The new hospital consultant contract is not delivering expected value for money, according to a National Audit Office report.

The report, published today, reveals that the contract, introduced in 2003, has aligned consultants' pay with their contribution to the NHS, resulting in some consultants working the same or fewer hours for more money.

And the NAO survey, of more than 2,000 consultants, showed that despite the extra pay, doctors' morale has been reduced in the process of implementing the contract.

The report reveals that contrary to Department of Health expectations that the contract would extend patient services, trusts and consultants report no change in the services delivered. Nor has it increased hours of direct clinical care.

'There is little evidence that ways of working have been changed as a result of the new contract and, although most consultants now have job plans, few trusts have used job planning as a lever for improving participation or productivity,' it states.

However, 64 per cent of acute and mental health trusts polled reported that the contract has improved the management of consultants and that the average amount of private practice has reduced.