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'GPs have to pay locum superannuation - but are free to negotiate the underlying rate'

Should practices yet to be reimbursed for locum superannuation costs try to cut rates? Accountant Luke Bennett advises GPs look at the wider picture

Firstly, there will be negotiations about rates. Obviously it depends on what the supply and demand ratio looks like in your area. Some locums charge mileage on top of their rate - maybe you can negotiate with them to perhaps reduce the mileage just to squeeze the cost a little bit there.

GPs don’t have a choice but to pay locum superannuation. If somebody is in the scheme, then they have to pay it. That is the law - however they are still free to negotiate what the underlying rate is.

I think practices are going to be looking more carefully at whether they can cover sessions using other partners rather than using external locums. Also, there are some semi-retired locums out there who are already drawing their pension and so are no longer in the pension scheme so they are going to be more in demand. Whether they will put their rates up to compensate, I don’t know, but certainly it is not everybody who is currently in the pension scheme.

Although those are the specifics I think that is probably just one element, one specific cost, and rather than think we didn’t get this income now we must reduce the cost, you need to look at the big picture. You have to stand back and look at the whole financial position. I wouldn’t get bogged down in just this specific area but stand back and look at what is happening across QOF income, enhanced services… all those things as this is just a small piece of a big picture. You may be able to squeeze this cost somewhere else because whether you are a PMS or a GMS practice, you have sums of money coming in and you have sums of money going out and you need to balance the whole lot.

This is certainly a question that is being asked frequently but as I say, it is more within the context of a whole host of costs affecting practices at the moment. Because of this, I would advise GPs to look at the whole picture for the coming year - and really, take a proper look and think do we need to reduce drawings now rather than leave it until too late and then you might end up having to put some money back?

The key advice we are giving at the moment is to have a sensible look forward so you don’t find yourself in an unsettled position in a year’s time.

Luke Bennett is an accountant at Francis Clark LLP and a specialist adviser to GP partnerships

Want more? Click here to read a previous advice piece on how to shoulder locum superannuation payments by accountant Bob Senior

 

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