New NHS contracts that boosted hospital consultants’ pay by more than a quarter have led to a fall in productivity and the number of hours worked, a report by MPs has found.

Lauded as a “something for something” deal when it was introduced in 2003, the contract was closer to something for nothing, said Edward Leigh, the chairman of the Public Accounts Committee. Consultants’ pay had risen by an average of 27 per cent, but their working hours had fallen and there had been no measurable increases in productivity.

The Department of Health underestimated the cost of the contract by at least £150 million over three years, and rushed its implementation, the committee found. Consultants’ work plans, which were supposed to be more tightly controlled, were drafted too quickly and often consisted of no more than what the consultant already did, or planned to do.

The contract did improve recruitment and retention, however, and enabled consultants to catch up with the earnings of other similarly qualified professionals.

The growth in the amount of private work undertaken by consultants had been halted, and patients were now more likely to be seen by a consultant than they were a decade ago.

The committee concluded that the increased pay would be justified only if it also led to improvements in productivity.

Despite ministers’ expectations that the change would result in a 1.5 per cent annual gain in productivity, the department’s own figures suggested that productivity fell by 0.5 per cent in 2004, the first full year of the contract, the report concluded. Figures for 2005 and 2006 are not yet available.

Mr Leigh said: “Anyone who is puzzled how large quantities of money can be poured into the NHS to so little effect should examine the example of the new contract for consultants.

“The basic aims of the new pay deal were commendable: to make NHS work more attractive to consultants and private practice less so, to give NHS managers more control over the consultants’ working week, and to increase the amount of time they spend on directly caring for patients.

“In the event, the introduction of the deal was rushed, with NHS managers left in the dark by the Department of Health over what it wanted from the contract. The department pushed to get the contract in place at all costs and many managers agreed hours of work with their consultants which the trusts could not afford.”

While the numbers of consultants rose by 13 per cent, total consultant activity increased by only 9 per cent and the number of patients treated per consultant fell year on year until 2005-06.

There was “little evidence” that hoped-for changes – such as provision of weekend and evening clinics – had materialised, and the average consultant’s NHS work fell from 51.6 to 50.2 hours a week.

The new contracts were agreed in 2003 after two years of negotiation between the department and its counterparts in the devolved assemblies, NHS employers and consultants’ representatives in the British Medical Association (BMA).

The department budgeted an extra £565 million for the first three years of the contract, but in the event it had to pay out £715 million. Much of the additional cost was due to higher-than-expected payments for consultants being on call outside regular hours.

The BMA said that hospital consultants were worth every penny of their new salaries and that criticism of their pay was unjust and unwarranted.

Jonathan Fielden, the chairman of the BMA consultants committee, said: “The chairman of the PAC shows a complete lack of understanding about how consultants work.

“He ignores the vast efforts that consultants have made to reduce waiting times and improve patient care and fails to appreciate the enormous pressure that hospital trusts have been under to meet government targets.”

Norman Lamb, the Liberal Democrat health spokesman, said: “You can’t blame consultants for accepting this generous contract, but why did ministers sign off this settlement when it was clearly such a bad deal for taxpayers and patients?”

Explore Health

• Expert Advice

• Health Features

• Mental Health

• Alternative Medicine

• Child Health

• Health Club