DOCTORS' AND DENTISTS' REMUNERATION (REVIEW BODY'S REPORT) (Hansard, 25 March 1963)

§ The Prime Minister

Yes. The Government accept the Review Body's advice, which is reproduced in full below. The Health Departments are ready to discuss immediately a number of details which need to be agreed with the professions before the new rates can be paid. These include the method of distributing the increase for general medical practitioners and the levels at which board 125W and lodging charges for hospital doctors are to be fixed.

Following is the text of Lord Kindersley's letter of 27th February to the Prime Minister:

11, Old Broad Street,

London, E.C.2.

27th February, 1963.

The Rt. Hon. Harold Macmillan, P.C., M.P.,

Admiralty House,

Whitehall,

London, S.W.1.

Dear Prime Minister, I write as Chairman of the Standing Review Body whom you appointed in the early months of last year, in pursuance of the recommendations of the Royal Commission on doctors' and dentists' remuneration, to advise you on the remuneration of doctors and dentists taking any part in the National Health Service. We have now completed our first review. This letter sets out our unanimous recommendations. We have held fourteen meetings beginning in May, 1962. We have obtained memoranda of evidence and submissions from the Health Departments and from an Evidence Committee constituted jointly by the British Medical Association and the Joint Consultants Committee and from the British Dental Association, and we have taken oral evidence also from these bodies. In addition we have received or obtained evidence from other sources also, and we desire to express our gratitude to those who have helped us in this respect by supplying information in confidence. The Royal Commission reported three years ago and all their recommendations (except one relating to the collection of information about professional earnings for the Review Body by the Board of Inland Revenue) were accepted by the Government and by the accredited representatives of the medical and dental professions. They included in their Report (Cmnd. 939) a proposed new system for determining doctors' and dentists' pay. They expressed this in the following terms:— 437. … We suggest that the Review Body should normally propose adjustments at relatively infrequent intervals and these adjustments would be expected to keep the position stable for some time. Thus, while in the period immediately before a review the remuneration of doctors and dentists may be lower than its 'proper' level at that time, the adjustments may well have the effect in the immediately succeeding period of putting remuneration slightly above that level. The frequency of the adjustments cannot be laid down in advance since it must depend on all the circumstances of the time. But the aim should be to keep remuneration stable for periods of at least three years if possible, and to do this by fixing levels of remuneration which, taken broadly over the whole period, will be reasonable and fair. It will be for the Review Body to make adjustments, not when remuneration ceases to be fair for the time being, but when it ceases to be 126W fair taken over the whole period since the last adjustment. 438. It follows from this that retrospective payments designed to relate increased remuneration more or less exactly to the dates on which it was deemed to be justifiable are undesirable in any future adjustments of medical and dental remuneration. If only because the Health Departments and the professions continue to favour this system recommended by the Royal Commission as recently as three years age, we have felt that it would be inappropriate on this occasion to adopt any other system, despite the difficulties inherent in a system that entails looking so far into the future; this is not to say that we necessarily regard ourselves as bound to accept the views expressed by the Royal Commission. In recommending particular rates of remuneration for doctors and dentists the Royal Commission said (ibid. paragraph 399): We hope that the new levels of remuneration will not be altered for three years at least, and we have had this in mind in making our specific recommendations. Provided, therefore, there are no pronounced alterations in current economic circumstances and trends, our recommendations apply as much to 1961 and 1962 as to 1960. The Royal Commission's rates were implemented with effect from 1st January, 1960. We recommend that, except where we have specified otherwise, the adjustments which we shall propose shall take effect from 1st April, 1963; and we have framed them with the intention that they should be likely to remain appropriate for a period, taken as a whole, of at least three years from that date. When incomes are continuously rising it is inherent in the system proposed by the Royal Commission that the level of pay of the doctors and dentists should be, at the beginning of the period of currency of new rates of remuneration, somewhat above what would otherwise have been generally regarded as the right figure at that time; and towards the end of the period, somewhat below the right then current figure. Our task has been, therefore, to lift the level from a point where it is currently lower than it should be up to a point where it is higher than it currently need be; but high enough only for any advantage in the earlier part of a three-year period from next April to be broadly matched by disadvantage in the later part. Our approach has been, first, to allow for the fact that the Royal Commission's own figures are now below the right current level, on their own assumptions concerning the appropriate trends; secondly, to judge how far those assumptions have diverged from actual trends during the currency of the Royal Commission's figures and to make appropriate adjustments on this account also; and, thirdly, to judge how far to anticipate continuation of past trends or emergence of any different trends during the three years from April, 1963. Thus, in effect, we have had under review the period from 1st January, 1960, to 31st March, 1966. In considering the trends in these various respects we have taken 127W note of certain factors which the Royal Commission, without fettering our discretion, said they would expect us always to find relevant: the cost of living, the movement of earnings in other professions and the quality and quantity of recruitment in all professions. We have interpreted broadly the information available about these factors, and have taken account of the national interest and, so far as we have considered it right to do so, of other factors also, including a wide range of data concerning incomes in other callings and employments. It is, we think, important to emphasise four differences between our problem and the more normal procedures for wage and salary settlements: first, we have had to consider trends over a longer period than is usual; secondly, these are trends relating both to a substantial period in the past and also to a substantial period in the future; thirdly, we have had to embody our conclusions in a single increase which is intended to stand for at least three years; and fourthly, we have had to try to determine the date at which the present level of remuneration ceased to be fair by the standards current at the time. We are satisfied that the rates of remuneration introduced at the beginning of 1960 do not allow fully for the changes that have subsequently taken place in economic arid other circumstances and were therefore overtaken much earlier in the period for which they were intended than the Royal Commission had expected; and additionally we have also to look forward over a period of at least three years ahead. Our conclusion is that art increase of 14 per cent. for this coming period would allow for both these factors; and this is the increase that we recommend. In doing so, we wish to make it abundantly clear that this is a recommendation which is not founded merely upon changes that have occurred or may be expected to occur over a period confined to three years Our recommendation reflects changes which we think were not fully measured in the period 1960–63 as well as those which may be expected to occur in the future. In effect, therefore, our recommendation concerns trends which will have occurred over a period much in excess of three years. As regards application, we recommend as follows:

General medical practitioners The average net income from all official sources of general medical practitioners aged under 70 providing unrestricted general medical services should be increased from £2,425 to £2,765.

Hospital doctors and dentists Existing salaries, salary scales and distinction awards should be increased by 14 per cent. as near as may be.

Medical administrators Existing salaries and salary scales should be increased by 14 per cent. as near as may be. Our attention has been drawn also to the following matters:

(a) Private practice income of general medical practitioners The calculation of the pool from which general medical practitioners are remunerated 128W excludes private practice income, in accordance with a recommendation of the Royal Commission. The Royal Commission also recommended (ibid. paragraph 331) that "no attempt be made in future to calculate and allow for annual fluctuations [in private practice income] unless there is reason to believe that the alteration has been substantial". The Health Departments have suggested that the amount of private practice income has for some years been considerably larger than the amount attributed to this head at the time when it was excluded from the pool calculations, and that the figure may be higher still today. But they do not contend that there is sufficiently firm information on the point to bring into operation the proviso in paragraph 331 of the Royal Commission's Report. We concur in their view.

(b) Dental anæsthetic fees Income derived from payments made by dentists to general medical practitioners in respect of anæsthetics given to National Health Service dental patients, for which fees are paid to the dentists from Exchequer funds, is excluded from total official income in computing the pool of general medical practitioners' remuneration. The total amount of money involved is estimated at some £250,000 a year. The Health Departments have suggested that is anomalous and that the payments should be treated in the same manner as other official income. While we agree that this is an anomaly we think it should be dealt with at a later stage On this occasion we have deliberately confined ourselves to consideration of the general level of remuneration.

(c) Home to hospital travelling expenses of part-time consultants and senior hospital medical and dental officers We agree with the Royal Commission that these payments are anomalous but we note that they are confined to those who were receiving them on 31st December, 1959, and that they will consequently die out gradually in any event. We see no reason at the moment to recommend any alteration in these arrangements.

(d) Number of distinction awards The Royal Commission recommended, in paragraph 232 of their Report, that for three years at least there should be a fixed number of distinction awards and thereafter it should be for the Review Body to suggest any alteration in the number of awards. We do not consider that it is necessary to change the number at this stage.

(e) Board and lodging charges Board and lodging charges are levied from resident medical staff at rates negotiated between the Health Departments and representatives of the profession. The Health Departments have argued that increases in pay ought to be accompanied by simultaneous increases in these charges to meet increases in the cost of providing board and lodging and also with the eventual aim of eliminating the element of subsidy for persons voluntarily 129W resident, but they have suggested that the actual amounts should be settled by negotiation. The Evidence Committee of the British Medical Association and Joint Consultants Committee also regard this as a matter for negotiation. We recommend that there should be some increase but that the amount of the increase should be settled by negotiation.

(f) Fees for Locums in Hospitals We recommend that the weekly rate of remuneration for locum appointments should be increased by 14 per cent. as near as may be. We recommend no change in the sessional rates.

General Dental Practitioners The problems posed by the remuneration of general dental practitioners are more complex than those relating to the remuneration of doctors and hospital dentists. We have received representations from the British Dental Association that the basis of remuneration of general dental practitioners is not satisfactory. The feature which the Association criticises is that fees for services performed under the General Dental Services are fixed so as to produce an average target income for all principals in general dental practice (other than wholly private practice). This, the Association argues, puts single-handed dental practitioners at a disadvantage; if their colleagues in other more remunerative forms of practice (for instance, practices in which assistants are employed) raise the average principal's income above the target, the system requires that the fee scale should be reduced in order to make incomes conform with the target; but if the fees are reduced, then the incomes of single-handed practitioners will be reduced even though their performance has been entirely consistent with the target. The British Dental Association has also drawn our attention to the possibility that the present system may, in another way, work to the detriment of older general dental practitioners, and indeed of practitioners generally. Dentistry is a profession in which earning power is greatest comparatively early in the career. There has been a tendency, which may continue for a time, for the average age of practitioners to fall, and consequently for the income of the average principal to rise. In so far as, under the present system, this necessitates a reduction in the fee scale in order to bring this average income back to the target, the older general dental practitioners may find their incomes reduced, for no other reason than that the average age of their colleagues in the profession is falling. Although the present system was in fact accepted by the British Dental Association, after the Royal Commission reported, we nevertheless understand the criticisms that the Association now advances. But we are not convinced that the remedy which the Association proposes of relating the target to the single-handed dental practitioners only would do more than substitute some different unsatisfactory features for some of the present ones, or that the results of the changes would be generally more satisfactory than the present 130W arrangements. For instance, there would no longer be any specific control over the incomes of general dental practitioners not working alone; and we do not see that the Association's proposed remedy would necessarily do anything to protect the older general dental practitioners from the effects of a fall in the average age of the profession. We intend, therefore, to give further thought to the basis of remuneration of general dental practitioners and to possible alternatives to the present system, so that if we can find a more satisfactory system we should be able to consider recommending it at a subsequent review. On this occasion we recommend that the present arrangement by which the target income relates to the average of all principals, full-time and part-time together, working wholly or partly in the General Dental Services, should be retained. We are aware that the current fee scale has not yet been in force long enough for the Dental Rates Study Group to be satisfied that it produces neither substantially more nor substantially less than the current target rate of income of £2,400 a year to which they have been working. We recommend that the Study Group should first satisfy itself on this point and then adjust the fee scale accordingly to a revised target rate of income of £2,740 a year (i.e. an increase of 14 per cent. upon the present target income) with effect from such time as the Study Group agrees upon the adjusted scale, not being earlier than 1st April, 1963.

General Dental Surgeons and General Dental Practitioners working in Hospitals We recommend that the salary scale for general dental surgeons working whole-time in hospitals should be £1,610×£80 (14)—£2,730, and that the sessional fee for general dental practitioners should be the same as that for general medical practitioners.

Health Centre Dentists The rates of pay of Health Centre dentists were revised in 1962 to bring them into line with the pay of local authority dentists, who were in many cases working alongside them on very similar work. In our view, it would be inappropriate to disturb this relationship so soon after it has been agreed, and we therefore recommend that, for the present, salary scales for Health Centre dentists should remain broadly in line with those of local authority dentists, subject to further consideration at a later review.

Other Elements of Remuneration It is our intention that unless otherwise specified the increase of 14 per cent. should apply generally to other elements of remuneration, whether fixed salary, salary scale or fees (including maximum remuneration therefrom) at rates recommended by the Royal Commission. or at rates negotiated by direct reference to their Report. We also recommend that the pay of doctors and dentists serving the Hospital and Specialist Services or in the General Practitioner Services whom we have not specifically mentioned should be increased by 14 per cent. or, where gross pay contains an element in respect of expenses, that the rates should be increased by such an amount as will produce an increase of 14 per cent. in net remuneration. 131W We assume that the representatives of the medical and dental professions will be informed of the terms of our recommendations in due course.

Yours sincerely,

KINDERSLEY.