Joint Committee on Statutory Instruments Fifteenth Report


Memorandum from the Privy Council Office


1 The GMC is an independent statutory body, established under successive Medical Acts, the most recent being the Medical Act 1983.

2 In May 1999, Council agreed the first increase in registration fees since May 1991. Council noted that, during the intervening period, the GMC's annual operating expenditure had risen by 136%.The prime cause of that increase in expenditure had been the rapid increase in complaints against doctors and, consequently, a growing caseload under the fitness to practise procedures that deal with concerns about doctors' conduct, health or performance. For example, the number of days of session of the Professional Conduct Committee had risen by 140%.

3 Despite that rise in the workload, we had managed to contain our costs, but had now begun to operate at a deficit.

4 In setting the new fee levels from 1 January 2000, we took the opportunity to simplify the fee structure, so that a fee of £130 was fixed for all initial applications for registration, renewals, extensions and restorations of registration. As a result most doctors paid more from 1 January 2000, but some paid less than previously - for example for renewal of limited registration which had in some cases cost £350.

5 That increase in the average fees, from 1 January 2000, was intended to restore the budget to a small surplus. However, the fitness to practise workload continued to increase. For example, the number of cases entering our performance procedures rose by some 600% between 1999 and 2000. The rise in conduct casework was such that, by the end of 2000, we were obliged to plan for two or three panels of the Professional Conduct Committee meeting in parallel almost every week (compared to one panel meeting for 20 weeks in 1977).

6 Given that the budget was heading for a deficit again in 2000, the Council decided to increase the annual retention fee from £130 to £175, with effect from 1 January 2001. The budget deficit for 2000 was approximately £1.8M.

7 Despite the increase from January 2001 and economies of around £2M per annum, we now have a budgeted deficit for 2001, the fourth successive year. That deficit for 2001 is expected to be around £4.6M.

8 The projected balance on our reserves, as at 31 December 2001, is £14.6M. If there were to be no further expenditure growth in 2002, we would have to increase the registration fee of £175 to £215 from 2002 onwards, to return the budget to break-even and to restore reserves to their agreed level of £15M.

9 However, expenditure will inevitably increase further in 2002. The growth in fitness to practise work is inexorable. For example, from 1 January 2002, we are having to plan to operate six panels of the Professional Conduct Committee in parallel. Annex A illustrates the growth in expenditure on our various activities since 1999, with projections for the current year and 2002.

10 At this stage our best estimate of expenditure in 2002 is about £44M, compared with our current forecast expenditure of £36M for 2001. To generate the necessary break-even income, the registration fee of £175 would have to rise to £245. However, this would not provide any contingency for growth beyond that so far forecast. It would also not allow for further investment in improving standards to meet the expectations of the public and doctors.

11 Council, on the advice of our Finance and Establishment Committee, concluded that all the fees for registration, with the exception of provisional registration, should be £290 from 1 January 2002. This represents an increase of about 71% on 2001. The increase should yield an income of about £52M.

12 The Council recognises the disquiet that may be caused by this further, substantial, rise in the fees. We will continue actively to seek economies and improvements in efficiency. However, realistically, such economies and improvements cannot offset the continuing huge increase in the fitness to practise workload or the new costs arising from the work to introduce revalidation procedures for all doctors.

13 The GMC has been granted charitable status and this will yield about £1M in annual savings on tax, VAT and rates. This will be taken fully into account in future financial planning.

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