Hansard

I will concentrate on the proposal by the Health and Sport Committee, of which I am a member, that spending on hospital consultants' distinction awards should not increase by £2 million as planned but should be capped at £28 million, which is itself a fairly massive expenditure. The recommendation is on page 22 of the Finance Committee's report. This is perhaps the first time that a subject committee has recommended a decrease in the budget that covers its remit.

When Jon Ford of the British Medical Association gave evidence to the Health and Sport Committee, he described how the distinction award system came about. He said:

"When the NHS came into being, those who were charged with paying consultants had to address the fact that, at that time, the very top consultants earned huge amounts of money in private practice. When they were subsequently translated into the NHS, a question arose as to how to replicate the range of professional incomes and give a small number of doctors very high levels of reward when there was no market to determine who should get them. The distinction award system therefore had clinical excellence as its main criterion. A few consultants were permitted to earn large sums in the NHS and they were peer reviewed as to clinical excellence."—[Official Report, Health and Sport Committee, 7 October 2009; c 2280-1.]

The then Minister of Health, Aneurin Bevan, more prosaically described the exercise as stuffing the consultants' mouths with gold to attract their support for the fledgling state service.

However, things change. The consultants who retire today were scarcely infants when the scheme was introduced more than 60 years ago. The BMA says—rightly—that today's awards are bestowed for virtues such as leadership and service contribution, as well as clinical excellence, and that the selection methods have been refined and made fairer. However, other things have also changed. In particular, other groups of health workers—especially nurses—exhibit leadership and clinical excellence and make an enormous service contribution. Is it fair that their contribution goes financially unrewarded? Do we still need to stuff consultants' mouths with gold?

Something else has changed, too. Back in the 1940s, only the very top consultants' pay was augmented by a distinction award. Today, even though the proportion of all consultants who receive an award is quite small, 50 per cent of all consultants who are retiring receive one. That is because awards are usually given in the last few years of working life. As a consultant's pension is based on final salary, the benefit of an award goes on for the rest of his or her life, although the original award money is recycled on retirement for the next consultant coming along. That means that the overall cost to the taxpayer is much more than the £28 million or £30 million indicated in the draft budget, but by how much no one is able to say.

Some argue that a scheme that distributes £28 million to about 500 health workers, all of whom earn around six-figure salaries or more, is offensive and unfair; I tend to agree. Indeed, Dr Linda de Caestecker, director of public health for NHS Greater Glasgow and Clyde, has gone further and suggested that all high earners in public service should accept a pay cut of 5 per cent, a proposal that has my support and which I would willingly accept for myself as an MSP provided that it was part of a general settlement and not a meaningless, individual gesture. It would help to preserve front-line services.

Apologists for the continuation of distinction awards say that they are necessary to prevent a mass emigration of top talent, but it is unrealistic to suppose that many 50-something consultants would up sticks and leave the country in which they have so many roots, or indeed that many better-paid jobs would be available to people of that age in other countries. I do not suggest, however, that the scheme should be scrapped immediately. Academic general practitioners, for example, come under it and the difference between an ordinary GP's pay and that of a university lecturer is so great that it would be impossible to attract talented GPs into university departments without some sort of subsidy. There may be other similar situations in which an award is justified. It is possible that other health workers should come under the aegis of the scheme.

Of more importance is the relationship between the scheme in Scotland and what happens south of the border. If hospital consultants in England continue to be eligible for pay enhancements that can add more than £75,000 to their basic salaries, and those in Scotland do not, it is easy to see that young consultants might seek their first jobs in England, knowing that there they have at least a chance of receiving such largesse later in their professional lives.

I support the Health and Sport Committee's recommendation to cap the money going into the scheme.