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Independents' Day

Accountants advise GPs to reduce drawings by up to 10% to prepare for contract imposition

Exclusive: GPs should start reducing their drawings by up to 10% in order to prepare immediately for a sharp dip in income from April, medical accountants have warned.

Accountants are advising practices to prepare early for the sweeping changes to the GP contract which are set to be imposed from April, with some predicting take-home pay could fall by as much as a fifth.

The GPC estimates that practices in England are set for a £31,000 gap in QOF funding next year unless they work much harder under the Government’s proposed contract deal for 2013/14. Practices in Scotland and Wales have been offered some concessions, but the GPC has warned they still face a ‘very significant increase in workload’ from April. The Northern Ireland Executive is still to announce its final deal for 2013/14.

Rosemary Smith, senior partner at RS Medical Accountancy, said the changes could result in a worst-case scenario of practice income being reduced by about 14% in England, if practices do not take on additional work.

She is advising her clients to cut their overheads, and suggesting GP partners reduce their drawings by 5% to 10% immediately.

She says: ‘It is advisable for doctors to reduce their drawings after estimating their income for the next year and making the decision before the start of the year.’

‘If they over estimate they can pay themselves out at the year end, but it is easier to cut drawings monthly than find themselves having to put larger sums back into the practice.’

But she added that cutting income may not be enough, and said practices would also have to trim back the extra services they offer patients. She added that GPs were reluctant to take on new staffing costs to deal with the rise in workload as they were not convinced the additional income would remain in place in future years.

She said: ‘Unless they cut overheads as well as cutting income, they will lose money. GPs will have to keep one step in front of the changes and spread their income streams so that they can cushion new proposals.’

Analysis: ‘Adjusting patient services is the only way forward’

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and head of medical services at RSM Tenon, said reducing drawings by 5% to 10% was ‘reasonable’ advice.

He said: ‘GPs should expect to see profits come under pressure, particularly with the changes to services coming and the QOF reductions, which won’t help.’

‘If profits are being removed from the system and workload added, then somethings got to give.’

Michael Ogilvie, client service director at OBC The Accountants, said he estimated that GP partners’ take-home pay would be reduced by around 10% to 20% in 2013/14, when factoring in the onset of punitive pension changes in March.

He said: ‘Many GPs may find themselves having to pay a larger tax bill on well invested pensions, as the Government reduces the tax free annual allowance from £50,000 to £40,000 or £30,000.’

‘They won’t be taking any new money in to the practice, but they’ll have to pay out into this tax increase.’

Dr Charles Zuckerman, medical secretary for Birmingham LMC, said based on his projections, if the average three partner practice with 6,000 patients did nottake up any of the new DESs, they would lose roughly £10,000 per partner, which would equate generally to a 10% to 15% reduction in profit for the practice.

Dr Zuckerman said: ‘The first thing to go will be any additional, unpaid work, for example the work that went in to setting up the CCGs. The last thing to go will be services that impact on patient care, so enhanced services that practices provide for minimal profit such as minor surgery or smoking cessation.’

Readers' comments (17)

  • As a semi retired part time GP I have enormous sympathy for my younger colleagues The NHS maxim of more for less has hit Primary Care hard.I sense a recruitment crisis ahead Quality work merits quality rewards BMA please take note

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  • Hey, there is a recession. People are losing jobs because there is no work. But we are different. Our workloads are increasing hugely. We should not have pay cuts - not when take home pay per consultation is as low as £1.80. We need to follow dentists and leave the NHS. If not now, When?

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  • I could understand no rise in drawing if it was just the last couple of years but we've had no rise at all for the last 7 (or is it 8 now) years, not even in line with inflation.

    On top of which, why are the GPs being made to take on substantially more work and take a pay cut. This cannot be explained simply by recession when our consultant colleagues (who are on higher wages) have not been asked to shoulder on the same burden.

    I suspect it's a lot more to do with the government's perception of primary care physicians, rather then just the austerity measures.

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  • As a trainee and someone looking forward to a career in GP I can't help but wonder about the direction GP is being pushed in. A looming workforce crisis, more work, less resources and a government that refuses to listen. There has to be a change in this approach from DH, surely...

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  • It's the piecemeal dismantling of the core primary care self employed model. Successive governments are signed up to this. More salaried GPs, larger practices, various private involvements in premises and services. It's gone by default with dentistry.
    Serial erosion of remuneration coupled with increasingly Orwellian micromanagement targets. Those who recognise this are fast retiring from this dog's dinner of a system. Newer entrants will know nothing beyond working in a stifling over managed job.., hardly a profession .

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  • My daughter wants to be a GP. I'm torn to whether to encourage her as it can be a wonderful vocation but its a shit job. I'm burning out and do not wish that for my child's future. I was happy providing patient care for a good wage now I hardly have the time to do anything other than tick boxes for less wage. I can handle the reduction in money what I cannot deal with urls the loss of the profession

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  • I retired in 2006 so I do not know what FT GP partners earn now but I suspect the Government thinks GPs still earn too much and the aim is to reduce income to about £75000 per annum which they think is about right for a FT
    GP [ MPs earn £66000 per annum ].

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  • As a father with a son due to become a GP next year, I can inform the NHS that like many of his fellow students he does not intend staying in the UK as he can have a better standard of living abroad. This government is dismantling the NHS at great speed and with little thought for the future.

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  • I'm 43 with good experience and a good work ethic, the kind of GP that wants the best of General Practice for the right reasons, but this constant dismantling of core vocational/professional GP has become too demoralising and I fully intend to head somewhere else to practice the rest of my career. If the older GP's are retiring and the younger ones are fleeing the country and even mid-career GP's like me are driven out then what hope is there. Its sad that its come to this but I've given up hoping it won't be so bad... I think it will.

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  • /We should stop co-operating with the governments request to carry out CCG work and opt out.

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