What job planning means for Consultant finances

By Matthew Watson, Partner and Head of Healthcare

A job plan is usually approached as a clinical negotiation. It is also the document that decides how much of your week remains for private practice, what your NHS income looks like for the year ahead, and how much room you have to change either. The financial consequences follow directly from decisions made in that meeting, and they are rarely discussed there.

Your job plan sets the shape of your income, not just your week

Most Consultants arrive at a job planning meeting with a clear view of what they want clinically. Fewer arrive with an equally clear view of what the resulting document does to their finances over the following 12 months. The two are the same conversation. The number of programmed activities, the balance between direct clinical care and supporting professional activities, and the way those sessions fall across the week together determine both what you earn from the NHS and what capacity remains for anything else. The contract's typical allocation is 2.5 supporting professional activities within a 10 PA week, and the Academy of Medical Royal Colleges has advised that 1.5 is the minimum needed simply to keep up to date, before teaching, governance or service development are counted. How much of the week is genuinely spoken for is therefore rarely obvious from the headline number.

That last point carries the most financial weight and attracts the least attention. Private practice is not built on spare enthusiasm. It is built on predictable, protected blocks of time that a hospital, a secretary and a referring GP can all rely on. A job plan leaving 2 half days genuinely free at consistent points in the week supports a very different practice from one leaving the same number of hours scattered unpredictably across it. The totals look identical on paper and produce quite different results.

Career stage changes the calculation as well. A Consultant 3 years into a substantive post is usually building, and time is the scarce resource. A Consultant 20 years in may be optimising, where the question shifts from how much work is available to which work is worth doing. The same form, completed the same way, serves those two people badly.

Additional sessions are worth less than the headline figure suggests

Waiting list initiative work and additional programmed activities are usually presented as a straightforward proposition. More sessions, more income. For a Consultant earlier in their career that is often broadly true. For a Consultant already at a higher level of earnings it frequently is not, because additional NHS income does not arrive in isolation. It interacts with pension contributions and with thresholds elsewhere, and the effective value of an extra session can be a good deal lower than the gross rate implies.

The answer is not necessarily to turn the work down. Often it is exactly the right thing to take on, for reasons that have nothing to do with money. The point is narrower. The decision is better made with a clear view of what the work is genuinely worth to you rather than the figure on the offer, and that is a calculation worth doing before committing rather than discovering afterwards.

Reducing NHS commitments is a business decision as well as a clinical one

The reverse decision deserves the same scrutiny. Consultants who reduce programmed activities to create room for private practice are trading certain income for uncertain income, and the uncertain side carries costs the certain side does not. The 2003 Consultant contract has also long expected Consultants to offer the NHS first call on their spare capacity before taking on other paid clinical work, so for many the private practice question begins inside the job plan rather than alongside it.

Private practice has a fixed cost base that does not flex with volume. Secretarial support, indemnity cover, practice management software, room hire and billing arrangements cost broadly the same whether you are seeing 4 patients a month or 14. Below a certain level of activity those costs take a disproportionate share of what comes in. Consultants I work with often raise this after the event, having reduced their NHS sessions and found the private income needed to replace them was higher than expected once the running costs were counted properly.

None of that argues against the move. It argues for making it with a realistic view of the volume required to make the arithmetic work, which is a question that can be answered in advance rather than discovered over the first year.

For many Consultants, reducing sessions is also about thresholds

There is a further reason Consultants reduce their NHS sessions, and for many it is the deciding one. Above certain levels, additional income costs more than its face value. Once adjusted net income passes £100,000, the personal allowance is withdrawn at a rate of £1 for every £2 above that figure. The same £100,000 figure is also a cliff edge for working parents in England: if either parent's adjusted net income is expected to exceed it, the family loses its funded childcare hours altogether, one of the most valuable benefits available to those with young children. Higher up, where threshold income exceeds £200,000 and adjusted income exceeds £260,000, the annual allowance for pension saving begins to taper, which can bring an unexpected tax charge on NHS pension growth.

For a Consultant whose NHS salary already sits close to either level, every additional session pushes further into that territory. Reducing sessions and building private practice instead can change the picture, particularly where the private work is carried out through a company. Profits retained within a company are not personal income until they are drawn, so they do not count towards those personal thresholds in the year they are earned. That gives a Consultant a degree of control over the timing of their income that NHS salary simply does not offer.

It is not a one-way decision. Money retained in a company is taxed again when it is eventually extracted, a company brings its own costs and obligations, and the right answer depends heavily on individual circumstances, including career stage and when the income is likely to be needed. But this interaction between sessions, thresholds and structure is one of the main reasons the balance between NHS and private work is as much a financial decision as a clinical one, and it is far easier to model before a job plan is agreed than to unpick afterwards.

"A job plan is a financial document that happens to be negotiated on clinical terms."

The private side rarely gets the planning discipline the NHS side does

There is an asymmetry worth noticing. Consultants approach their NHS commitments with real rigour. Sessions are counted, reviewed annually, argued over and documented. The private side, by contrast, tends to grow by accretion. A few referrals become a regular list, a regular list becomes a meaningful share of income, and at no point does anyone sit down and ask whether the arrangement still suits the size it has reached.

That matters because the way a small private practice is best held is not always the way a substantial one is best held. The right structure at the point of starting out, when income is modest and predictability is low, is not automatically the right structure 5 years later when it is neither. Nothing forces a review, so in practice the review often does not happen until something else prompts it, such as an approach to retirement or a change in the NHS role. By then some of the options that would have been available earlier have narrowed.

Timing matters more than most Consultants expect

Job plans are reviewed annually. Financial arrangements tend to work on longer horizons, and some of them are difficult to reverse mid year. The practical consequence is that the useful moment to think about the financial side of a job plan is before the meeting, not after the document has been signed. Changes to an agreed job plan are not instant either, and once notice periods and any appeal are taken into account, a decision made at one review can take months to take full effect.

That does not require anything elaborate. It requires knowing, going in, roughly what each of the likely outcomes means for your income and your commitments, so that when a proposal is put to you across the table you can weigh it properly rather than agreeing in principle and working out the consequences later. Surgeons who model a few alternative job plans before the meeting, as many are advised to do, can take that a step further by putting an approximate income figure against each one. Most of the difficulty I see arises not from Consultants making poor decisions but from good decisions made without a full picture of what followed from them.

What this means in practice

A job plan is a clinical document and should be negotiated on clinical grounds. That is the right order of priority and nothing here is intended to change it. But the document you sign also sets your income for the year, shapes the capacity you have for private work, and interacts with arrangements that are easier to adjust before the fact than after. Treating it as purely a clinical matter leaves part of the decision unexamined.

The Consultants who handle this well are not those who approach job planning commercially. They are the ones who know, before they walk into the room, which outcomes they can comfortably accommodate and which ones would require something else to change.

If you are preparing for a job planning review and want to understand what the likely outcomes mean for your income and practice arrangements before you agree to them, the healthcare team at Ballards works with Consultants on exactly these questions. You can find more at ballardsllp.com/sectors/healthcare.

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This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.

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