General Practioner Earnings (Hansard, 7 November 1991)

§ Mr. Waldegrave

[pursuant to the reply, 5 November c. 101]: In 1990–91, the first year of the new contract, estimated gross payments to general practitioners averaged some £5,951 per GP in excess of the intended level. We shall not know how much of this sum falls to be recovered under the normal balancing arrangements for dealing with over and underpayments until autumn 1992, when we have full information on GPs' practice expenses in 1990–91. I can well understand the profession's concern at the prospect of an overpayment of this order hanging over successive pay rounds. Nor would I want difficulties with the workings of the remuneration system to obscure the undoubted achievements of the new GP contract and the benefits that it is bringing to patients. So I believe it right to begin to address the issues now.

As a first step, I have considered carefully the different elements of the 1990–91 overpayment. The General Medical Services Committee has drawn attention to two factors—both concerning the handling of target payments in this first year of the contract—which they have suggested merit special treatment.

First, it is now clear that the Government's decision to bring higher target payments within average net income for nine months, as part of the staging of the award, interacted with the Doctors' and Dentists' Review Body's underestimate of the number of GPs who would achieve higher targets, to add a sum of £1,800 per GP to the overpayment. A separate decision to pay a "fifth target payment" to help maintain cash flow to individual GPs while the target payments system was being introduced added a further £300 to this. I have concluded that it would not be right for the Government to recover either of these sums. They result from special factors, unique to 1990–91, and can and should be excluded from the sum to be recovered, without prejudice to the normal principles of the balancing mechanism. So I have decided now to waive £2,100 of the 1990–91 overpayment as the profession has asked. This is equivalent to a sum of £63 million for Great Britain.

We shall need to return to the handling of the outstanding sum in the autumn of 1992, when we have further information. But in the meantime there are other issues for Government and the profession to address together. The latest information suggests that the fee scale set for 1991–92 is continuing to deliver a higher level of 260W income than intended, although on a lesser scale than in 1990–91. Neither Government nor profession wishes to see the overpayment accumulate further, and we must therefore work together on evidence for the Doctors' and Dentists' Review Body to help them ensure that arrangements are brought properly into balance in 1992–93, when they determine the new level of income for that year.

We shall also need to take account of the experience of the first two years of the contract as we work together to develop it further. In looking to the future I shall wish to explore particularly the scope for developing the contract and remuneration system in ways that are more sensitive to local needs and circumstances. I also have in mind the further development of the performance-related elements of the contract, in the light of the Government's policy set out in the citizens charter. The profession may want to add other issues arising from their wide-ranging consultation on their document, "Building Your Own Future".

I therefore propose to invite the GMSC to work with Department of Health officials to agree proposals in time to put evidence to the DDRB for the 1992 pay round—when recovery of the 1990–91 overpayment falls due and all the necessary information will be available—covering:

(a) the handling of the overpayments already incurred—including the possibilities of accelerated repayment of the remaining amounts and of waiving an additional sum as part of a wider package; and
(b) the best way of developing incentive fee scales within the remuneration system, in pursuit of the policy objectives I have outlined.

I believe this represents a substantive response to the profession's understandable concerns. We have addressed those elements of the 1990–91 overpayment which clearly merit exceptional treatment and where we have enough evidence to act now. We have also set the framework for constructive discussion on the handling of the remaining pay issues in support of the GP contract through the 1992–93 pay round and beyond. I look to the profession for a similarly constructive response.