Letter from Alan Milburn to Dr Paul Miller and Diane Jeffery, chairman of the NHS Confederation
17 April 2003
Dear Paul and Dianne
Improving rewards for NHS consultants
1. I wrote to Dianne and to Ian Bogle on 23 January setting out our proposals for a new framework of incentives and rewards for NHS consultants, alongside wider plans for modernising medical careers. I am now writing to set out how we intend to proceed, taking into account the range of views we received during our recent consultations.
2. Our underlying objectives remain the same, namely to:
- offer greater rewards for NHS consultants so that more NHS patients benefit from their time and skills
- give greater reward to those consultants who do the most for the NHS
- ensure that investment brings with it reforms in the way the NHS delivers patient care.
3. We have listened carefully to the views raised during consultation and have made a number of changes to the guidance as a result. In addition, we are taking (as described below) specific action to remove what many consultants still clearly regard as the main barrier to accepting the new contract, namely the perception that there would be compulsion to work on weekends or evenings. I attach the revised, final guidance that we are now issuing to the NHS. We consider that this provides a very strong basis for ensuring that this new investment – of £133 million this year rising to around £250 million by 2005/06 – delivers significant benefits for NHS patients and for NHS consultants.
4. The framework allows significant flexibility for NHS Trusts and consultants locally to invest these new resources in ways that are sensitive to local circumstances. We would now urge NHS employers and consultants locally to engage in a sustained dialogue about how to make the most of these new opportunities, both to improve recognition for the excellent work carried out by so many NHS consultants and to help drive up further the quality and efficiency of patient services. The resources are now available to NHS consultants. I hope that early local agreements can now be reached so they can be spent for this purpose.
Local implementation of the consultant contract
5. Some have continued to press for a further national re-negotiation of the consultants’ contract. The ‘no’ vote of course was very disappointing, given that all the parties to those negotiations felt able to recommend the contract to consultants without reservation. It was, and is, a contract that will fairly reward consultants properly for the excellent and complex work they do and properly address issues of workload and quality. It took at least two years to reach agreement on the contract. A re-negotiation could only be protracted and delay still further the significant new investment in consultant pay that is now available.
6. For these reasons, we cannot see the grounds for re-negotiating a contract which, even with hindsight, seems an excellent deal for doctors, for patients and for the NHS.
7. However, we have continued to listen carefully to the views of doctors who rejected the contract. Many have told us they voted ‘no’ because they felt that the framework appeared to convey the notion of compulsion to work on weekends or late evenings. Many doctors considered this inconsistent with a professional contract. They feel that scheduling of work should always be a matter for agreement between local medical managers and consultants.
8. We have already made clear that the contract was not in any way intended to force consultants into working at weekends or in the evening. In the light of these concerns, however, it is important that there is local flexibility on how this aspect of the contract is implemented. I will, therefore, now ask NHS Trusts, when they discuss the options in the framework with their consultants, to make clear that local implementation of the contract would not mean scheduling non-emergency work at weekends or in the evenings without the agreement of individual consultants. I hope this will remove one important barrier that some consultants have said stands in the way them accepting the new contract.
9. We do of course recognise that there will still be a mixture of views about the new contract . As I have said, we respect the decision of those consultants who do not wish to take it up. That is why we have consistently said that NHS Trusts should only look to implement the contract locally where there is a high level of consultant support for doing so.
10. We have heard some concerns that it is difficult for NHS Trusts and consultants to take a final view on the option of implementing the contract without having detailed terms and conditions of service available. The Department will be making available by 5 May some model terms and conditions for this purpose, based on the framework agreement of June 2002. Employers and consultants will, though, have flexibility to agree precise terms, conditions and guidance locally within the parameters set by the framework agreement.
Consultant incentives
11. We have also made a number of changes to the guidance on consultant incentive schemes to take into account comments on the draft that we published on 23 January. I attach the definitive version of the guidance that we are now issuing to the service.
12. There appears to have been a misperception that incentives would be intended to make consultants work longer than they already do. This is not the case. The great majority of consultants work extremely hard for the NHS. We are committed to helping the service find better ways of controlling workload, for instance through consultant expansion, through more effective job planning, and through greater delegation of roles to other staff.
13. The principle underpinning the proposed incentive schemes is that there should be greater rewards for those consultants who achieve the biggest improvements in quality and efficiency of patient care through their overall work for the NHS. The funding is not intended to pay for extra sessions. I hope the revised guidance makes this point more clearly. The Modernisation Agency is developing an impressive portfolio of evidence that better ways of working produce major gains in terms of both quality and efficiency.
14. What also emerged from the consultation was a perception in some quarters that the proposed framework was intended to reward only consultants in specialties directly covered by waiting times targets. This is not the case. It is intended to benefit consultants in all specialties. There may, in particular, have been some confusion between the guidance on the new capital incentives scheme (included for information as part of the draft guidance) and the new framework for consultant incentives.
15. As the main body of the draft guidance made clear, the proposed consultant incentive schemes should apply to all specialties. The choice of performance objectives is a matter for local decision. Where consultants are working in areas which contribute directly to access objectives in Local Delivery Plans, we would typically expect to see incentive schemes address the contribution that consultants can make to achieving those objectives. The guidance is, however, explicit that performance measures should also, where appropriate, cover other measures of activity and service objectives such as quality and service improvement.
16. Schemes should also of course apply to clinical academics and equally to consultants on whole-time and part-time contracts.
Piloting a benchmark activity scheme for procedure-based specialties
17. The guidance sets out a national framework within which there is local flexibility to design incentive schemes. We have also, however, decided to respond specifically to concerns that there may be particular challenges (for instance in relation to data quality and attribution) in setting up schemes that properly reward activity in procedure-based specialties.
18. To address these concerns, four Strategic Health Authorities (Avon, Gloucestershire and Wiltshire; Kent and Medway; North East London; and Surrey and Sussex) have been invited to work with the Modernisation Agency to pilot in around 10-12 sites a particular kind of incentive scheme based on benchmark levels of activity. The approach they will be testing, which we described in outline in the draft guidance, will be to reward consultants who exceed a defined benchmark level of case-mix adjusted activity in their specialty, by giving a payment for each unit of activity above the benchmark, probably up to a defined maximum. We shall announce the participating Trusts next month.
19. This benchmark scheme will not of course affect in any way the ability to design other incentive schemes to reflect the different contributions of other specialties in these 10-12 sites, nor the funding available for such schemes. Nor will it affect the ability of other NHS Trusts to go ahead with their own locally-devised incentive schemes as an alternative to the local implementation of the contract.
Clinical excellence awards
20. We are grateful to both of your organisations for their continued involvement in helping to refine proposals for the new clinical excellence awards scheme. We are, I think, very close to being able to firm up the basic design of the new scheme and to proceed with the more detailed work needed to introduce the scheme, ensuring that the first awards are made in 2004/05. Our recent consultation has confirmed that there is continued support for the principles of the new scheme.
Job planning standards and code of conduct on private practice
21. Following discussion with the BMA, NHS Confederation and other stakeholders, we are today issuing proposed standards for consultant job planning and for the relationship between private practice and NHS work, in line with the approach set out in my letter of 23 January. Both documents are enclosed with this letter.
22. The job planning standards are intended to help employers and consultants ensure the best possible use of consultant resources, clarify the support consultants can expect from employers, and support varied and rewarding consultant careers. The standards are also intended to help employers and consultants identify how individual or team objectives, including the objectives that will underpin local incentive schemes, can most effectively be linked with local service needs and priorities.
23. The Code of Conduct on private practice provides a clear set of standards to help define best practice in managing the relationship between NHS and private work. This will improve transparency and protect consultants from any real or perceived conflicts of interest.
24. Where these documents set out proposed standards of best practice for consultants themselves, the criteria for incentive payments and clinical excellence awards will include evidence that consultants are meeting these standards.
25. We will be reviewing both sets of standards within six months, taking into account views from the profession and the service.
Responding to concerns about a doctor’s practice
26. Following my letter of 23 January, we have developed further a new approach for responding to concerns about a doctor's practice. The new emphasis is on keeping doctors up to date and fully competent for the job they are doing. We recognise that the existing suspension and disciplinary procedures need to be updated to reflect this new approach and to bring them in line with the latest employment law and practice.
27. We are now preparing to issue some specific proposals to you and other stakeholders on which we will be seeking your views. As a result of these changes we will replace the existing suspension and disciplinary guidance and redundant procedures such as the paragraph 190 appeals.
Implementation support
28. The Consultant Contract and Incentives Implementation Team, which is based in the Modernisation Agency, has prepared a programme of support for NHS organisations in introducing the new consultant contract locally and in introducing local incentive schemes. This includes a series of tailored briefing sessions and workshops for representatives of Strategic Health Authorities, NHS Trusts and PCTs. The Implementation Team will also work closely with the NHS to help evaluate different approaches to introducing local incentives.
Conclusion
29. We have made available a substantial level of investment to provide additional rewards for consultants through the new framework. The new resources represent around an extra 6 per cent for consultant pay in 2003/04, rising to around 11 per cent in 2005/06 – on top of the basic pay awards that will be made on the DDRB’s recommendations and on top of extra investment in discretionary points, distinction awards and clinical excellence awards.
30. This new programme of work presents major new opportunities for employers and consultants locally, using these new resources to recognise and reward the excellent quality of NHS patient care provided by so many consultants. The approach we are introducing will also, I believe, provide much valued flexibility for local health services to use the extra resources in ways that best support new ways of working, growth in capacity and productivity, and improvements to consultants’ working lives.
31. I am writing to individual consultants and SpRs to set out the approach we are now taking.
Yours sincerely,
Alan Milburn
Improving rewards for NHS consultants : a national framework