GP partners will struggle to increase take-home pay by 1%, predict accountants
Exclusive The national shortage of GPs will lead to flatlining take-home pay for many GP partners from April, accountants have warned.
Their gloomy forecasts come despite the GPC's expectation that the 3.3% (£238.7m) overall uplift to funding, and 5.9% increase to global sum (to an average £85.35 per patient), will deliver a pay increase come April.
The overall uplift is 0.1 percentage point larger than last year, when GPs saw a 3.2% additional investment into the contract, while the global sum is to rise by the exact same proportion as last year.
But accountants warned that despite the new contract including welcome pots of funding to pay for things like CQC fees and indemnity inflation, the GP recruitment crisis will mean that for many clients this will be eaten up by cuts to funding elsewhere, as well as increased locum costs.
Michael Ogilvie, healthcare lead at OBC accountants, said: 'I can find very little positive for doctors in the proposed contract. Yes there is a 1.4% allowance for extra costs – they will need this and more for their cost increases.
'Most practices are finding it hard to exist without paying for locums, and the increased cost of locums alone in some practices will eat up this extra allowance.'
For practices where 'locums are not a big problem', he added that he 'can only see these changes being worth at best that they will not be any worse off financially compared to the previous year'.
Luke Bennett, a partner at Francis Clark LLP and a committee member of the Association of Independent Specialist Medical Accountants (AISMA), said: 'The biggest factor affecting my practices at the moment is whether they have access to sufficient doctors to meet demand.
'Practices with sufficient sessions covered by partners or salaried GPs should see a modest increase. However those who are reliant on locums, who themselves are in short supply in some areas, will continue to struggle.
He added that although 'the improved increase in payments for locum reimbursement for sick leave is to be welcomed' it 'doesn’t cover the whole cost, not does it address the issue where locums are unavailable'.
Although Mr Bennett concluded that the contract was 'overall a modest improvement', he said it 'doesn't address the fundamental issue that there are insufficient doctors available to meet the ever increasing demand'.
He said: 'At best I estimate partners might see an increase of 2% in profits, but for those suffering MPIG or PMS premium clawbacks it will be less than this.'
Bob Senior, chairman of the Association of Independent Specialist Medical Accountants and head of medical services at accountants RSM, said the same was true for his clients.
He said: 'Higher inflation and increased staff costs are putting many practices under pressure. Many are needing to employ more staff or having to pay their staff for more hours worked to cope with the workload.
'Locums costs continue to be an issue for many practices. While a 1% uplift may help ease these problems it remains to be seen if any extra income actually finds its way through to partners drawings.'
Mr Senior also pointed out that 'bearing in mind that the inflation in September 2016 was running at 1% and the Bank of England is expecting it to increase to perhaps 2% by September 2017 and possible 2.8% in the following year, I don’t think many practices will actually find the 1% uplift ending up in partners pockets'.
'For many I suspect that take home pay will indeed be flat,' he said.
But GPC deputy chair Dr Richard Vautrey told Pulse: 'The expectation of this year's contract investment leading to an average 1% pay uplift is something we should expect to happen.
'Particularly as the most up to date GP earnings figures published in September 2016 showed that average GP earnings in 2014/15 increased by an average of 0.4% overall and 1.7% for GP contractors, and that followed significantly less investment that year than this, following the derisory DDRB award that year.'
GP partners said they saw their pay drop by an average of 4% in the first six months of 2016/17, according to a recent Pulse survey.
What extra funding is in the 2017/18 GP contract?
The GPC said in a letter to GPs that it had 'agreed an increase in expenses that should deliver a pay uplift of 1%, which will be added to global sum'.
NHS Employers said it also included a 1.4% 'general expenses uplift'.
The larger rise in global sum stems from the return of £156.7m that had been tied to the Avoiding unplanned admissions DES.
Expenses agreed to be covered include the cost of population growth, the cost of CQC fees, indemnity inflation and reimbursement for added workload related to a new patient record transfer system being rolled out by Capita.