Select Committee on Public Accounts Fifty-Ninth Report


Conclusions and recommendations


1.  The Department underestimated the cost of the new contract by at least £150 million. It did not model its financial assumptions in a rigorous way and did not draw, for example, on all available workload data. The Department should use sufficient, relevant and reliable data to cost new policies more accurately.

2.  The Department did not pilot the new contract before implementation, and it underestimated the scale of change in introducing the new contract. The implementation of the new contract was rushed and hospital trusts concentrated on getting new consultants on to the new contract, rather than planning how to use the contract to improve the delivery of services. Major new Human Resource policies should be fully piloted within the NHS before implementation to test any assumptions and effects.

3.  Many hospital managers negotiated more hours with consultants than their NHS trust could afford. NHS trusts failed to set a cost envelope and clinical managers agreed hours of work based on historical patterns of working, which they could not afford. In taking the contract forward, NHS trusts should set boundaries within which managers should negotiate individual contracts based on a clear understanding of what work the trust needs and can afford.

4.  Productivity of consultants has decreased, consultants are now working fewer hours than they did under the old contract, and activity per consultant has reduced. The Department expected that the new contract would deliver productivity gains of 1.5% per year through efficiency gains and quality improvements. The Department's original method for evaluating productivity suggests it has decreased by 0.5% in the first year of the contract. The Office of National Statistics has now developed more sophisticated measures of productivity but figures are not yet available for 2005 and 2006. NHS Employers should help NHS trusts identify appropriate ways of measuring and comparing productivity of consultants locally.

5.  NHS trusts with their clinical managers did not have the time or expertise to negotiate or carry out effective job planning. The Department and NHS Employers should develop training aids and tools, such as electronic job plan software, to help managers improve their capability and capacity to carry out effective job planning, and NHS trusts should allocate enough time to medical managers for job planning.

6.  In the first two years of the contract, job planning tended to follow historical patterns of service provision, with insufficient links to organisational objectives and little consideration of redesigning services, such as introducing evening clinics, to meet patient needs. NHS trusts should agree job plans, in partnership with consultants or teams of consultants, which are consistent with organisational objectives and reflect feedback from patients. Whilst job plans should be renegotiated annually, managers and consultants should assess individual job plans more frequently and agree to modifications, where appropriate, if they fail to meet patient needs.

7.  The proportion of time consultants spend on direct clinical care has not reached the expected 75% level, and NHS trusts have not used the contract to extend patient services, such as providing out-patient clinics at the weekend. NHS trusts should negotiate job plans for consultants based on the Department's objective that at least 75% of their time should be spent on direct clinical care. They should use the job planning process, in partnership with consultants, to redesign services and improve the patient experience. NHS Employers should identify and share good practice in using job planning to extend patient services and tailor them to patient need.

8.  Consultants' pay has, on average, risen by 27% in the first three years of the contract compared to the Department's prediction of a 15% increase. Higher pay has helped improve recruitment and retention and has halted a rising trend in the amount of private practice carried out by NHS consultants. The increased pay will only be justified, however, if the expected improvements to productivity are achieved. In return for their increased pay, consultants should increase their support for service redesign with the aim that productivity gains will be achieved by working differently.


 
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Prepared 22 November 2007