Background briefing on the Review Body and doctors’ pay
March 2004
Doctors’ pay and the importance of independent review
The BMA attaches great importance to the central determination and uniform nature of medical remuneration in the National Health Service. It is consistent with the principles of the NHS for doctors to be distributed evenly both geographically and by specialty.
Any significant move towards local pay determination would undoubtedly undermine this important benefit to patient care. Nevertheless, in retaining central pay determination some element of independent assessment of pay levels and differentials must be present. In its absence, doctors’ pay would be vulnerable to Government economic policy, particularly since any consequent conflict could not be resolved other than at the expense of doctors’ obligations to their patients.
Both these points were made by the Royal Commission on Doctors’ and Dentists’ Remuneration which reported in 1960.
Since 1963 this independence has been provided by the Review Body on Doctors’ and Dentists’ Remuneration (DDRB). This body was set up on the recommendations of the Royal Commission which was insistent that its recommendations should be rejected ‘only rarely and for the most obviously compelling reasons’.
Until a few years ago, the terms of reference of the Review Body were expressed in very general terms, namely:
‘...to advise the Prime Minister on the remuneration of doctors and dentists taking any part in the National Health Service’.
However, successive review bodies have agreed that they should have regard to a number of considerations. These include affordability; the state of the economy - in particular price inflation; recruitment and retention; the nature and volume of workload; morale and motivation; job security; and findings from studies of pay comparability, pensions and other benefits.
In August 1998, the Minister for Health wrote to the Review Body and to the BMA proposing revised terms of reference. After considerable discussion agreement was reached on new terms of reference under which the Review Body was content to work.
These reaffirm the Review Body’s independence. This year the terms of reference have again been revised to include regional/local variations in labour markets and their effects on the recruitment and retention of doctors and dentists as a consideration, which the Review Body should take account of in reaching its recommendations.
Additionally, the government has proposed that the Review Body should take account of the principle of equal pay for work of equal value in the NHS when reaching its recommendations in relation to doctors and dentists directly employed by the NHS. Discussions are continuing on the detail of these actual and proposed changes to the Review Body's remit but the present terms are set out in full below.
The evidence that the BMA submits to it reflects the new terms of reference. We would expect that the government will no longer feel it necessary to reject or stage Review Body recommendations now that its preferred terms of reference have for the most part been agreed.
Terms of reference of the Review Body on Doctors' and Dentists' Remuneration
The Review Body on Doctors' and Dentists' Remuneration is independent. Its role is to make recommendations to the Prime Minister, the Secretary of State for Health, the Secretary of State for Scotland and the Secretary of State for Wales on the remuneration of doctors and dentists taking any part in the National Health Service.
In reaching its recommendations, the Review Body is to have regard to the following considerations:
- the need to recruit, retain and motivate doctors and dentists
- the Health Departments' output targets for the delivery of services, as set out by the Government
- the funds available to the health departments as set out on the Government's Departmental Expenditure Limits
- the Government's inflation target
- regional/local variations in labour markets and their effects on the recruitment and retention of doctors and dentists.
The Review Body may also be asked to consider specific issues.
The Review Body is also required to take careful account of the economic and other evidence submitted by the Government, staff and professional representatives and others.
Reports and recommendations should be submitted jointly to the Secretary of State for Health the Secretary of State for Scotland, the Secretary of State for Wales and the Prime Minister.
Membership
The present members of the Review Body are:
Michael Blair QC (Chairman)
Professor John Beath
Professor Frank Burchill
Dr Margaret Collingwood
Mr Hugh Donaldson
Professor Alistair Dow
Dr Gareth Jones
Interests of the public purse
The advantages of centrally determined pay levels set in the light of impartial judgement are not one-sided. Although the real earnings of the profession have been largely maintained, these earnings have fallen substantially behind those of higher earners elsewhere in the workforce.
Since 1980, the recommendations of the Review Body have been implemented in full by he government on only 9 occasions (1987, 1988, 1992, 1994, 1995, 2000, 2001, 2002 and 2003).
Both the new general practitioner and consultant contracts incorporate three-year uplifts to pay levels although in the case of the former, these are subsumed in more general allocations of resources to primary care. Accordingly, the review body will not be making recommendations for consultants on the new contract or self-employed general practitioners on this occasion. There will be recommendations on the incomes of consultants remaining on the old contract, salaried general practitioners and the remaining remit groups.