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GP profits crash as PCTs put the squeeze on budgets

GPs are facing a financial backlash from PCTs that is exacerbating the effect of the two-year pay freeze and sending profits crashing, Pulse can reveal.

Profits have slumped by a projected 20% on average and as much as 42% in the most hard-up practices, as the financial climate has proven even tougher than expected.

Accountants have told Pulse trusts are using strong-arm tactics to claw back cash they claim they have overpaid, with some recalculating practice MPIGs.

They are also systematically unpicking PMS budgets over issues such as rent and rates and minor surgery.

In many cases, newly merged trusts are demanding funds from surgeries stretching back over thee years, as they attempt to deal with financial mismanagement prior to the last PCT overhaul.

The result is a devastating impact on profits. Partners with gross earnings of £100,000 or less will see their profits slashed almost in half between 2006/7 and 2007/8.

All GP partners stand to lose more than 10% of their profits over the period.

Accountancy firm Sandison Easson had earlier in the year predicted GP profits would slump by an average of 13% over the period, but it now projects the fall at 20%.

Rosemary Smith, GP liaison manager at Sandison Easson, said: 'If you are skint, you check your bills, and that's exactly what PCTs are doing with GPs.'They are clawing money back left, right and centre, going right back to 2004.'

Miss Smith urged GPs to fight the PCT raiding, adding: 'When you talk about genuine financial errors, I have some sympathy with PCTs wanting to get their house in order ­ but not when they are moving the goalposts on contracts.' Another leading firm was privately even more pessimistic, calculating this year's drop in profits could be as steep as 10%.

And Paul Samrah, a partner at accountant Kingston Smith in Redhill, Surrey, warned surgery profits might fall further than 6.5%.

The situation is already having a major impact on GP recruitment, with practices taking on salaried GPs or locums rather than partners.

Several LMCs were having emergency meetings to discuss the PCT tactics this week.

David Stout, director of the NHS Confederation Primary Care Trust Network, said: 'It is legitimate for PCTs to renegotiate terms for PMS and local enhanced services elements of GMS where they feel they can improve value for money. But we would expect PCTs to give proper contractual notice.'

PCT strong-arm tactics have caused some practices to lose 40% of their income PCT strong-arm tactics have caused some practices to lose 40% of their income

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