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The link between practice funding and closures

The link between practice funding and closures

Pulse’s Lost Practices investigation, which looked at the reasons behind the permanent closure of 474 practices in the UK between 2013 and 2021, considered whether funding was a factor.  

Of the 232 practices in England where funding data was available, two-thirds (69%) were receiving below the average funding per patient in the year before they closed.

However, Pulse’s investigation also revealed that the ‘minimum practice income guarantee’ (MPIG) was not a major factor in practices closing – contrary to previous expectations.

Dr Adam Janjua, a Fleetwood GP and former clinical chair of the NHS Fylde and Wyre CCG, says any cut in funding for practices can have ‘serious detrimental effects’.

‘Funding is a huge factor [in closures] because that is the formula by which we make our living and are able to pay our staff, even a £1 per patient reduction in funding is a job – that is a full-time receptionist in a practice of 12,000 patients.’

He explains that in 2014 his own practice merged with another nearby after both experienced a loss in historic funding of £25,000 and £50,000 respectively. This had previously been agreed under the Primary Care Trust, and so the CCG was unable to carry it forward.

‘In order to be able to get some sort of safety of finances, we had to merge because then we could do a little bit of cost-cutting to make it work. But practices that don’t have that option will have to close, because you need a minimum level of staff to have safe services as well.’

Former BMA GP Committee chair Dr Richard Vautrey adds that finances ‘do play an important part’ and if practices haven’t had the necessary resources for a number of years, then it compounds their problems. But he says that even with adequate finances, practices can still be struggling, especially with recruitment.


The impact of other funding changes – specifically the withdrawal of MPIG – are less clear. The MPIG was introduced in the 2004 contract to protect practices disadvantaged by the new funding formula. In 2014, the Government began phasing it out, claiming this would lead to fairer funding.

But Pulse found the MPIG wasn’t a major factor in permanent closures. We reviewed practices receiving MPIG in 2014/15, when phasing out began – 37% of practices received it that year. When we looked at the number of practices that permanently closed since 2014, 37% (of the 306 where data was available) had received MPIG funding in 2014/15. This only slightly changed for more recent closures, when the effect of the funding withdrawal is more likely to be felt.

Medical accountant Andy Pow says: ‘A lot of the effect of MPIG withdrawal depended on solutions implemented locally.’ However, he adds: ‘The risk is how integrated care systems look at local funding… [if] they want to move it to PCN level, that will destabilise practice level funding.’

The proportion of closed practices in England that were GMS, APMS and PMS also broadly mirrored the national picture, although Pulse’s analysis did identify 37 examples of closures where an expiring APMS contract had been the trigger.