MPs reveal financial impact of GMS pay freeze

Freezing GP pay helped the DoH claw back 'overspends' worth hundreds of millions of pounds on the first three years of the new GMS contract by the end of March this year, a report by MPs shows.

NHS Pay Modernisation: New Contracts for GP Services in England, published yesterday by the Public Accounts Committee (PAC), estimates the overspend at £1.8 billion between 2003/4 and 2005/6.

It says: 'The DoH believes the cost of the contract is now under closer control and that by the end of 2008 it will have recovered any overspend.'

However, the report shows that NHS chief executive David Nicholson put the overspend at £400 million, rather than £1.8 billion.

It adds: 'There is evidence that the DoH reduced its estimation of performance under the framework when budgeting for the increased cost due to the MPIG.'

In evidence to the PAC in March, Mr Nicholson said: 'It's true that we did overspend the amount of money available to us but in the past two years we will have clawed the money back.'

The report blames the overspend on the extra costs of the quality framework (£332 million), after practice performance exceeded expectation, and the cost of allowing practices to opt out of 24-hour responsibility (£182 million).

The report calls for piloting of major change so cost can be more accurately predicted.

It also backs swapping MPIG for a 'redesigned global sum allocation to move the money into areas of greatest need'.

The quality framework should be better aligned with national health priorities and more outcomes-driven, it adds.

The report adds that in 2006/7 71 per cent of PCTs did not spend their allocation for local enhanced services.

- PCTs claw back up to £60,000 per practice, page 9.

GMS overspend

The Public Accounts Committee estimates £1.8bn overspend on the GMS contract between 2003/4 and 2005/6

Source: Public Accounts Committee.

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