Pay modernisation: a new contract for NHS consultants in England, fifty-ninth report of session 2006-07, report, together with formal minutes, oral and written evidence

In October 2003, the Department of Health (the Department) agreed a new national contract for NHS medical consultants in England. This report examines the contract negotiation; the cost implications; the effectiveness of the implementation process; and the extent to which the expected benefits for patients and the NHS had been realised. It was intended that employers would get greater control and management of their consultants' workload, and patients would benefit from a more flexible and responsive service. The Department hoped to reward consultants who made the biggest contribution to NHS work and reduce the average number of hours worked, in exchange for increased productivity. These benefits were dependent on a mandatory and rigorous process of workload planning for individual consultants (job planning). The implementation of the contract was rushed and the NHS has yet to see many of the intended benefits. Over the first three years, the Department allocated an additional £715 million to NHS trusts which was £150 million more than originally estimated. Although consultants' pay has, on average, increased by 27 per cent (from £86,746 to £109,974) and their working hours have decreased, there are no measurable improvements in productivity. The Department has succeeded in increasing the number of consultants working in the NHS, from 28,750 in October 2003 to 31,990 by September 2005, but the number of hours consultants work in private practice has neither increased nor significantly decreased. Other intended benefits have not been realised: for example the proportion of time consultants spend on direct clinical care is less than intended, and the contract has not been used to extend and develop new services for patients.