THERE was fresh evidence last week of the huge pay rises that are widely believed to be the cause of the NHS’s cash crisis, which has already led to 7,000 jobs being axed. A survey by the Association of Independent Specialist Medical Accountants revealed that some doctors were now earning as much as £250,000 a year, thanks to generous pay deals brought in by the government three years ago.

A report by the think tank Reform predicted that up to 100,000 jobs could go, as deficits continue to mount and NHS managers struggle to balance the books. Earlier this year accountancy teams from the private sector moved into 18 NHS trusts “named and shamed” by Patricia Hewitt, the health secretary, for running up combined debts of £238m. In all, 62 NHS trusts are over budget.

Primary-care and hospital trusts claim that the huge wage awards made in 2003 are contributing to their problems.

This month Gordon Brown’s business guru, Sir Derek Wanless, who convinced the chancellor to spend an extra £40 billion on the NHS, said salaries were higher than his report intended. Last year the consultant contract went £90m over budget. Agenda for Change (the pay deal for most medical staff) and the GPs’ contract broke the planned budget by £70m and £300m, respectively.

So a report next month suggesting that at least one of the controversial new doctors’ contracts the government has brought in may be beginning to deliver benefits, will be seized on by a beleaguered Department of Health eager to show some payback from the pay deal the government signed two years ago.

Initial unpublished findings by the NHS’s Consultant Contracts Benefit Realisation Team (CCBRT), which has just completed a 12-month visit of 100 hospital trusts in England, suggest that new working practices brought in under the 2003 contract in exchange for increases of £20,000-£30,000 in consultants’ pay, may be beginning to deliver greater efficiency.

The report will show most trusts reporting better working arrangements between consultants, who include the country’s most senior surgeons, and hospital managers.

But the report alone is unlikely to convince accountants. The six-person team, set up by the NHS Institute for Innovation and Improvement, was not asked to cast a strict financial eye over the way consultants work. Its role was rather to help deliver the promised benefits of flexible working in the contract, by passing on examples of good practice from trusts surveyed.

Project leader Professor Frank Sanderson of Liverpool John Moores University admits that his study will not include financial data from all trusts about the benefits of the contract. However, anecdotal feedback from hospitals is positive. “Without a doubt I think the consultant contract has been a good thing. We found that, in general, the contract has been well received, and has made a real difference at hospital level. In talking to trusts we haven’t had negative responses.

They are saving time and they will be saving money, too.”

There are 32,000 hospital consultants, but in recent years they have seemed a bit thin on the ground, with surgeons reportedly walking off the wards to play golf, or do private operations, while NHS waiting lists grew. The new contract was designed to provide a better system of timetabling consultants’ duties for the NHS, and make their schedules more transparent.

But with — until now — a lack of any real evidence of change, the popular press’s perception has persisted of well-paid dilettantes working when it pleased them. So when last month the chancellor awarded consultants only a 1% increase in his budget, there were few to argue their case.

The consultants insist that their pay is not excessive. “After 12 to 15 years of training, a consultant will enter the salary scale at £69,298,” said Stephen Campion, chief executive of the Hospital Consultants & Specialists Association. “Work that out on an hourly basis, and the amount a plumber gets compares well. And at the end of the career, after 30 years’ service, he or she can still expect only £93,000.”

He rejected claims by Hewitt that consultants could, through additional merit payments, earn between £150,000 and £160,000 a year. “Only about 25% of consultants would qualify for that kind of increase. There are more than 30,000 consultants in the country, and a £20,000- £30,000 pay rise puts between £600m and £900m on the wage bill. Billions extra have gone into the NHS in the past two years. Yet our rise is blamed for swallowing all this extra money. It doesn’t add up.”

Whatever the true impact of pay rises, all parties — the government, consultants and hospital managers — agree that more flexible and efficient working practices are vital if the NHS is to overcome its crisis. So far the CCBRT’s findings are the only indication that hospitals may, at last, be delivering efficiencies.

“When the contract came in, hospital trusts did run into difficulties and find themselves spending a lot more money than they planned,” said Sanderson. “Now, in year three of the contract, trusts are sitting down in earnest with consultants to plan their work. I think over the coming years the benefits from the consultant contracts will start to flow through, and this will save money, too.”

He cites one example: the bringing of patients to theatre for operations. “Consultants have to make sure ward staff release patients from the ward on time, and porters get them to the theatre on time, so operations can start on time. Through proper planning, that is being done much more efficiently in one hospital we surveyed. It is making quite a difference in the running of that hospital.”

There is also “better scheduling of the emergency workload, which means that the elective workload runs in a more streamlined fashion. Our team was told that this was due to the new job-planning process, with managers and consultants engaged in a proper dialogue in many places for the first time.”

But for hard evidence of cost savings from its reforms, the government will have to wait until later this year when the National Audit Office is expected to report on the true costs of the contract and what it is delivering. In the meantime financial managers in hospital trusts around the country continue to feel the pressure.

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