Examination of Witnesses (Questions 100
- 119)
THURSDAY 1 DECEMBER 2005
SIR NIGEL
CRISP, MR
JOHN BACON,
MR RICHARD
DOUGLAS AND
MR ANDREW
FOSTER
Q100 Dr Taylor: Thank you. Having
got that off my chest, going on to manpower costs and shortages.
This is really a further attempt to explore the deficits, which
I think are largely hidden because there are episodes of creative
accounting. The fact that many trusts are faced with plans to
make pretty draconian savings for the year 2006-07 suggests that
many, many more than the 28% are really on the balance. I want
to try to explore the cost of the consultant contract. Tables
1.2.2(a) and 1.2.2(b) tells us that in the year 2002-03 consultant
earnings were just about £2.5 billion, and, for the year
2003-04, the increased cost, because of the consultant contract,
was £133 million. For the year 2003-04 we would expect the
total cost of consultant earnings to be those two figures added,
which is about £2.67 billion. Is that what it worked out
at? I am trying to get at whether the estimates of this particular
contract were accurate. Because it keeps being thrown at me, and
I suspect some of us, that in fact the Department underestimated
the Agenda for Change we have mentioned—the GP contract,
the consultant contract—and this is one of the huge reasons
why so many PCTs are in deficit or avoiding it by creative accounting.
Mr Douglas: I think we go back
in some ways to the earlier question about whether there are things
the Department got wrong. On the consultant contract, our latest
estimate of the figures is that it has probably cost us in the
region of £90 million more than we anticipated. When we said
by 2005-06 it would have cost us £250 million, our latest
estimate is that it has probably cost us in the region of £340
million for a whole variety of reasons. This is one of the areas
where I would have to say in the end that the forecast we produced
has not proved to be absolutely correct.
Q101 Dr Taylor: So what was the figure?
Mr Douglas: The consultant contract
figures. We have done quite a lot of work with the NHS about actual
costs around this. We were getting information that at one time
suggested it was costing about £150 million more than we
had anticipated, and we reflected that last year in the tariff
payment, in the way we calculate the tariff payment for trusts.
Having done further work, we now believe it has cost us around
£90 million more than we expected for the consultant contract.
Q102 Chairman: Where will the £90
million come from for this shortfall in your estimate?
Mr Douglas: It effectively has
to be met from all the savings within the overall budget. So we
have on the renegotiation of the PPI (the pharmaceuticals contract)
effectively released between £300 and £400 million a
year that would not have been planned for, so last year the prescribing
growth was about 6% against what we would normally expect to be
9%. This year we would expect prescribing growth to be just about
flat, so almost no increase to the drugs bill at all. They are
offsetting savings in other areas to at least cover some of the
additional costs that have come through on the contract.
Q103 Chairman: Will that be passed
down to each—
Mr Douglas: That is already there
effectively in the baselines of PCTs.
Q104 Chairman: That will be passed
down for the shortfall on an individual trust basis.
Sir Nigel Crisp: It is worth saying
that the general point is, just as we did not get the figures
right for the consultant contract—and there are some other
issues on the GP contract which I know you are going to come onto—we
also under-estimated the savings we were going to make from our
drug negotiations, and those go directly to PCTs because they
are paying for the drugs, so they are actually paying less, and
actually these are pretty much in balance, those two figures.
Chairman: Thank you for that.
Q105 Dr Taylor: The GP contract.
I know you have given us some figures and perhaps you could explain
that. I do not think you saved on the GP contract.
Mr Douglas: We are delivering
a lot more from the GMS contract than we planned to do, but, because
we are delivering a lot more, the GMS contract will cost us more
as well. So, largely due to overachievement on the quality and
outcomes framework, we will be spending around £300 million
more on the GMS contract than was originally planned. But we have
got a lot for that.
Q106 Dr Taylor: About £300 million
more, but you are getting something for it.
Mr Douglas: Getting a lot for
it.
Sir Nigel Crisp: Patients are
getting a lot for it, is the real point.
Q107 Dr Taylor: All right.
Mr Douglas: On both of those contracts
we need to look not just at the costs of these but at the benefits
we have got from it as well and the extent to which we have potentially
saved other costs in the system for the contracts as well.
Q108 Dr Taylor: Coming on to the
out-of-hours service, from memory I think the prediction was that
quite a large proportion of GPs would agree to take on the out-of-hours
service, and in fact it has turned out to be a very, very much
smaller proportion than was expected. I gather from the answer
you have given us that it is very difficult to separate the exact
cost of out-of-hours services, but can you give us any feel? I
remember in this Committee that when John Hutton was in the hot
seat he told us he was expecting the out-of-hours service to cost
about £300 million more than the existing arrangements. Can
you give us any feel about how that has panned out?
Mr Bacon: The straightforward
answer, as John Hutton said to you before, is that we know how
much we allowed into the system, which was slightly over £300
million. We have not—and it would be quite difficult to
do—collected precisely how much is actually being spent
to compare.
Q109 Mike Penning: Why is it difficult?
Mr Bacon: Because we are talking
here about 8,500 practices and the whole of the country and we
simply do not collect data at that level of granularity.
Q110 Mike Penning: Taxpayers' money
is being spent in other ways.
Mr Bacon: Local organisations
will know, but we have not collected at that level of granularity.
Forgive me but there is a plethora of numbers we could collect
at that level of granularity, but the overhead bureaucratic cost
of doing so would be tremendous, because we are talking here about
the way in which 8,500 practices have decided to organise it.
We know that, prior to introducing the changes, very few GPs actually
delivered out-of-hours: virtually all of them were contracted
into some form of cooperative or some form of service where they
did not directly do that. We know now that, roughly speaking,
the same number of GPs, less than 5%, do their own out-of-hours
and services are contracted for at PCT level. I am sure, if you
wanted us to, we could collect that data, but we have not currently
done so.
Q111 Dr Taylor: Before, if GPs were
covering out-of-hours care as part of a cooperative, they did
not get paid extra for that. That was part of their existing contract.
Mr Bacon: Part of their existing
contract was to provide out-of-hours. They could locally sub-contract
it to somebody else.
Q112 Dr Taylor: Yes, but if they
were doing it themselves, they were paid as part of their standard
pay.
Mr Bacon: It is part of the contract
for delivery. Part of the contract was to provide 24-hour cover
for patients. Part of the change in the process—I think
to the benefit of both general practitioners and patients—is
that that is no longer part of their requirement. We recognise
that by the provision of the £300 million.
Q113 Dr Naysmith: It is bound to
be more expensive, is it not, if GPs are not themselves forming
cooperatives?
Mr Bacon: Not necessarily.
Q114 Dr Naysmith: It is likely to
be, shall we say.
Mr Bacon: I agree, if it is being
provided by another organisation specifically set up to do so,
then it could be.
Mr Foster: Could I add to this.
Where a GP decides not to provide out-of-hours services, they
have to forego earnings of £6,000 a year, which then goes
into a pot to buy those services elsewhere.
Q115 Dr Naysmith: Which would probably,
I suspect, be more expensive.
Mr Bacon: Not necessarily
Q116 Dr Taylor: Does it balance it,
roughly?
Mr Foster: We have not, as has
been answered earlier on, got the answer to that question.
Q117 Dr Taylor: The other suggestion
that is being made by the Secretary of State is that even though
with the contract the Government has agreed that GPs do not have
to work on Saturdays, it is going to be suggested they should
be doing Saturday morning clinics. Where is the cost of that going
to come from?
Mr Foster: The current position,
as I think John Hutton announced last year, is that we expect
each PCT to ensure there is access to general practitioners on
Saturday. That is not necessarily access to "your" general
practitioner. What we might do will be the subject of proposals
which may be in the White paper which we are expecting to launch
shortly, having done the consultation. We have not yet moved to
any firm proposals on that.
Q118 Dr Taylor: When is that White
Paper coming out? That is what we would love to know.
Sir Nigel Crisp: Somewhere around
the turn of the year is where I think we are.
Q119 Dr Taylor: Before or after Christmas?
Sir Nigel Crisp: I am not yet
entirely sure.
Charlotte Atkins: During the recess.
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