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Managing NHS hospital consultants

A new contract for hospital consultants, introduced in October 2003, delivered many of the expected benefits. This was in exchange for a significant increase in consultants’ pay. According to the National Audit Office, there is still significant room for improvement in how trusts manage their consultants.

By 2011-12, there were around 40,000 hospital consultants employed at a cost to the NHS of £5.6 billion, 97 per cent of whom were on the 2003 contract.

Of the expected benefits that could be measured, all have been either fully or partly achieved. Consultants’ private practice work has not increased, pay progression has slowed and 97 per cent now have a job plan setting out their objectives, although 16 per cent of these have not been reviewed in the last 12 months. While indicators show that consultant productivity has continued to fall, the rate of decline has slowed significantly. The consultant participation rate (the ratio of full-time equivalent consultants to headcount) has also increased although it remains unclear to what extent this has resulted in consultants doing more actual work for the NHS.

More could be done to achieve better value for money, by fully realising the benefits set out in the Department’s business case. Despite, for example, the contract providing a clear structure for paying for additional work at contractual rates, most trusts still use locally agreed rates of pay for additional work outside job plans, which ranges from £48 to £200 per hour. Pay progression is also the norm and not linked to consultant performance.

The contract significantly increased the cost of employing consultants. Between 2002-03 and 2003-04, total earnings per full-time consultant increased by 12 per cent in real terms with a 24 per cent increase in the bottom of the consultants’ pay band and a 28 per cent increase in the top. The NHS was investing up front for the expected benefits it hoped to achieve in the future.

Realizing the contract’s benefits depends on how well individual NHS trusts manage consultants: for example, through effective job planning to improve the management of their time. There are examples of trusts adopting good management practice; however, more improvement can be made. According to an NAO survey, only 41 per cent of consultants thought that their trust motivated them to achieve the trust’s objectives. While most trusts monitor consultant performance, only 43 per cent of trusts (27 per cent of consultants) thought that information was good enough to assess individual consultant performance. Trusts also reported that nearly a fifth of consultants have not had an appraisal in the last 12 months. Many trusts are not implementing the good practice job planning guidance published jointly by NHS Employers and the British Medical

"NHS consultants play a key role in the NHS. Given the size of the pay increase given to consultants under the 2003 contract, it is reasonable to expect Trusts to have made more progress in improving how consultants are managed and realizing the expected benefits of the contract." "Trusts need to get consultants strongly involved in achieving the trusts' objectives as well as their own clinical goals."

Amyas Morse, head of the National Audit Office

Notes for Editors

  1. The new contract was designed to give a career structure and remuneration package rewarding consultants who made the biggest contribution to the NHS; a stronger framework so managers could better plan consultants' work; and better arrangements for consultants' professional development.
  2. In 2002-03, consultants' salary band was £52,640 to £68,505. Under the contract, this increased to £65,035 to £88,010 (2003-04). This equates to a 24 per cent increase in the bottom of the pay band and a 28 per cent increase in the top of the pay band, a cost built into the lifetime of the contract. Between 2002-03 and 2003-04, total earnings per full-time consultant increased by 12 per cent in real terms, with the growth in consultant earnings moving significantly ahead of the growth in overall hospital and community health service average staff earnings.
  3. 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.
  4. The National Audit Office scrutinizes public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of more than £1 billion in 2011.

PN: 08/13