Committee of Public Accounts: Press Notice

NHS PAY MODERNISATION: NEW CONTRACTS FOR GENERAL PRAACTICE SERVICES IN ENGLAND

Publication of the Committee's 41st Report of Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"The new contract for general practitioners in England, intended to deliver benefits by linking GPs' pay to their clinical performance, has so far failed to live up to expectations.

"The contract has made some progress in linking GP's pay to performance. And it has contributed to the increase in the number of doctors working in general practice. But it looks like the new pay for performance system made it too easy for GP practices to achieve high scores - resulting in their earning higher than expected levels of payments. The Department had also underestimated the cost of providing GP services such as out-of-hours care. The result was an overspend of £1.8 billion over the first three years.

"Partners in GP practices are now putting in less time and their productivity has decreased. Only their pay is burgeoning, having increased on average by an eye-watering 58 per cent since 2003.

"The new contract has not led to general practices being opened longer or at more convenient times for patients and has failed to improve services for deprived areas. Recent improvements in opening hours have been paid for out of additional money.

"The new contracts enable Primary Care Trusts to negotiate with GPs the provision of enhanced services to meet the needs of the local population. So far, very few have done so."

Mr Leigh was speaking as the Committee published its 41st Report of this Session which, on the basis of evidence from Department of Health (the Department) and the NHS, examined the contract negotiation, the cost implications, and the extent to which the expected benefits for patients and the NHS are being realised.

For most people their General Practitioner (GP) is the first point of contact with the National Health Service (NHS). Around 33,000 GPs hold some 290 million consultations each year, with GP services costing some £7.7 billion, almost 10% of all NHS expenditure. In 2000, the Department determined that many of its planned improvements in primary care were unlikely to be achieved without a new contract for general practice. Fully implemented in April 2004, the new contract is intended to attract more doctors into general practice through better pay and improved conditions. The NHS is expected to benefit by linking GPs' pay to their clinical performance and by improved accessibility to services through more flexible working.

The NHS has realised some but not all of the benefits from the new contract. Over the first three years, the contract cost £1.8 billion more than originally expected because the Department underestimated the cost of delivering services such as out-of-hours care. The level of GP performance, as measured by the Quality and Outcomes Framework, also exceeded estimates and led to additional expenditure. The Department believes the cost of the contract is now under closer control and that by the end of 2008 it will have recovered any overspend.

The Department has succeeded in increasing the number of GPs working in the NHS above the target it set itself: more than 4,000 additional GPs from March 2003, an increase of 15%. It has also been successful in introducing a pay for performance system which has increased the consistency of care for long term conditions. The new contract has helped increase the breadth of services provided in primary care, but has had less success in improving access to primary care, particularly in more deprived areas.

GP partners have benefited most from the new contract, with an average pay increase of 58% and decreased working hours. Other staff, such as practice nurses and salaried GPs, have had only small pay rises despite taking on a larger proportion of the workload in general practice. GP productivity has actually decreased, on average, by 2.5% per year in the first two years of the contract.

Primary Care Trusts have lacked the capacity and capability to commission local services effectively and have not used the contract in a way that fully realises its benefits. They have spent more than they were allocated, but failed to use the contract to provide more convenient opening hours and more general practice services in deprived areas. The Department has now issued central directions to Primary Care Trusts to tackle these issues.