Examination of Witnesses (Questions 100-119)
NATIONAL HEALTH
SERVICE
26 MARCH 2008
Q100 Mr Davidson: You ran a deficit
then.
Mr Nicholson: We had to pay that
back. The NHS has paid it back. It has not been bailed out.
Q101 Mr Davidson: You ran a deficit.
The thing that strikes me about this is that it makes much clearer
to us than perhaps it was before the whole idea of GP services
essentially being already privatised. They are run as private
companies, they are run as small businesses and in line with most
small businesses they have a role of profit maximisation. Maybe
I am just old-fashioned with ideas of public service and so on,
but the way this has developed has certainly shaken that. May
I just clarify paragraph 2.16 on page 25? I want to pick up some
of the same points as Mr Mitchell in relation to salaries "an
expectation set out in the pay modernisation business case that
career pay for GPs would increase by 15% on the new contract".
Was that 15% a year every year? Maybe the NAO can tell me.
Professor Colin-Thomé:
We did intend to give general practice more resources.
Q102 Mr Davidson: No, I know that.
Is this 15% each year or 15% over a three-year period?
Ms Taylor: I am told it is across
their career; it was career earnings.
Q103 Mr Davidson: Goodness me, that
is interesting. The plan was then that the career pay for GPs
across a long period would increase by 15% yet in the next paragraph
we see that partners got 18% the first year, 23% the second year,
almost 10% the next year. That does not seem to have been well
planned, does it?
Mr Nicholson: The plan at the
beginning was to increase the earnings of the practices by 36%
over the three years.
Q104 Mr Davidson: It is 15% here.
You have agreed this, so this must be right.
Mr Nicholson: Yes.
Q105 Mr Davidson: You both agreed
this.
Mr Nicholson: Yes, but the difference
is between pay and income because it is a contract for service.
Q106 Mr Davidson: Of course it is;
that is right. That is very helpful. The pay of GPs who are partners
is determined by themselves.
Mr Nicholson: Yes.
Professor Colin-Thomé:
Yes.
Q107 Mr Davidson: So there is a big
bucket of profits and they can just decide how much they want
to take out of that themselves.
Mr Nicholson: They have to provide
the service but they decide.
Q108 Mr Davidson: Once the lorry
comes and tips the money on the pavement they just decide how
much they keep for themselves and how much they reinvest in the
practice and how much they give to their staff, do they not?
Mr Nicholson: But they have to
organise their staff in order to get the money in the first place.
Q109 Mr Davidson: I understand all
that. Once they have done all that several lorries come in with
the money and they tip it on the pavement. Can you just clarify
for me why it is that they decided to take so much of the extra
money for themselves and give so little to their staff? It seems
here that salaried GPs, who presumably were also making a contribution,
got 3% increases. It says here, and you have agreed this, that
the average practice nurse income has gone down in real terms.
The good professor is shaking his head but you agreed this at
the time. If you did not agree this, you should have raised it
at the time.
Professor Colin-Thomé:
We did not disagree with the findings in the NAO Report but how
we analyse the practice nursing one is not systematic enough.
Q110 Mr Davidson: You are either
disputing this evidence or you are not.
Professor Colin-Thomé:
We are not disputing the way they got to the evidence.
Q111 Mr Davidson: That is not our
concern. We take this as being gospel and as being agreed by you,
so if you do not agree with it you should have disagreed with
it before. The evidence here is that nurses are now worse off
in real terms, in the first two years salaried GPs got 1.5% and
the partners filled their boots and every other orifice with gold
and went off. Is that wrong, not morally but factually?
Mr Nicholson: For the two years
after the contract, the proportion that the partners took as profit
went up beyond what it historically had been. That is true.
Q112 Mr Davidson: Is it true also
that their employees are not nearly as well off, that they had
1.5% in the first two years for salaried GPs and an average practice
nurse's salary actually went down?
Mr Nicholson: Yes.
Q113 Mr Davidson: Does that seem
fair to you? All these small businesses talk about their most
important asset being their staff but for partner GPs the most
important question is themselves really, is it not? They have
taken all the share of the money for themselves.
Professor Colin-Thomé:
No.
Q114 Mr Davidson: I recognise that
the professor made a point about bonuses, but presumably bonuses
are recognised within this since this is from the Inland Revenue
statistics.
Mr Nicholson: What you have not
taken into account, of course, is that the salaried GPs had a
pay increase every year and that the nurses had a pay increase
every year.
Q115 Mr Davidson: May I ask the NAO
about that? It says here "the average salary for a GP employed
by a practice ... has only increased by 3% in the first two years".
I assume that includes any other salary increases being offered
because it is an absolute statement.
Ms Taylor: Yes, that is over the
two years of the contract.
Q116 Mr Davidson: That includes any
salary increases that were coming normally.
Ms Taylor: I think what you are
trying to say is that they were having year-on-year increases
and it has just continued.
Q117 Mr Davidson: Yes.
Ms Taylor: Which is true, but
we are just measuring it against the years since the contract
was implemented. In the years since it was implemented it was
a 3% increase.
Q118 Mr Davidson: So as a result
of these lorry loads of gold the GPs employed by the practices
did not get anything they were not going to get anyway. Is that
correct? We have just heard that basically 1.5% presumably was
the salary increase.
Mr Nicholson: It is true that
the GPs took a greater proportion of the income.
Q119 Mr Davidson: No, all of it;
they took virtually all of it, did they not?
Mr Nicholson: No, not virtually
all of it. No, they took a greater proportion of the income as
profit. That is true.
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