NHS consultants propose 'peaceful solution' to pay dispute

NHS consultants will present ministers with a fresh proposal today to end the dispute over pay that is threatening to derail the Government's health service reforms.

In a marked change of tone, leaders of the British Medical Association, who are due to meet Alan Milburn, the Secretary of State for Health, will say a peaceful solution is achievable if extra cash promised to consultants next year is put into their merit award scheme.

Boosting merit awards was one of three options proposed by the Government last month to resolve the dispute. The BMA will say that giving consultants extra increments on their salary at the discretion of NHS trust managers is the best way of meeting ministers' demands to reward those who do most for the NHS.

The meeting is the first between the two sides since consultants in England rejected by two to one a proposed new contract last October. Mr Milburn was furious at the loss of the contract after two years' negotiation and threatened to impose it if consultants did not co-operate. Consultants rejected the contract, which would have given them an average 15 per cent increase in earnings over their careers, because of anger at what they described as a "target-driven culture".

The contract was designed to allow more evening and weekend work and was seen as critical to achieving the Government's pledge to cut NHS waiting times to a maximum of six months by 2004. To resolve the impasse, Mr Milburn announced last month that he would make the sum set aside to fund the new contract – £133m in England in 2003-04 – available to NHS trusts to agree local deals with their own consultants from 1 April.

Trusts were given three options: to implement the contract; to introduce annual incentives based on performance; or to boost the merit award system by increasing the value of the discretionary points on the salary scale.

The BMA says the first two options are unworkable but is backing the third. Paul Miller, the chairman of the BMA consultants' committee, said he would ask Mr Milburn to encourage NHS trusts to back the third option.

A spokesman for the Health Department said the trusts could decide which option, or combination of options, to implement. "Rewarding those consultants who do most for the NHS is the priority, " he said.

But the NHS Confederation said trusts would not want to be told to take option three. "Given the work it has put into the annual incentives [option two], I would be surprised if it ditched them," a spokesman said.

Half of consultants now receive discretionary points, worth £2,700 each on salary. Consultants can earn up to a maximum of eight awarded at the discretion of their NHS trust. The £133m divided among all consultants would be worth almost £6,000 a head, or twice that if it were to go to the half of consultants who now receive merit awards.