Are local enhanced services unfunded charity work?

Local enhanced services form a crucial part of GP income, helping practices stay afloat. But a major new Pulse investigation shows that in many areas, ICB funding is stagnating. Here, Eliza Parr looks at the impact on practices

‘If a management consultancy firm was asked to review a GP surgery then a fair and expected challenge to many would be “why are you doing so much charity work – can you really afford to?” Any business needs to look at work they do that is unresourced,’ says Wessex LMCs CEO Dr Laura Edwards.

Collective action might have come to an end in England, but one enduring principle remains – that GPs shouldn’t be providing services for free.

But a Pulse investigation into local enhanced services reveals that, in many cases, this is exactly what some GP practices are doing. It reveals stagnating budgets, well below the funding needed for practices to carry out the requirements within these locally commissioned services.

At a time of real-terms funding reductions for the national GP contract, many practices are relying on local enhanced services to make up the shortfall. Andy Pow, advisor to the Association of Independent Specialist Medical Accountants (AISMA), says local enhanced service funding is the second most important source of GP practice income after the global sum. ‘It’s bigger than QOF, it’s bigger than all the national enhanced services,’ he says.

And in those areas where LMCs have been successful in negotiating extra LES funding, it has proved a lifeline. For example, in Lancashire and Cumbria, the ICB’s local ‘quality contract’ is worth £26.50 per patient, which makes up around 20% of a practice’s income. LMCs chief executive Dr Adam Janjua says: ‘The quality contract is our sort of beacon of hope to try and at least maintain the level of income that we are getting into practices so that we can provide the services that we need for our patients.’

This included a vital £14m injection from 2025/26. But this followed years of below inflation funding increases. In the previous year, LES funding in the ICB rose by just 0.38%, from around £39.8m in 2023/24 to £39.9m in 2024/25. Dr Janjua says practices had been facing ‘stagnation, financial instability, the inability to invest’ – and especially so in areas ‘where they’re already quite pressured’.

All this had a knock-on effect for recruitment, he adds: ‘The partner income, I would say, dropped as well. So all of these kinds of things have a detrimental impact on recruitment. If your partnership earnings show that you’re a poor earner, you’re not going to be able to get a partner. So you’re not able to attract new GPs into the area. So overall, there’s stagnation in patient care, there’s stagnation in practice development.’

Budgets stagnating

Unfortunately, Pulse’s investigation into local enhanced service funding over the previous two financial years indicates that this year’s funding injection in Lancashire is a bit of an anomaly. In some areas, funding appeared to reduce, while in many it stagnated with rises below inflation.

In Leicester, Leicestershire and Rutland (LLR), local funding went up by only 1%. LMC chief executive Dr Grant Ingrams says this is ‘essentially a pay cut’ for GPs. He adds: ‘What it means is that each year practices are getting tighter and tighter financially… I know that practices are making decisions when partners go not to replace them with another partner because they can’t afford them, or trying to cut down the amount of locum time.’

In Bath and North East Somerset, Swindon and Wiltshire (BSW) ICB, budgets are remaining stagnant. Dr Edd Rendell, medical director at BSW LMC, says that budgets for many local services in his area have ‘historically been the same for years and had not been uplifted financially to keep up with rising costs and inflation’. Keeping funding at the same level is in real terms a cut for practices, when CPI inflation was at 3.2% over the 12 months leading up to March 2024.

Mr Pow also points out that the majority of the delivery cost associated with local enhanced services is staffing, which has seen increased pressures with yearly pay uplifts. He says: ‘When the national government says all staff in the NHS are going to get an uplift of pay, if your income levels don’t go up to match that, then effectively you’re going to have a higher cost and a stagnated income, which means reduced profits for the part of the business that needs those profits to pay themselves, to pay the partners.’

But the negative impact of stagnating LES budgets on practices is not solely financial. Dr Rendell says it puts GPs in an ‘impossible dilemma’ where they feel obligated to continue providing services to patients despite their unviability. ‘ICBs have said “this is all we can afford” – there has been a reliance of the NHS on goodwill and moral conscience, but practices cannot remain viable businesses on goodwill,’ he tells Pulse.

Budgets not being spent

Stagnating budgets in many parts of the country don’t tell the full story. Because, in some cases, these budgets are not being fully spent. In BSW ICB, actual spend on LESs between 23/24 and 24/25 appeared to drop by just over 1%, despite the budget remaining the same across the two years. In part this was due to the LESs not reflecting health needs – spend on the ‘Ukraine Health Checks’ local service understandably dropped from £55,400 to around £15,400. This money does not appear to have been reallocated to other general practice services, despite the changes in circumstances.

More commonly, full budgets may not be spent because the local contracts are not financially viable for practices. Dr Ingrams says that for local enhanced services, if GPs are ‘lucky’, the ‘costings equal the cost of the actual provision’. But with huge costs from National Insurance contribution hikes in 2025/26, local funding could see ‘another significant reduction’.

Last year, Humberside LMCs sought to highlight this lack of financial viability among its own package of local enhanced services. Local GP leaders provided a RAG rating for each service, and for a substantial proportion, the verdict was that the ‘current tariff is unlikely to meet costs for delivery’. Humber and North Yorkshire did not respond in full to Pulse’s Freedom of Information request, so a year-on-year comparison is not possible.

During a debate on GP unemployment at the LMCs conference in Glasgow earlier this month, Hampshire and Isle of Wight GP Dr Chris Castle told delegates that the LMC had just that week held a conversation with the ICB about the contract for local enhanced services. ‘We were talking to them about the fact that we were at capacity and if they wanted us to take on the contracts, the finance within those contracts is not enough for us to employ GPs…these small pots of money that we’re getting are not enough,’ Dr Castle said.

System-wide pressures

It’s perhaps no surprise that some ICBs struggle to award funding uplifts in line with or above inflation, given the woeful state of their own finances.

A damning report by the UK’s public spending watchdog last year highlighted that the NHS faced a deficit of £1.4bn in 2023/24, with three ICBs having to be put in special measures. A survey within the report found that 15 out of 19 ICB chief financial officers said the underlying financial position of their ICB had deteriorated that year.

And more recently, ICBs have been asked to cut running costs by 50% with redundancies which could achieve around £700-750m of savings on an annual basis. This news came off the back of the Government’s announcement that NHS England will be abolished and brought into the Department of Health and Social Care (DHSC) over the next two years.

Balancing ICB budgets – particularly amid even greater top-down pressure to make cuts – is no walk in the park, it seems.

National variation

There is no doubt variation in budgets and spend across the country. At the recent UK LMCs conference, Dr Ben Curtis from Cambridgeshire LMC pointed to this lack of national consistency. He made the case for defining core GP work, arguing that this is crucial at a time when the Government is pushing for activity to be shifted from hospitals to the community.

‘So there’s going to be more LESs and DESs. Why the fuss?… Aren’t LESs and DESs equitable, properly resourced and defined at the moment? Hmm.’ Dr Curtis’s comments were met with laughter from his fellow LMC leaders. He went on to say that GP practices face a ‘postcode lottery’ where ‘in one area enhanced services are funded, but in another, the partnership delivers it out of core’.

Medical accountant Mr Pow also pointed to this ‘huge variation’ across the country, even for the same service. ‘If you look at spirometry, in one part of the country, they were paying a lot more per patient than in others,’ he says. Mr Pow argues that to tackle this, there should be an ‘national element’ to local services, where ICBs are obliged to spend a minimum per patient in order ‘to make sure it’s more level’.

Some ICBs told Pulse that funding had jumped a huge amount. For example, Hampshire and Isle of Wight (HIOW) ICB said funding went up by almost 33%, but this was news to LMC leaders.  Wessex LMCs CEO Dr Edwards says they were ‘not aware that there would be more investment’.  This might be in part due to the slippery nature of ICB commissioning of local services to GP practices, with overlaps between a number of budgets including PMS and PCN contracts as well as LES contracts.

LES reviews

But some of HIOW’s substantial jump in funding could also be the result of the ICB’s review of all local enhanced services ahead of the 2024/25 financial year. The ICB told Pulse this was to ensure all services were aligned across the patch.

Many ICBs have done the same since their establishment in 2022, in a bid to create a consistent offer of local services rather than the fragmented hangover from ex-CCG footprints.

Dr Edwards says that across Wessex, ICBs ‘have been keen to create equality across their footprints’, but this has resulted in ‘winners and losers from historic services in place’ which ‘can be very destabilising’ for practices. ‘As an LMC we have argued that ICBs should be seeking to level up as their aim,’ she adds.

Dr Ingrams in LLR says that in 2022, the ICB completed a review of all LESs which resulted in a boost to funding, which could explain the minimal increase to funding between 2023/24 and 2024/25. This review meant GPs began to be paid fairly for services such as phlebotomy and wound care, which may still go unfunded in other parts of the country. ‘Practices in other areas are talking about trying to get funding for now – we had already sorted that out.’

But Dr Ingrams notes that local commissioners were ‘dragged kicking and screaming to actually do it’. ‘It’s not as if they welcomed us with open arms and said “of course we’re going to pay you more”‘, he tells Pulse.

Collective action

While LLR LMC may have been ‘ahead of the curve’, as Dr Ingrams says, many areas have started over the past year to address underfunded work as part of collective action. The BMA’s ‘menu’ of options included ‘serving notice on any voluntary services currently undertaken that plug local commissioning gaps’.

Pulse reported on several areas where GPs came together to serve notice on local enhanced services and shared care arrangements, arguing that they were no longer financially viable. And we’re starting to see the fruits of these collective efforts. In Somerset, collective action highlighted several gaps in services which led to an additional £2m investment from the local ICB. This included uncapped funding for inclisiran, denosumab and pessary fittings.

Meanwhile in Lancashire and South Cumbria, the £14m boost to LES funding was celebrated by their LMCs as a ‘huge’ achievement. This resulted from 20 months of pressure from local GPs, helped by collective action in more recent months.

LMCs chief executive Dr Janjua was pleased that the ICB’s review of LESs led to levelling up rather than levelling down: ‘One thing I have to give the ICB credit for is that they didn’t come in and go “No, everybody’s going to earn the same” and down-level everyone to the lowest paid area.

‘They recognized the fact that the CCGs, the investment that they had put in, it wasn’t investment that was going straight into GP partners’ pockets, it was for things that they had employed people to actually provide these services.’

In BSW, the ICB has also conducted a local enhanced services review ahead of the current financial year, looking at the former three CCG areas. Dr Rendell says it has been ‘helpful’ to address underfunded services as part of this review, noting that collective action has helped practices to change their mindset.

‘I think collective action gave practices a choice. Before, practices might have thought if we don’t sign up, patients are still going to see you and ask for the service, you just won’t get any resource. Whereas with collective action, there was an opportunity to have a choice. It opened up the possibility of saying no and then being appropriately resourced for the activity.’

Neighbourhood health

Ensuring a consistent offer of services for patients across the ICB footprint makes sense. Otherwise, the hangover from CCGs means patients in one practice may not have access to a service offered to their neighbours registered at a nearby practice. And income levels for neighbouring practices may vary substantially.

However, change is afoot for the local commissioning landscape. Along with the abolition of NHS England and the 50% reduction target for ICBs, it was recently revealed that ICBs may ‘transfer’ out some of their functions to other organisations. This includes transferring ‘primary care operations’ to new ‘neighbourhood health providers’ – although it seems ICBs will retain most responsibility for primary care commissioning.

If you’re wondering what those neighbourhood health providers might look like, you’re not alone. There has been precious little detail about the Government’s oft-cited push to create a neighbourhood health service – but more is expected in the upcoming 10-year health plan.

The basic principle is to deliver ‘more care at home or closer to home’ by bringing together services across the system to provide ‘integrated’ care. And whichever way different areas set up their neighbourhood teams, the aim is to build care around the local population.

Perhaps, then, ICB efforts to equalise LESs across their patches run slightly counter to the national push for neighbourhood care. Dr Edwards said it is ‘understandable but interesting’ to see ‘the move to equalising over an ICB geography’. She points to two difficulties: ‘Firstly that the ICB areas are potentially all about to change again, and secondly that such large area equality then potentially flows counter to the political push to tailor to local population need which is the flow of neighbourhood health.’

Indeed, a recent blueprint for neighbourhood health in London said that a ‘key challenge’ for all systems is how to ‘balance a consistent set of services…with the ability of frontline teams to respond to specific individual and local needs’.

While ICBs are likely to retain commissioning responsibility, the requirement to deliver neighbourhood health and the ‘left shift’ will undoubtedly bring about change to how general practice is delivered. Whether local enhanced services are on the table remains to be seen.