NHS consultants must be better managed, watchdog says

The NHS must manage its consultants better to secure improvements linked to a sharp rise in their pay a decade ago, the National Audit Office has said.

Pay for senior consultants rose by a maximum of 28% after changes in 2003 designed to lift productivity and career development, the watchdog said.

While there had been benefits, it said value for money could still be boosted and performance assessed more widely.

Ministers said discussions were under way on possible changes.

The watchdog's report analyses the impact of the contract, negotiated by the then Labour government in 2003, which was designed to provide a more defined career structure and reward consultants who made the biggest contribution to the NHS.

The package was approved by senior hospital doctors in England after a ballot in 2004 and about 97% of the 40,000 consultants now working in the health service are still employed under its terms.

The new arrangements led to a 28% increase in the maximum pay for senior consultants from £68,505 to £88,010 while the lower end of the pay band increased by 24% from £52,640 to £65,035.

Average earnings by consultant rose by 12% in real terms in the year after the contract was introduced.

The watchdog said desired gains in productivity and performance connected to the pay rise had either been fully or partly achieved.

The amount of private work being taken on had not increased, it found, the rate of decline in productivity had slowed, the ratio of full-time consultants to total staff in the NHS had risen and pay rises not linked to performance had slowed.

But the watchdog said the anticipated benefits had yet to be "fully realised", with most trusts continuing to pay consultants for additional non-contractual work on the basis of locally agreed rates - ranging from £48 to £200 an hour - rather than the "clear structure" set out in the contract.

It also found that nearly a fifth of consultants had not had an appraisal in the past year while 41% of NHS trusts believed the information obtained was good enough to assess individuals' performance.

"Given the size of the pay increase given to consultants under the 2003 contract, it is reasonable to expect trusts to have made progress in improving how consultants are managed and realising the expected benefits of the contract," its head Amyas Morse said.

"Trusts need to get consultants strongly involved in achieving the trusts' objectives as well as their own clinical goals."

Health Minister Dan Poulter said junior doctors and consultants needed the right training and appropriate rewards to look after patients.

"Medical contracts need to reward doctors fairly and support high quality training - change in this area is long overdue," he said.

"That is why we announced last month we are starting discussions on changes to the consultant contract and clinical excellence awards, so we get the best value from the £5.5bn spent on consultant pay every year."