Radical proposals on changes to how consultants are rewarded in the NHS – including proposals to create a new pay grade - will form the basis of wider discussions on pay, terms and conditions for doctors, the government said today.

The Doctors’ and Dentists’ Remuneration Review Body report into clinical excellence awards was published this morning, almost 18 months after it was first completed.

It concludes that the current system - which rewards length of service more than the level of contribution or performance – does not provide an incentive for development and is not a feature of comparable professions.

Proposals include:

  • Introduction of a “principal” consultant grade for the top 10 per cent, paid up to £120,000 maximum basic salary;
  • Limit pay for all satisfactory consultants to the first five pay points which is £83,829;
  • Local clinical excellence awards be awarded annually and national awards for a maximum of five years;
  • Awards are non-pensionable and not treated as part of the salary or subject to pay protection;
  • Rewards should be capped nationally at £40,000 and locally at £35,000.

In a written statement health secretary Jeremy Hunt said the government accepted most of the key principles” of the report but disagreed over issues of pensionability

He said longer-term national awards could remain pensionable and he would be “prepared to consider affordable proposals on pensionability of future local awards”.

Mr Hunt also announced the government would “shortly” be launching a consultation on “discontinuing two anomalies” in the current scheme. HSJ understands this refers to the existence of pay protection for the value of a CEA, even if a consultant has lost the reward following review, and the practice whereby a consultant who received a distinction award before 2003 can retire and then have that reward reinstated if they return to work.

The Department of Health, which also today published a report on junior doctors’ contracts, said it would use both the reports to “look at medical pay as a whole…so that it can offer national terms and conditions that are affordable and fit for purpose”.

Health minister Dr Dan Poulter said: “Clinical contracts must support high quality training, and change in this area is long overdue. Reviewing the contract will ensure that doctors have the right training and rewards to look after patients from the moment they are newly qualified until the day they retire as an experienced consultant.”

The government wants the changes to be implemnted in April 2014.

The review body report also suggested employers should decide which consultants are eligible for local award schemes, rather than consultants applying for them. Typically, the review body concluded, up to 25 per cent of consultants in an organisation should be eligible for awards.

Dean Royles, director of the NHS Employers organisation, said: “The way patients are cared for is changing rapidly. We know care provided at the weekend could be much better. NHS Employers welcomes the opportunity of re-negotiating both the junior doctors’ contract and consultant clinical excellence awards to better align them to patient care. This offers a chance to revisit two areas of doctors’ pay that have become barriers to modernising services and training.”

Chair of the British Medical Association Dr Mark Porter said the organisation would consider the proposals but described it as encouraging the government was committed to national negotiations.