
Sir John Bourn, head of the NAO, said today:
“Consultants are central to the work of our national
health service and deserve to be paid properly for the work that
they do. However, the new contract was introduced to benefit not
only consultants, but patients and the health service in general.
Although a new contract was needed it is regrettable that the costs
are higher than expected and that we are not yet seeing any clear
evidence of improvements in productivity or services for
patients.
“It is important that trusts are clearer about what they need from
their consultants and plan within their resources”
Notes for Editors:
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 850 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 23/07
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