NHS consultants pay deal condemned

The National Audit Office (NAO) said it was "regrettable" that the new consultants' contract, agreed in 2003, has so far failed to deliver promised improvements in productivity and patient services.

The NAO said that the implementation of the contract in England for the first three years had cost £715 million - £150 million more than the Department of Health originally estimated.

In that time, the average consultants' pay rose to £110,000 - an increase of more than 25% - while the average number of hours worked fell from 51.6-a-week to 50.2 - a 1.4 hours-a-week decrease.

The NAO report acknowledged that the new contract had been intended to reward consultants "more appropriately" for their NHS work, while improving the way they were managed. However, it said that the result was that they were now providing less direct clinical care to patients than they had been before.

Although there was an 11.3% increase in the number of consultants working in the NHS in the two years following the agreement of the contract, the amount of consultant-led activity rose by only 4%.

The findings are a major embarrassment to the Government, which promised that the new contract would be a "something for something deal", where consultants would only be paid more if they did more for patients.

The head of the NAO, Comptroller and Auditor General Sir John Bourn, said: "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."

Edward Leigh, the chairman of the Commons Public Accounts Committee which oversees the work of the NAO, added: "The bottom line is that the Department of Health has increased consultants' salaries without demonstrating any extra productivity in return. This is one more example of weak financial management by the Department of Health. It drove through the new pay deal with scant regard for proper evidence and solid financial forecasting."