News Extra

NHS pay rises must lead to better services, say MPs

BMJ 2004; 329 doi: (Published 21 October 2004) Cite this as: BMJ 2004;329:940
  1. Jeremy Davies
  1. Manchester

    The Department of Health must ensure that the extra money it is spending on doctors' and other health professionals' pay is matched by productivity gains, a cross party committee of MPs warned this week.

    The House of Commons Public Accounts Committee made its comments in a progress report on the three year, £61bn ($110bn; €88bn) package of increased public spending announced by the chancellor of the exchequer, Gordon Brown, in July 2002. In the report MPs emphasised that the government departments that received the biggest funding increases—the Department of Health, the Department for Education and Skills, and the Department of Transport—must assure themselves that spending on higher salaries is “genuinely needed to attract more skilled or highly qualified staff.”

    If assurance checks are omitted, “additional resources for service improvement can tend to leak away into higher pay without matching productivity improvements,” the report said. The scale of extra funding has created a “heightened risk of [departments] relaxing financial discipline,” meaning that the extra cash may “not be used as a means to expand staffing capacity and improve its quality but instead go to fund pay settlements for existing staff with no consequent improvement in the quality of services … or the level of productivity achieved.”

    The Department of Health should retain sufficient leverage to redress “pockets of poor or failing performance” and should engage with frontline staff to “identify and tackle the reasons for any unacceptable disparities in service quality,” the committee added, citing variability in GP services as one area to focus on.

    “Where disparities are unacceptable, departments need to incentivise, provide support and, where necessary, penalise delivery agents to bring up their level of performance to that of the best performers,” the report said

    The Department of Health should also tackle “significant weaknesses” in its current measures of NHS productivity, the committee claimed, referring particularly to problems with the NHS's cost weighted efficiency index—a measure used to calculate the ratio of growth in NHS activity to growth in NHS spending—which does not take service quality into account.

    A BMA spokesperson said measures of NHS activity must consider quality of care first: “Doctors treat patients as individuals. This is not a production line producing widgets.”

    A Department of Health spokesperson said it is “vitally important that the public sees benefits from the record investment going into the NHS. Waiting lists are going down, death rates from cancer and heart disease are falling, and there are more doctors and more nurses than ever before.

    “We're cutting central bureaucracy and diverting resources to the frontline, but [the Department of Health] retains sufficient leverage to ensure uniformity and high quality of service provision.”

    In a report also published this week, the Office for National Statistics estimated that between 1995 and 2003 the “output” of the NHS increased by 28%, compared with growth in NHS “inputs” of between 32% and 39%. The average annual change in NHS productivity was between −1% and 0% over the same period.

    Increased Resources to Improve Public Services: A Progress Report on Departments' Preparations, published by the House of Commons Public Accounts Committee, is available at Health Service Productivity, published by the Office for National Statistics, is available at

    View Abstract

    Sign in

    Log in through your institution