The NHS bonus culture exposed

Distinction awards were introduced to honour consultants for “outstanding professional work”.

On top of their salary, which for the new consultant contracts is between £73,403 and £98,962 a year, the recipients fall into one of three categories: a “B” award, which guarantees an annual top-up of £31,486; an “A” award, worth £55,098 a year; or an “A+” £74,768 pay bump for high achievers.

The cost to the taxpayer is substantial: in 2004, it cost £20.8m to run the scheme. By 2011, the price will come in at more than £30m.

In 2008 there were 11 new “A+” awards, 32 “A”s and 66 “B”s. Added to the existing total, this means that, as of September last year, the public was paying for the awards of 552 consultants.

Every application is considered by the Scottish Advisory Committee on Distinction Awards (SACDA), a body set up in 1998 by former Labour Minister Sam Galbraith. No similar scheme exists for nurses or GPs.

Consultants can be nominated by others or nominate themselves for consideration for an award by the committee.

A Sunday Herald investigation has now established that the scheme has disproportionately benefited white males over female and ethnic minority consultants, and allowed doctors to receive a pay and pensions boost as they edge towards retirement.

SACDA figures show that while 28% of consultants are women, only 12.9% of all distinction awards have been given to females.

In the 2008 round, while 19.7% of “B”s were handed to females, only 9.1% of “A+” awards were given to women. Of the 109 distinctions, 85.3% went to men -- a proportion that far exceeds their already dominant foothold in the profession.

The last 10 SACDA annual reports show that ethnic minorities are not benefiting from a system that largely relies on colleagues nominating consultants for an award.

Of the 209 consultants who hold “A+” or “A” awards, only two declared themselves as not white, despite ethnic minorities filling 8% of posts.

Dr Ian McKee, an SNP MSP and critic of the set-up, said: “The scheme resembles an old boy’s network, as it is a system that favours middle-aged, white male doctors. There is far too much money going into it.

“It also favours the more conventional specialities like respiratory care, which is deemed to be a more respectable branch than geriatrics or psychiatry. To assume from the figure that we have a lot of second-rate geriatricians, compared to other specialities, is a big insult to them.”

The SACDA annual reports reveal that some consultants have retired within a relatively short period of receiving their awards, a practice that can result in their final-salary pension pot being vastly increased. This is because when a consultant retires, although he no longer formally holds an award, the financial benefit is still reflected in his taxpayer-funded pension.

In 1999, up to six of the eight consultants who received distinctions had retired within seven years, while three had dropped off the list of consultants receiving the award within four years.

Professor Charles Gillis, a public health specialist who was based in the west of Scotland, received an A+ in 2000, but retired the following year.Professor Jeanne Bell, a histopathology expert employed by NHS Lothian, received the elite award in 2005 before retiring in December 2007.

Professor Gavin Kenny, who was 56 when he received his “A+” in 2004, dropped off the awards list three years later.

Last year, 50% of all retiring consultants held a distinction award. The associated pension costs are not included in the £30m awards pot.

Consultants can also “trade up” their awards by applying for an “A+” a few years after receiving a “A”.

McKee said: “One must wonder why, after working for decades in the NHS, some consultants are suddenly deemed to be doing exceptional work. Such a practice can boost a pension pot by tens of thousands of pounds.”

Theresa Fyffe, director of the Royal College of Nursing in Scotland, said of the system: “Just one-tenth of this year’s budget for distinction awards would allow all of the current vacancies for community nurses across Scotland to be filled. It is time that the money spent on awards for consultants is invested in front-line services and I hope that the cabinet secretary will seriously consider this.”

The scheme’s governance arrangements have led to accusations of professional cosiness. Of the 12 members of SACDA, the committee that oversees the scheme, eight have received distinction awards, while all of last year’s 17 advisers to the committee have also been given one of the three salary top-ups. It is believed that all received the awards before joining the committee or advising it.

One of the ex-officio members of SACDA is chief medical officer Harry Burns, who was granted an “A+” award at the same time he served

on the committee. He left the committee meeting before his award was discussed.

Labour MSP Tom McCabe, who was deputy health minister from 2003 to 2004, says he recalls a reluctance from the civil service to reform the system. “The distinction awards is an issue that is largely invisible to the public, but one that would be difficult for many people to understand.

‘‘All attempts to put more transparency into the scheme were not welcomed. I was told to leave it alone.”

Malcolm Chisholm, another former Labour health minister, says that while changing the system was not a priority for him, he understands the case for reform. “Especially now that money is tighter, I am sure people will be casting an eye on it,” he said.

Andy Kerr, Labour’s last health minister in Scotland, set up a review of the system, but it took more than two years to issue its findings to the MSP’s successor, Nicola Sturgeon.

Kerr’s review group was chaired by Burns and included former BMA Scotland chairman Dr Peter Terry, who has received a distinction award.

The group’s “framework” report, of which the Sunday Herald has a copy, makes a case for tweaking the status quo and widening access to the £30m pot of public money.

It said the scheme should be rebadged as the Scottish Clinical Leadership and Excellence Awards, and recommended that all applications should be by self-nomination.

The report noted that consultants should still be able to receive up to £74,255 a year: “There should not be any reduction in funding as a result of the review and no detriment to ­existing award holders.”

McKee, who has called on the First Minister to reform the scheme, said of the review: “There’s bugger all ­difference. It’s purely cosmetic.”

Jeremy Purvis, the Scottish Liberal Democrat finance spokesman, said: “We are looking very closely at this scheme. It is certainly a candidate when it comes to freeing up resources without damaging front-line services. For there to be a 10% increase in its budget is extraordinary.”

Dr Lewis Morrison, deputy chairman of BMA Scotland’s Consultant Committee, said: “The BMA recognised that the distinction award system needed to be reviewed and we provided the government with our views on how the system should be reformed to make it fair and transparent. Distinction awards are essential as a means by which to promote and reward excellence in the NHS, and similar schemes operate in England, Wales and Northern Ireland.”

A Scottish government spokesperson said: “Distinction awards have been part of the remuneration package available to all consultants working in the NHS since its foundation. The review has recommended changes to the system which will remove the patronage of Royal Colleges in deciding who is nominated for awards. All consultants, regardless of gender, ethnicity or speciality, are evaluated for an award in an equitable and transparent process.”