Doctors' leaders warn of patient-care cuts: A health minister says extra costs in NHS salaries must be met by 'efficiency gains'. Celia Hall reports

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Doctors' leaders warned yesterday of cuts in patient services because of the Government's insistence that rising National Health Service costs and elements of salary increases must be met by 'efficiency improvements'.

The British Medical Association also believes that the Department of Health is speeding up its intention of devolving the next round of pay arrangements to local hospital trusts.

The BMA has obtained a letter sent last week by Gerald Malone, the Minister for Health, to all Tory MPs providing 'factual information' which he says they may find helpful if approached by doctors, nurses and other NHS employees, over pay.

The letter reminds MPs that the BMA is campaigning against local pay determination and that nurses are also campaigning for their own pay claims for next April.

In the current year, 1994-95, he says that NHS purchasers are required to produce efficiency savings of 2.5 per cent to meet increases in hospital activity. Pay increases for doctors and nurses which came in six months ago were largely funded by additional money awarded to the NHS. But Mr Malone says that 'any excess' - those costs not met by improvements - must 'be met by additional efficiency gains', adding: 'The past performance of the NHS suggests that this is well within its grasp.'

The letter has fuelled BMA determination to fight the plans for local pay arrangements. James Johnson, chairman of the BMA consultants' committee, said yesterday: 'The whole thing is a complete nonsense. There seems to be an assumption that unlike everywhere else, the NHS is not affected by inflation. Costs rise in the NHS just the same.

'Every year we do more work for less funding. All that happens is that the system becomes more and more broke and hospitals go more and more into debt.

Savings have been made but we are now pared to the bone. To suggest that more activity is all due to efficiency is a pretence. The managers have to massage the system more and more. What happens is that we do lots and lots of cheaper operations and fewer big expensive ones. This looks good on the books, more patients have been treated and everyone goes away happy. This can only go on for so long. Patient care is suffering from so-called efficiency savings.'

Doctors' and nurses' pay has traditionally been arranged through review bodies that make national recommendations to the department which has normally acceded to them.

Mr Malone's letter says this year the department's evidence to the review bodies urged them not to recommend an across-the-board increase 'but instead to give a strong steer to the continued development and implementation of local pay arrangements by leaving employers with maximum scope for local action'.

A BMA spokesman said it believed this indicated that local pay arrangements would be brought in swiftly rather than using a gradual process with the larger percentage of pay awards continuing to be administered centrally. 'We think there has been a real shift in their plans,' he said.

The health department has told health service finance managers, in advance of next month's Budget, that for 1995- 96 there will be no cuts to their resources in real terms.