Fairly early on in the history of the NHS it was recognised that the position of the government as effectively a monopoly employer made pay bargaining somewhat tricky, and potentially unfair. A similar problem was identified for other professions, such as Nurses and Teachers. In order to avoid any unseemly rows between gentlemen, the government instituted a system of independent pay review bodies. The idea was that, on an annual basis, the government and doctors would put to a panel of independent reviewers their views as to what doctors should be paid. It was expected that, more often than not, both sides would usually, as gentlemen do, suggest more or less identical pay levels. Only when a minor disagreement arose, say every decade or so, would the Review Body have to actually do any arbitrating. Whatever figure was agreed would be universally binding to all state hospitals.
The reality has been rather different. The Pay Review bodies for medical and dental practitioners have never received 'Joint' (i.e. concordant) evidence, and in some years have actually had to arbitrate more than once. The government, especially in recent years, has often overruled the arbitrated decision, or agreed to fund half of a recommended increase centrally, insisting that the rest of the pay increase be met locally by individual hospitals making savings from their service provision.
Needless to say, neither side are particularly happy with the way things have turned out. However, the profession seems even less thrilled at the direction the government seems to be taking now: Trust hospitals will soon acquire the right to ignore any centrally agreed pay scales, and will begin local pay bargaining. This is a move the government supports, and wants to take even further with pay settlements both nationally and locally having an element of performance related pay built into them.
In 2002-2003 the BMA and the DoH entered into negotiations to completely re-write both the GP contract, and the contract for NHS consultants. However, at a vote, 60% of the consultants rejected the best offer that their negotiators could come up with. At the time of writing the GP contract shape has been published (but failed to impress many) but final judgement and voting is pending because the NHS hasn't yet disclosed what they are willing to pay GPs if they accept it.