Over-budget consultant contract has so far failed to benefit patients, says The King's Fund

The new contract for senior hospital doctors in England has cost a great deal more than anticipated and as yet there is little evidence to show it is benefiting patients, a new report from The King's Fund says today.

Assessing the New NHS Consultant Contract - A something for something deal? is the first independent report on the impact of the consultant contract in England, based on a case study of five NHS trusts in London and interviews with key national figures.

The new consultant contract, implemented in 2003, has seen large increases in consultant pay and pensions, but the study found little evidence so far to show consultants' working practices have changed.

It concludes that a combination of rushed implementation, a serious underestimate of existing consultant workloads and a lack of national guidance has made it difficult for hospitals to use the contract to bring about improvements for patients.

The report highlights evidence from the Department of Health showing the contract cost £90 million more to implement than was planned. Consultants' pay has increased substantially over the last four years with starting salaries rising by 36 per cent since 2001 (from £50,810 in 2001 to £69,298 in 2005). The increased costs have put considerable pressure on hospital budgets and have contributed to the size of deficits faced by some trusts, according to the report.

But the report does identify potential advantages from the new contract. It welcomes greater transparency about the hours consultants work in the NHS and the duties they undertake. It also supports the increased recognition of the amount of work carried out by consultants in the NHS.

Report author Professor James Buchan said:

'The consultant contract was supposed to benefit not only consultants but patients and the health service in general. But even though the new contract is still relatively in its infancy, there are significant concerns that some NHS organisations do not seem to have complete plans in place to ensure that the contract can be used to benefit patients directly.

'There needs to be more emphasis at both national and local levels on how the contract can be used as a tool to benefit patients. That may be by looking more closely at consultants' working patterns and ways for managers to help consultants to work more productively.'

Several aspects of the contract do not appear to have been delivered as intended. The report says the idea behind the contract was that consultants would sit down with managers and discuss how to plan their work around the future needs of the service. However, the reality so far of job planning has shown it to have been mainly an exercise in filling forms showing what consultants have already been doing. Assumptions around how much work consultants do for the NHS have also meant that new rules designed to make sure that consultants put the NHS before their private work have also not been particularly effective.

Key recommendations in the report include:

  • the need for the Department of Health and NHS Employers to provide clear national guidance on how the contract is expected to deliver improvements for health services and patients, for example a framework for monitoring how the contract contributes to patient care is required.
  • the requirement for NHS trusts to link consultant job plans with their own strategic goals as well as the objectives of the health service in general; and
  • the need to equip health service managers with tools to encourage consultant productivity, such as stronger links between pay and performance.

The King's Fund chief executive Niall Dickson said:

'Consultants are at the core of the NHS and deserve to be paid well for the work they do. However, the government promised that this contract would also bring benefits to patients and so far that does not appear to have materialised. This is a limited study and these are early days but it raises profound questions about the effectiveness of the deal and what now needs to be done to ensure that it delivers greater productivity.

'Now more than ever, as the NHS finds itself under severe financial strain, there is an imperative to show that patients are getting value for money from reforms taking place in the health service.'

The report concludes by saying lessons can be learnt from the consultant contract when looking at the implementation of other pay reforms such as Agenda for Change, the GP contract and the new contract, currently being negotiated, for staff and associate specialist doctors.

Read the report: Assessing the New NHS Consultant Contract - A something for something deal?

Notes to editors: 

  1. There are approximately 30,000 consultants working in the NHS in England.
  2. The contract assumed that consultants would on average undertake 10 programmed activities (PAs) a week and, in order to participate in pay progression, would have to offer the NHS an extra session before they could undertake private practice work. Trusts are able to contract individually for extra PAs and the research presented in this report shows that many consultants are regularly working to an 11 PA week meaning private practice levels are unaffected.
  3. For further information or interviews, please contact the King’s Fund media and public relations office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185.
  4. The report Assessing the New NHS Consultant Contract: A something for something deal? by Sally Williams and James Buchan, is available to download free from Wednesday 10 May.
  5. The King’s Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications; information and library services; and conference and meeting facilities.