The rising cost of GPs' salaries has created a £160million overspend in the NHS in Scotland over the past three years, according to official figures released today.

Making savings elsewhere to plug the gap will almost certainly have a damaging effect in other areas of healthcare, accountants say.

A report for Scotland's Auditor General shows that since GPs began working to a new contract in April 2004, their earnings jumped by almost 40 per cent in two years, from £65,180 in 2003-04 to an average of £90,127 in 2005-06. This increase has been mirrored by a rise of 40 per cent to £706 million in the cost of provision of general medical services.

Audit Scotland said that the money would have been diverted from other funding strands within the healthcare budget. A similar financial assessment carried out last year by the Wales Audit Office showed that savings made in national drugs budgets were used to meet rising pay for GPs.

The new contract was introduced to meet doctors' concerns about workloads and payment levels, which had prompted a quarter to consider career breaks. It was aimed at making funding levels fairer and directing greater resources into areas where the workload was highest, including economically and socially deprived areas.

However, even British Medical Association negotiators were surprised by the generosity of the settlement made by Patricia Hewitt, who was then Health Secretary.

Though it effectively cut GPs' basic pay by 6 per cent, they were able to top up their earnings by meeting targets in a new performance-related bonus scheme, the Quality and Outcomes Framework (QOF).

This points-based system enables GPs to earn more for providing patient data across a range of illnesses, and for monitoring the prevalence of conditions such as diabetes and of smoking and alcohol-related disorders. It also rewards good practice management.

The effect on pay has been dramatic. The most recent figures published by the NHS Information Centre show that under the QOF system more than 300 GPs in Britain earned in excess of £250,000 within two years of the introduction of the contract, while another 815 earned more than £200,000 in 2005-06.

But while these high-earners are a minority, it is clear that most GPs have enjoyed above-inflation salary rises. Across Britain, net income has more than doubled since 1997 and today about 80 per cent of Britain's 43,000 GPs - 4,721 of them in Scotland - earn between £90,000 and £150,000.

“There are early signs that the contract has addressed GPs' concerns about pay and work-life balance, and has improved services for some patients,” Robert Black, Auditor General for Scotland, said.

“However, there was insufficient planning for implementing this contract, partly due to a lack of available data on primary care and an underestimation of the costs of the contract. The challenge for the Scottish government, the NHS and GPs is to build on the early signs of improvement and to deliver better outcomes for patients.”

The report added that the new GP contract had helped to meet the needs of local populations, and found that 12 out of 14 of Scotland's health boards felt that the contract had made it easier to develop tailored services.

Dr Dean Marshall, chairman of the BMA's Scottish General Practitioners Committee, said: “Already patients are reaping the benefits, but without better co-operation between government and GPs, these may be short-lived. In the last three years practices have seen cuts in their core funding which adversely affects the services they can provide to patients.”

Mary Scanlon, the Tory health spokeswoman, said: “Family doctors across Scotland have risen to the challenge of delivering more health care nearer patients homes resulting in better monitoring and better information on long-term conditions such as asthma and diabetes.

“Given the trust and familiarity between patient and GP, this relationship could be used to assist and support the tackling of the alcohol problem in Scotland.”

The Royal College of Nursing Scotland said that pay for practice nurses had not risen at rates in proportion with those achieved by doctors.

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