This site is intended for health professionals only

GPC questions need for review of GP funding formula to take deprivation into account

The GPC has questioned whether there needs to be a review of the GP funding formula to support practices in deprived areas after a Government report claimed that GPs in deprived areas take home a larger proportion of practice income after expenses.

The HSCIC carried out an analysis, titled the GP Earnings and Expensesby Deprivation Score, England 2011-12 and 2012-13, to provide evidence on the potential link between deprivation and the ratio between GPs’ expenses and earnings to feed ‘any reviews of the Carr-Hill funding formula’.

The analysis, covering a two-year period from 1 April 2011 to 31 March 2013, found that GPs in more deprived areas seemed to be taking home a larger proportion of their income before tax after practice expenses.

The GPC said that the report ‘raises questions’ about the effectiveness of reviewing the Carr-Hill formula.

The GPC and the Government have been looking into how to account for deprivation in the Carr-Hill formula since 2007 without any practicable result, but a review of the formula was again included in the 2014/15 GP contract agreement.

The plans to pay GPs more to work in deprived areas formed part of the Liberal Democrat manifesto ahead of the 2010 election but this goal recently resurfaced in a different form as part of a 10-point plan to boost recruitment as a time-limited incentive to attract new GPs to under-doctored areas.

The HSCIC chairs the Technical Steering Committee (TSC), which also has representation from all the UK health departments, NHS England, NHS Employers and the BMA, and which is looking into how Carr-Hill can be reviewed to take better account of deprivation.

The report that came out of it looked at the Expenses to Earnings Ratio (EER) for GPs, extracted from HMRC tax data, compared to the Index of Multiple Deprivation (IMD) for the practices the GPs are linked to covering a two-year period from 1 April 2011 to 31 March 2013.

Its report said: ‘The EER for 2011-12 and 2012-13 appear to show that both the EER and EER excluding premises costs are lower the more deprived the GPs’ practice patient catchment area. This means that in more deprived areas a lower percentage of GPs’ gross earnings are taken up by expenses and therefore a GP is receiving, on average, a higher proportion of their earnings as income before tax.’

On the basis of the findings, the GPC has questioned whether the review of Carr-Hill, which has been agreed in subsequent GP contract negotiations between the GPC and the Government, was actually the right way to go.

GPC deputy chair Dr Richard Vautrey said: ‘Many assume that GPs working in practices in affluent areas would earn more than those in deprived areas but this paper suggests that that is not the case and is in fact the reverse.’

He added: ‘It also raises questions as to whether changing the Carr-Hill formula to move more funding away from practices serving elderly populations towards those in areas with higher deprivation would necessarily achieve the aim it was intended to.’