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GPs warned to prepare for 4% pay cut

Exclusive Accountants are predicting a reduction in GP drawings of up to 4% next year, warning that the Government’s 1.32% practice funding uplift will fail to cover rising practice expenses - and accusing ministers of ignoring key evidence when making the award.

Health secretary Jeremy Hunt yesterday rejected a recommendation from the doctors’ pay review body for a 2.29% funding uplift to cover rising staff expenses, on the basis that he wanted to ensure GP practice staff were subjected to the same 1% limit on pay as other members of the public sector.

But the Government was accused of being ‘disingenuous’ in its analysis of the Review Body on Doctors’ and Dentists’ Remuneration’s report, which said a 3.4% increase in funding for staff expenses was needed.

The DDRB report said a number of factors could be driving the increase in staff expenses, other than simply increasing staff pay, including ‘a change in the composition of the practice workforce to include, for example, more specialist nurses, or to deal with the consequences of commissioning’.

But ministers rejected this analysis and said they would only allow for a 1% increase in staff expenses to ‘reflect public sector pay policy’ of a rise in pay of 1%.

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and head of medical services at RSM Tenon, said there ‘was an element of the Government being disingenuous’ in the way it had presented the DDRB report.

He said: ‘The 3.4% increase [for staff expenses] recommended by the DDRB was for a whole raft of things - like organising the practice for commissioning - but the Government have chosen to interpret that report very selectively.’

‘We’ve got a new health minister who wants to be seen to take a hard line and be quite firm with GPs.’

Mr Senior said he believed that the overall uplift of just 1.32% for GMS practices could equate to a ‘3% to 4% drop’ in income for GPs.

He said: ‘There will be inflation on overheads and there is little sign enhanced services will bring in any more money. CCGs will be looking to reduce costs, and I haven’t spoken to anyone who thinks the QOF changes will be positive for the bank balance, rather than negative.’

‘GP morale is at the lowest I’ve ever seen it. This will do nothing to improve that situation.’

Paul Samrah, partner at Kingston Smith accountants, said pressure from staff for pay rises and superannuation fees would all contribute to a fall in GP partners’ drawings.

He said: ‘Generally it’s not looking too good. The costs of linking up with the CCG, in terms of management and learning time will affect the practices in the first year. Overall I think GPs will be 3% to 4% down.’

Debbie Wood, vice-chair of AISMA and head of medical services at Moore and Smalley accountants, said: ‘In an average practice of three partners with a list size of 6,500, each GP could see a couple of thousand each less than they’re used to.’

GPC chair Dr Laurence Buckman said he was ‘bitterly disappointed’ that Mr Hunt had rejected the DDRB’s recommendations.

‘The Government is essentially telling GPs that their staff should earn less than what the DDRB has indicated, or that GPs should take another real terms pay cut,’ he said.

Dr Robert Morley, executive secretary of Birmingham LMC, warned that GPs could have to contend with a fall in profits of between 10% and 20% if they wanted to maintain the current level of services for patients.

But he added: ‘I suspect practices will be unable to maintain current services because of difficulties with recruitment and retention of GPs, nurses and other staff.’

Dr John Hughes, honorary secretary of Manchester LMC and a GP in Crumpsall, Manchester, said he was ‘extremely disappointed’ in the uplift proposed and that it would mean a pay cut for GPs.

He said: ‘This is about the fifth or sixth year that the uplift has not met expenses, meaning that the take-home pay for GPs is dropping. We are quite happy to have a pay freeze or a small increase but I don’t think it is fair that GPs should be forced to have another pay cut.’

Pulse Live: 30 April - 1 May, Birmingham

Pulse Live

You can find out more about how to protect your earnings at Pulse Live, Pulse’s new two-day annual conference for GPs, practice managers and primary care managers. Richard Apps, partner at RSM Tenon, will be presenting a session on how to maximise your practice income and keep an eye on your cash flow.

Pulse Live offers practical advice on key clinical and practice business topics, as well as an opportunity to debate the future of the profession, and a top range of speakers includes NICE chair designate Professor David Haslam, GPC deputy chair Dr Richard Vautrey and the Rt Hon Stephen Dorrell MP, chair of the House of Commons health committee.

To find out more and book your place, please click here.

Readers' comments (10)

  • as i posted the other day, tory agenda is to get target GMS pay down to £80,000 by the election, they have effectively destroyed the pension scheme and they want a salaried service at a lower rate of pay,however people will leave either overseas or retire,nothing but a bunch of bullies

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  • I think a 4% pay cut is very optimistic. I assume the accountant has based this on GPs being able to do all 4 DES without extra costs? I doubt my practice will achieve that despite already working 50+ hours a week.

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  • @Anonymous | 14 March 2013 6:45pm

    The threat of leaving and going overseas is fast becoming old and worn out.The government called our bluff on that a long time ago.They know perfectly well that the vast majority of GPs are not going to suddenly sell off their homes,take their kids out of private schools and head for Australia.Real life doesn't quite work like that.Stability and security takes precedence.

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  • First we had Mr La-La. Now we have the minister for Murdoch as our Health Secretary. What joy!

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  • I'm retiring on 31.3.13 because of the passage of the Health and Social Care Act 2012 - but even I didn't expect that the government would follow up on the huge workload imposed by CCGs on practices with a determined effort to cut practice resources - and be incompetent enough to reach two weeks before go-live with so many undecided issues - such as SI257 (reworded) - left hanging.

    Maybe I'm wrong and it *is* all deliberately planned to destroy general practice rather than just being monumentaly incompetent?

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  • Second thought on Jeremy Hunt's take on GP staff pay being limited to 1%: hasn't anyone told him that if he thinks a 1% increase (how will it be distributed between practices?) would deliver 1% to staff, he has failed to take into account the 14% of this needed for employer pension contribution and any increase in NI etc?
    In other words, does he understand employment law and business operations, and/or has he been properly briefed?

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  • Isn't it time all GPs stopped engaging with the government.
    With pay awards like this why bother with CCGs?
    You are simply propping up this bullying government.

    Its time for all GPs to pull out of CCGs, referral managment schemes, medicines management etc.

    Only then will the bully stop -when we hurt them back

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  • Pope Francis is catholic, the bear s**ts in the woods and the government wants to squeeze more out for less. Everytime you disagree, as a clinician about how something should be managed, copy (wiith consent) your actual suggested actions to the patient's MP and CCG lead. Swamp them with your misgivings about patient care, prescribing restrictions etc... If you feel your workload is too much then admit you're being dangerous to your health and the patients; tell your appraiser/responsible officer and your patient's MP.
    None of the above will work though as we're cornered by our self-employed status and the budget defecit that the country has. If HMG won't afford a decent health service and treat its providers with respect but can bail out banks and neglectfully allow tax evasion then they will set it all to fail. We'll just have to go down with the rest of the country whilst trying to do what's best for people.

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  • If govt said become salaried at th 97,000 average gp earning, most of us would go for it and leave running of the practice on the govt. Not worth running it independently any more.

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  • actually, this dreadful contract might just fall over and have to be renegotiated. if we stop trying to so hard to hop through hoops and trying to be popular, and just delivered what we are paid to do (an appt with a doc in 2 days, any quicker go to A&E- they are funded for it), stop trying to work so hard on prescribing savings (doesnt do us a blind bit of good, it involves working more for no real reward) and simply disengage from any LES or QOF target that doesnt pay more than it costs to deliver (Health Checks, anyone?). if our patients paid £9/ month to be members of our practice, and paid £10 for a consultation, we would probably make as much as we do now - and at least if we see more patients it would be financially viable. the current block contract for primary care rewards the department of health shoving as much extra work into the same envelope as they can. until GP's grow a pair and start refusing to do this stuff, they will continue to do it. My hope is that this year will be SO painful, that we as a profession will finally grow a spine and start taking action, not just whinging and hoping someone will take pity on us.

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