GP partner earnings see first real-terms increase in 15 years

GP partner income increased faster than their expenses in 2020/21, for the first time since 2005/06, according to official data.

The average earnings across all types of GPs in England increased by 11.1% during the financial year, NHS Digital data published today has shown.

The statistics showed that the ratio of expenses to earnings, which represents the proportion of gross earnings taken up by expenses, was 67.6% in 2020/21 – a 2.1% point decrease since 2019/20.

Last year’s report had made clear that ‘since 2005/06, expenses have been increasing at a faster rate than income before tax for GPMS contractor GPs in England, resulting in an expenses to earnings ratio which has grown each year’.

But this year’s report, which relates to 2020/21, said the average GP partner earned £142,000 before tax – a statistically significant 16.6% increase from 2019/20 – while the average income for salaried GPs rose by 2.0%, from £63,600 to £64,900.

The data also showed that GP partners’ expenses rose by 5.7%, to £296,700.

Overall, the average earnings for all GPs across England increased by 11.1% to £111,900.

Jenny Stone, partner at RBP Chartered Accountants, told Pulse the majority of RBP’s clients had an increase in profits in 2020/21, but said this was ‘a temporary increase’ and mainly due to ‘income being protected, Covid support money, Covid vaccination income and spending less on clinical costs such as locums during the first lockdown’.

She added that clients’ 2021/22 accounts show profits have stabilised, ‘however for 2022/23 we are anticipating that profits will fall’. 

Ms Stone said: ‘This is due to the fact that the global sum increase was intended to give a 2.1% pay rise, however this was agreed before the pandemic, increase in National Insurance and recent cost of living crisis.’

BMA England GP committee chair Dr Farah Jameel said the figures ‘reflect the monumental efforts GPs made to the pandemic response and their leading role in the vaccination campaign’, as well as ‘the additional short-term and temporary emergency Covid response funding given to practices to enable them to successfully deliver the vaccination programme, despite huge and historic workforce shortages’.

She said: ‘This was not a “pay deal”, and as the Government’s own data shows, it also comes after real-terms cuts in GP income over the previous 15 years.’

Dr Jameel said: ‘Sessional GPs of course played a pivotal role but may have seen their working hours or arrangements impacted by the pandemic as services were reconfigured; regional variations, and workforce supply and demand impacted their income too.

‘Meanwhile partners as contract holders take on all the risks and responsibilities of running a practice, and they hold the liability when times get hard – as we are seeing right now with huge increases in inflation and the rising costs of energy.

‘The cost-of-living crisis and energy crisis – alongside an NHS staffing crisis – will now impact deeply on patient care, threatening the very existence of some practices.’

Pulse learned last month that GP practices could face losses of tens of thousands of pounds due to rising inflation.

The Government confirmed to Pulse in July that GP practices will not get funding uplift to cover the recommended pay rise of 4.5% for salaried GPs and staff.

In response to the ‘derisory’ pay award, the BMA’s GP Committee has been given a mandate to explore GP industrial action.

In 2020, an independent review found that GPs have the highest gender pay gap among doctors working in the NHS, with women earning significantly less than men.

Data from January 2020 also found that almost 90% of GPs earn less than £100,000 a year, despite the figures highlighting that payment stretches to more than £600,000 in one case.

In October 2019, a study found that GP partners’ income decreased by 10% in real terms over a nine-year period, which ‘may have contributed to current recruitment and retention problems’.