Doctor, doctor: How can you justify a 10% pay increase?

GPs' income soars to £110,000 despite promises of more money for patients

It's not what you expect from members of a "caring profession". Medicine is supposed to be a vocation and doctors are renowned for putting the interests of their patients first. Yet family doctors have boosted their earnings by awarding themselves a larger slice of the NHS cake – at the expense of their patients.

Official figures published yesterday show GPs' pay soared to an average of £110,000 a year in 2005-06, a rise of almost 10 per cent on the previous year and 35 per cent in the two years since their new contract was introduced in 2004.

British GPs are now among the highest earning family doctors in the world. They have enjoyed a bonanza at a time when the NHS was struggling to balance its books by closing wards and cutting services. A poll last week found they were the happiest in Europe with their pay which has increased from £100,170 in 2004-05 and £81,556 in 2003-04.

Part of that rise, it turns out, has come because they have chosen to pay themselves more. GPs are self-employed and are paid a gross sum (£245,020 in 2005-06) out of which they are expected to hire staff and buy equipment to run their practices. What is left is their "profit" or income for the year.

Not content with six-figure incomes, the report from the NHS Information Centre published yesterday reveals that, during 2005-06, they spent less on their practices and kept a larger profit for themselves – for the second year running. Over the two years, the extra they have pocketed amounts to £10,000 per doctor

Last January, Patricia Hewitt, former health secretary, accused GPs of helping themselves to more than they were entitled to after it emerged that the amount they pocketed increased from 40.5 per cent of the gross amount they were paid to run their practices in 2003-04 to 43.5 per cent in 2004-05, equivalent to £6,900 per doctor.

She said: "I think if we had anticipated this business of GPs taking a higher share of income in profits we would have wanted to do something to try to ensure that the ratio of profits to total income stayed the same and therefore more money was invested in even better services for patients."

Yesterday's figures show the imbalance deepened in 2005-06, with an increase to 44.9 per cent in the proportion of gross income that GPs paid themselves. That adds up to an extra £3,430 per doctor, or £10,330 over the two years. The Department of Health declined to comment on the new figure.

You might expect bankers to increase their profit margins but it is hard to understand how it could happen with doctors. It suggests that the sums injected into general practice, and the rest of the NHS, over the past five years – £45bn extra in total – have been so huge that they have been beyond the capacity of the average doctor to spend, and so have ended up in their pockets by default.

What could the average four-doctor practice do with an extra £40,000 a year? I have a suggestion. Hire a couple more receptionists to answer the phones.

Last year, the British Medical Association defended the extra that had found its way into GPs' bank accounts in 2004-05 on the grounds that it would take time for doctors to invest their NHS windfall. But, it turns out, they did not do so in 2005-06 either. Now the BMA is claiming, in a statement issued yesterday, that the figures are out of date and the average GP has suffered a cut in income since 2006.

Have patients benefited from the largesse handed out to doctors practices? The answer is: up to a point. The chief reason for GPs' large pay rise since 2004 is that their new contract set a number of targets, with payments attached, designed to incentivise specific areas of care, such as treating blood pressure and helping smokers give up.

NHS Employers which negotiated the contract, underestimated the number of targets GPs would hit – they did far better than expected and earned much more than intended. Ministers who had agreed and signed the deal then castigated GPs for doing what they were asked. The BMA complained, with justification, that GPs were pilloried for achieving the goals they had been set.

But that is not the whole story. GPs' pay has soared at a time when GPs become harder to see. They have dispensed with their out-of-hours responsibilities, they are holding fewer (though longer) consultations and more are working part time, as a study of their workload published by the NHS Information Centre revealed last summer.

Many patients complain that they have difficulty getting through to the surgery and making appointments.

Ministers got us into this mess and ministers must now get us out of it. Gordon Brown pledged on the eve of becoming Prime Minister last June to improve access to GPs. Alan Johnson, the Health Secretary, has demanded more flexibility with opening times and more Saturday surgeries and threatened to make GPs' lives a little less secure by bringing in competition from private companies.

In short, the Government wants a bigger bang for the extra bucks it has invested in general practice – and so do patients.