What the 6% pay rise means for GP practice finances

It’s been a busy week for general practice – along with the start of GP collective action and changes to the ARRS, the Government also made important commitments on doctors’ pay. Here, Eliza Parr looks at some of the questions around the promise of a GP pay rise

Earlier this year, GPs in England roundly rejected the Government’s contract imposition. The 2.23% increase to funding for 2024/25 was branded ‘derisory’. And for many GPs – still struggling with high energy costs, the burden of minimum wage rises, and rising workload – it simply wasn’t enough.

But the Government and NHS England suggested that this uplift was not final.

The final contract details, published at the end of February, indicated that a further uplift ‘may be made’ following recommendations from the Review Body on Doctors’ and Dentists’ Remuneration (DDRB), which were expected over the summer.

Now, months after the contract was imposed, the pay review body has made its recommendations – but what happens next is far from simple.

What we know so far

The DDRB report recommended a ‘6% increase to the salary scales, pay ranges and the pay element of contracts from 1 April 2024’. This applies to ‘contractor general medical practitioners’ and ‘salaried GP pay ranges’ in all four UK nations.

Since publication of the report, the Department of Health and Social Care (DHSC) has confirmed that the pay award is intended to cover salaried practice staff too, as well as GP partners and salaried GPs.

The DHSC has also clarified that this will be a ‘consolidated’ pay rise – meaning that it will take into account any previous uplifts. The 2024/25 contract arrangements were based on a ‘planning assumption’ that staff would benefit from a 2% pay growth.

So now, practices will see a further increase of 4% to the ‘pay element’ of their contract – i.e. the percentage of funding that goes towards staff pay – to reach a total of 6% for this financial year.

What this means for core general practice funding is still unclear. 

The DHSC and NHSE will now consult with the BMA on the total uplift to the GP contract – and in an address to GPs this week, health secretary Wes Streeting committed to getting this done ‘as soon as possible’.

Any injection of cash would be backdated to April, but this consultation period may leave many GPs confused about this year’s finances in the meantime. And whatever the final arrangement, the Government has stressed that GP practices – as self-employed contractors to the NHS – are ultimately responsible for determining pay rises for their employees. Of course, partners will also need to abide by the wording of any employee’s contract.

How might the Government apply a 6% pay rise to the total funding uplift?

Last year, the DDRB made the same recommendation of 6%, but only to salaried GPs and other practice staff.

To allow for this, in October the Government agreed to increase the global sum from £102.28 to £104.73 per patient for practices in England. In April 2023, the global sum had already increased from £99.70 as part of the imposed contract. This means a total 5% uplift was applied to the global sum throughout 2023/24 in order to finance a 6% increase to the staffing expenses element of the contract.

That calculation was based on the assumption that staff expenses accounted for 44% of the global sum – i.e. a 6% increase on 44% of the overall funding envelope. But this 44% didn’t include partner earnings – so presumably, the 6% pay uplift will apply to a far greater percentage of the overall funding this year. Confused? We don’t blame you.

Today, NHS England confirmed that the uplift will be implemented via the global sum again, stressing that they ‘firmly expect GP partners to honour the intent of this uplift and award the full 6% pay rises to all their staff’.

This will be on top of the 2.7% increase already made in April, when the global sum was lifted to £107.57 as part of the new contract. It’s unclear at the moment whether the Government will use the same calculation as last year, which prompted criticism from some GPs who said it did not accurately represent their staff expenses.

Medical accountant Andy Pow warns that using the global sum ‘risks getting it wrong’, especially for partner pay, as it does not take into account all the other practice income streams. His preferred approach would be to increase funding across the whole contract, including streams such as QOF and vaccination and immunisations.

And even this approach would exclude any local enhanced services, which are a significant source of income for practices.

‘Local funded money is now generally worth more on average across the country than even QOF is […] There’s big risk here that that funding will just get left as it is and not uplifted,’ Mr Pow adds.

The question around GP partners

When the Government and GPCE do agree on a figure for an uplift to the global sum, it doesn’t necessarily guarantee 6% pay rises.

This is especially true for GP partner pay. Partners, as independent contractors, share profits after paying for everything else, so ensuring they can take home 6% more than last year is a tricky business.

Mr Pow tells Pulse it is ‘near enough impossible’ to guarantee increases to partner pay, as it ‘depends on the mix at their practice’ – ‘some may end up with only 4%, some may end up with 7 or 8%’.

He says that ‘logically speaking’, if all income and expenses are uplifted by 6%, this should mean partners can see a 6% rise in their profit.

Despite these difficulties, it is nevertheless positive to see GP partners included in the process at all. In the previous five years, GP contractors were bound by the five-year contract framework and so excluded from any pay review. But this year, the DDRB heard evidence on GP partner income.

However, it’s worth noting the flaws in their review. The report uses earnings data from 2021/22 which means the earnings received by partners are skewed by the addition of Covid-19 payments during those years. Partner income will undoubtedly have taken a knock since then, but the DDRB says it is unable to make any robust assessment of this without the data.

Implementing pay rises for other staff

The 6% increase for salaried GPs and other staff should be more straightforward than those of GP partners.

However, there will still be issues around whether staff will get this rise. Katie Skea, medical accountant and partner at PKF Francis Clark, tells Pulse that the way last year’s uplift was calculated ‘assumed that everybody has the same proportion of staff’.

‘I think for a lot of my clients, they were more staff-heavy than what the funding was based on, so it hasn’t covered the pay rise,’ she says.

Indeed, the DDRB itself shed doubt on whether previous Government uplifts have been ‘sufficient’ for practices to implement to ‘full value’ of its recommendations.

There is also a question around staff working in general practice under the Additional Roles Reimbursement Scheme (ARRS). Last year, these roles were entitled to the pay rise recommended by the NHS pay review body for staff under Agenda for Change (AfC).

DHSC and NHS England have been unable to confirm whether this year ARRS staff will receive the same uplift – which is 5.5% – or whether they will come under the DDRB’s 6% recommendation, as is the case for other non-GP practice staff.

According to NHSE, the increase to this year’s GP contract included a ‘planning assumption of 2% pay growth uplift to the overall ARRS’. So, as with practice-employed GPs, it is likely any pay rise will be consolidated with this.

It’s also worth noting that, as of this week, GPs are included in the ARRS following a funding increase of £82m from the health secretary. Although there is not yet an established pay scale for these GPs, there may be a question around how any future DDRB recommendations would apply here.

What next?

In response to the pay review announcement, the BMA said GPs will be ‘deeply disappointed’ as it ‘goes nowhere near far enough’ to tackle the erosion of funding over the last five years.

But at this stage, as they enter consultation with the Government, all they can do is push for the fairest possible contract uplift. GP partners will want assurance that whatever calculation is used, they are able to pass on a 6% pay rise to their staff, and hopefully to their own profits too.

Any longer-term increases to GP funding – which Mr Streeting seems open to – will have to wait. In fact, the DDRB report highlighted that the BMA and the Government have been unable to ‘agree a robust methodology’ for setting expenses. It urged the Government to address this issue, possibly ‘as part of wider contract reform’.

Perhaps Mr Streeting agrees, stating this week that the GP contract ‘needs reform’. But in the meantime, a 6% pay rise (or near enough) will have to do.