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Welfare reform on the Web ( February 2007): National Health Service - funding

Massive rise in GPs’ salaries worsens the NHS crash crisis

J. Laurance

The Independent, Jan. 12th 2007, p.2

This news piece claims that family doctors are abusing their contracts with the governments by raising their incomes; to the detriment of NHS finances. GP’s rising salaries are part of a dramatics increase in spending on NHS pay. Forty-seven per cent of spending in 2006 went towards higher pay for doctors, nurses and other staff. The article quotes figures provided by the Association of Specialist Medical Accountants. According to their estimates, GPs’ average earnings for 2005-2006 rose to £118,000; a 63 per cent increase in three years. Andrew Lansley, the shadow Health Secretary, blames the government’s overgenerous contract with GPs for the situation. Under the 2004 contract, the government promised rewards for GPs that exceeded agreed targets. The unexpected success rate has led to primary care trusts struggling to pay the increased salaries. The government has defended the contract and blamed GPs for taking more than their due. Ministers accuse the GPs of ‘helping themselves’ to NHS funds allocated to their practices. GPs are now taking 45 per cent of the gross sum allocated for their practices; a rise from 40 per cent, leaving less for patients. Workload has been reduced; i.e. out of hour’s service has been cut and doctors are now only responsible for patients from 8am to 6:30pm on weekdays. The chairman of the British Medical Association defended the pay rises and claimed that doctors should not be penalised for working harder than the Government expected.

(See also: The Independent, Jan. 12th 2007, p.34; The Daily Telegraph. Jan. 12th 2007, p.8)

Strictly come auditing

A. McKeon

Public Finance, Jan. 26th- Feb. 1st 2007, p. 24-25

This article discusses reforms to NHS finances proposed by the Audit Commission in a report published in July 2006. Two fundamental changes are being implemented in 2007/08: 1) the establishment of a formal system of cash loans to replace ad hoc “brokerage”; and 2) the introduction of a regime where funds for capital expenditure are borrowed rather than allocated. Three further Commission recommendations relating to primary care trusts have been endorsed by the Health Secretary. These are: 1) that the Department should set the PCT allocations and agree three-year funding objectives with the strategic health authority; 2) that PCTs should be able to flex their allocations over the three years; and 3) that they should be encouraged to underspend in order to build up reserves.

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