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Last Updated: Tuesday, 9 May 2006, 23:00 GMT 00:00 UK
Health reforms 'wasted millions'
Nurse with patient
The government says its reforms are working
Some key government health reforms have been criticised for costing millions of pounds but bringing few benefits.

A new contract for top hospital doctors cost 90 million more than expected and has contributed to NHS deficits, says a report by think tank the King's Fund.

And schemes to build NHS hospitals with the private sector will leave companies with windfall profits of 3.3bn, pressure group Health Emergency claims.

The Department of Health said patients were benefiting from its reforms.

Spending on NHS

The King's Fund looked at what happened at five London hospital trusts after the contracts were signed in 2003.

It said implementation was rushed and that the amount of work carried out by consultants was seriously underestimated.

The contract had aimed to "properly reward consultants so that more NHS patients benefit from their time and skills" and was designed to use a "reward strategy" to secure benefits for patients.

But the report found that despite substantial increases in pay - a 50% rise between 2001 and 2005 - there was little evidence of changes to working practices.

A lack of guidance made it difficult for hospitals to use the contract to improve patient care, it said.

"There has been a tendency by managers in some trusts to regard the contract as a compliance issue - a box to be ticked - rather than a mechanism for change," it added.


However, some advantages were won including greater transparency about consultants' hours and their duties.

There needs to be more emphasis at both national and local levels on how the contract can be used as a tool to benefit patients
James Buchan
King's Fund report author

Report author James Buchan said there needed to be more guidance on how to use it as a tool to benefit patients.

"That may be by looking more closely at consultants' working patterns and ways for managers to help consultants to work more productively."

He called for clear guidance on how to ensure the contract worked for patients and for NHS trusts to link job plans with their own goals.

The Department of Health said NHS pay reform including the new contract had motivated staff to deliver real benefits to patients.

A spokeswoman said it was true there was still some way to go before the full benefits were realised, but said trusts were becoming more proactive in their planning.

'Bleeding millions'

"To ensure that patients get as much access to consultants in the NHS as possible, the new contract requires that consultants should offer up any additional capacity to their NHS employer before undertaking any private work, " she added.

The British Medical Association, which represents consultants, said the report was based on a small sample and was inaccurate in places.

Dr Paul Miller, chairman of the consultants' committee said: "The new contract pays consultants for the work they do - something that was not done under the old contract. The harder consultants work, the more they get paid.

"The government got its sums wrong because it underestimated just how hard consultants are working for the NHS."

For the vast amount of extra money going into the NHS, we are not nearly getting the increase in productivity required
Andrew Lansley

The NHS Employers, which represents health service employers, said the contract remained a good tool for rewarding consultants and improving local services.

Implementation had not been easy, but the focus was now turning to patient benefits.

But it recognised the way funding was allocated caused real problems for some organisations and that costs were higher than expected.

Shadow health secretary Andrew Lansley called for a "turnaround team" to be sent into the Department of Health.

He said: "For the vast amount of extra money going into the NHS, we are not nearly getting the increase in productivity required.

Lib Dem health spokesman Steve Webb said local trusts were picking up the bill for a failure by the government to negotiate and budget effectively.

The report comes as Health Emergency claims firms involved with NHS projects under New Labour's flagship Private Finance Initiative are "bleeding" millions of pounds in profits.

Three recently approved PFI schemes - where the government pays private firms to build facilities through a sort of long-term mortgage - in London, St Helens and Birmingham would net the companies 440 million in profits, the report predicted.

The Department of Health said the group had got its figures wrong and that PFI was delivering for patients.

"Where new hospital PFI schemes are affordable to the NHS, meet patient needs and provide value for money, they will be built as we continue to rectify under-investment in NHS facilities," a spokesman said.

Guide: State of the NHS
05 May 06 |  Health
NHS cash 'wasted by PFI delays'
22 Apr 06 |  Health

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