Joint Committee on Statutory Instruments Fifteenth Report

Further Memorandum from the Privy Council Office


1 As requested by the Joint Committee on Statutory Instruments we submit further information relating to the increase in Annual Retention Fees for 2002. We also attach a further copy of our memorandum on this subject of 21 August 2001.

2 On 21 August the GMC submitted to the Clerk of the Privy Council a memorandum setting out the reasons for the fee increases.

3 This memorandum explained that GMC expenditure would grow from £36m in 2001 to £44m in 2002 because of the continuing growth in fitness to practise work. For example, in 2002 the Professional Conduct Committee will sit in five or six parallel panels throughout the year. This contrasts with two or three parallel panels towards the end of 2000. In addition the memorandum explained that it would be necessary to eliminate a forecast deficit for 2001, and generate a surplus in 2002 in order to restore reserves.

4 The increased Annual Retention Fee to £290 will produce a budgeted surplus of £7m in 2002 provided the number of doctors on the register does not decrease. However, we do not know the elasticity of demand and a 10% reduction in those paying ARF would cut GMC income by over £4m.

5 The number of complaints against doctors continues to rise. In addition we are embarking on a new revalidation programme which will require additional resources over the next few years. We therefore anticipate expenditure increases in future years.

6 We are continuing to pursue productivity improvements in order to reduce costs or mitigate expenditure increases, for example by moving work out of London. We therefore anticipate that any future increases in total expenditure will be at a much lower rate than the last few years.

7 There has been a depletion of reserves in each of the past four years. The Annual Retention Fee for 2002 was set at a level intended to create a surplus so that reserves could be restored. Once reserves have returned to a satisfactory level the fees will be set to cover expenditure each year. This is likely to mean that future fee increases will be at a much lower rate than recent years.

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