During the 2010 General Election, I campaigned to scrap unfair, ‘lifetime’ bonuses within NHS Tayside.  I welcome the widening of the campaign to end the bonus culture within the NHS.

The Merit and Distinction awards are only available to the highest paid NHS staff, consultants, as part of their standard contract.  Shockingly, these are not one-off bonuses, but are added to consultants’ salaries, year after year, until they retire.  The NHS even increases their pension contributions accordingly.

It is expected that between 1/3 and 1/2 consultants will receive one of these bonuses during their career, worth up to £70,000 per year on top of their normal salary.  No such bonuses are available to other vital NHS staff such and nurses, junior doctors, cleaners or porters.  This is completely unfair and unjustified.

I am therefore delighted that the campaign is gaining wider support and the pressure continues to be applied.

Tavish Scott MSP, leader of the Scottish Liberal Democrats, recently called for an end to consultant bonuses, saying:

“The [Scottish] Health Secretary is responsible for awarding £30 million of bonuses to the most highly paid personnel in the NHS – consultants.

“The payment of these bonuses is a totally devolved issue. There should be no payouts next year. People will find it an odd priority for the SNP to pay out £30 million in bonuses to those who are already the highest paid, while nurses are losing their jobs.”

Meanwhile, the issue is also creating waves in England, with a BBC investigation finding that a loophole means the bonuses continue to be paid, even when the consultants perform poorly:

Professor Alan Maynard, an expert in health policy at York University, was chairman of a local NHS trust for 12 years during which time he sat on the committee that handed out the awards. He said:

“They never get stopped, once they have them they have them for their lifetime. The system needs completely changing.

“The applicants provide very little information, but you can’t spend the money on anything else as it is earmarked for these awards. I would have preferred to spend it on providing more care.”

He said the evidence for performance-related pay was questionable anyway, but if there was to be an incentives scheme it should be much tougher.

Professor John Appleby, chief economist at the King’s Fund, agreed, saying:

“I think they are out of step with how the NHS should be paying staff. They should be abolished.”

In March, we began in investigation into a bonus culture within NHS Tayside. You can read our initial investigation into it by clicking here.

In the response received from NHS Tayside, we discovered that indeed there are bonuses paid to consultants that are not simply awarded in one year, but are permanent additions to their salaries.

It now appears that NHS bosses are also in on the act, getting similar bonuses added to their salary, contributing to their pensions and completely unrelated to ongoing performance.

Liberal Democrats investigation unearthed the matter which is reported in today’s Observer:

NHS boss earned £68,000 in bonuses – on top of six-figure salary

GPs, nurses and junior doctors are all denied access to any similar sort of compensation scheme.

Having received a reply from NHS Tayside over bonuses, these bonuses are written into the standard contracts offered to consultants across the whole of Scotland.

Bankers have been quite rightly been criticised for excessive bonuses along with Chief Executives of many companies who are earning 100 times more than their average employees. But I was shocked to discover such a bonus culture written in black and white into the contracts of NHS Tayside consultants. How can it be fair that the best paid staff in the NHS are the only ones able to get huge bonuses on top of their already very generous salaries? There does not seem to be any bonus system for staff such as nurses and porters.

In particular these ‘Distinction Awards’ are not one off bonuses, but added to consultants salary every single year and increase their pension contributions accordingly. 1 out of every 3 consultants will receive one of these awards during their career, so the system is hardly restricted to only the best and the brightest.

Even more worrying is that consultants can nominate each other or even themselves for these huge additions to their salary. It is not difficult to see such a system being quickly abused with friends nominating each other.

With money tight across the country, and frontline services in the NHS at serious risk, surely we should end the bonus culture in the NHS right now?

NHS Tayside should provide detailed information about bonuses paid to high earners in the NHS. My family are able to use the services provided by NHS Tayside but it is clear to me that budgets are under pressure. Concerns have been expressed to me by people in Angus about their local service provision.

It seems there is a breakdown in the relationship between GPs and the Angus Community Health Partnership over the consultation process on hospital provision in North Angus. Residents are concerned about the loss of GP beds at Brechin and Montrose infirmaries. Worries about future hospital provision are centred on budgets.

For example, in Montrose, the replacement for the maternity unit has been put on hold. Another worry centres on Arbroath: the date has still to be indicated for the new car park at Arbroath Infirmary, and given the budgetary pressures, there are concerns that this might be delayed.

There have quite rightly been complaints about the bonuses paid to bankers. However it is also increasingly evident that a bonus system exists for consultants in the NHS. I have written to Professor Tony Wells of NHS Tayside, asking him to provide the public in Angus with detailed information about the system. I have put the following questions to the Chief Executive:

1. What is the justification for the Merit Awards / Discretionary payments (i.e bonus system) in NHS Tayside?
2. Can doctors nominate themselves for awards?
3. Who judges whether or not someone gets an award?
4. At what level of job are these awards given? Is it only consultants and above?
5. How much is an award worth?
6. What is the difference between the merit and the discretionary award?
7. Are these one-off awards or are they a permanent addition to salary?
8. What effect does an award have on the recipient’s pension?
9. What is the hourly rate of pay for out-of-hours doctors?

With threats to NHS budgets due to the recession, it is vital that we ensure that salaries and bonuses within the NHS are fair and open at all pay levels, from nurses and administrators, through to consultants and surgeons.