The NHS should have made more progress in improving its management of hospital consultants since the introduction of a 2003 contract giving them a significant pay increase, the National Audit Office has found.

In a report on the implementation of the contract, published today, the NAO stated that most of its expected benefits had been “fully or partly realised”, improving the value for money of consultants to the NHS.

However, NAO head Amyas Morse said that given the size of the pay increase given to consultants under the 2003 contract, “it is reasonable to expect trusts to have made more progress in improving how consultants are managed and realizing the expected benefits of the contract”.

The report stated that total earnings per full-time equivalent consultant increased by 12 per cent in real terms in the year the contract was implemented.

However, it found that 10 years on there were still “a number of trusts who have not fully implemented key elements of the contract and good practice management”.

For example, it stated:

  • pay progression was “the norm”, with less than a third of trusts stating that pay progression for all or most consultants depended on them achieving objectives set out in job plans or appraisals;
  • 19 per cent of consultants had not had an appraisal in the last year;
  • around a fifth of trusts did not benchmark clinical outcomes for consultants in the same specialty area – or did so less than once a year – despite 66 per cent of consultants saying they were motivated by comparing their performance against their peers;
  • 61 per cent of hospital consultants were currently in receipt of a “clinical excellence award”; the NAO said that these awards were intended to “reward performance above and beyond the norm”.

The NAO added that, despite the contract providing a “clear structure for paying for additional work at contractual rates, most trusts still use locally agreed rates of pay for additional work outside job plans”.

It reported that the average rates paid by trusts for additional work over the last 12 months ranged from £48-£200 an hour, with a mean of £119.

Depending on where hospital consultants sit on the pay scale, their contractual rates range from £36-£54 an hour.

The NAO made a series of recommendations for the Department of Health, NHS Employers, and NHS trusts.

Among those, it advised trusts to ensure clinical managers had sufficient time to undertake their role, and received “appropriate financial and administrative support” to better plan and allocate consultant time.

NHS Employers director Dean Royles said: “NHS Employers is currently in discussions with the British Medical Association and others about how any future consultant contract can further support the ability of employers and consultants to deliver the best care for patients while also providing a fair and responsive system of reward and career progression.

“In the current tight financial climate it is absolutely right that we take a fresh look at the consultant contract to get best value for patients and taxpayers. There is a compelling case for change.”

Health minister Dan Poulter said: “Medical contracts need to reward doctors fairly and support high quality training - change in this area is long overdue. That’s why we announced last month that we are starting discussions on changes to the consultant contract and clinical excellence awards, so that we get the best value from the £5.5bn that is spent on consultant pay every year.”