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GPs warned to prepare for 4% pay cut

Exclusive Accountants are predicting a reduction in GP drawings of up to 4% next year, warning that the Government’s 1.32% practice funding uplift will fail to cover rising practice expenses - and accusing ministers of ignoring key evidence when making the award.

Health secretary Jeremy Hunt yesterday rejected a recommendation from the doctors’ pay review body for a 2.29% funding uplift to cover rising staff expenses, on the basis that he wanted to ensure GP practice staff were subjected to the same 1% limit on pay as other members of the public sector.

But the Government was accused of being ‘disingenuous’ in its analysis of the Review Body on Doctors’ and Dentists’ Remuneration’s report, which said a 3.4% increase in funding for staff expenses was needed.

The DDRB report said a number of factors could be driving the increase in staff expenses, other than simply increasing staff pay, including ‘a change in the composition of the practice workforce to include, for example, more specialist nurses, or to deal with the consequences of commissioning’.

But ministers rejected this analysis and said they would only allow for a 1% increase in staff expenses to ‘reflect public sector pay policy’ of a rise in pay of 1%.

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and head of medical services at RSM Tenon, said there ‘was an element of the Government being disingenuous’ in the way it had presented the DDRB report.

He said: ‘The 3.4% increase [for staff expenses] recommended by the DDRB was for a whole raft of things - like organising the practice for commissioning - but the Government have chosen to interpret that report very selectively.’

‘We’ve got a new health minister who wants to be seen to take a hard line and be quite firm with GPs.’

Mr Senior said he believed that the overall uplift of just 1.32% for GMS practices could equate to a ‘3% to 4% drop’ in income for GPs.

He said: ‘There will be inflation on overheads and there is little sign enhanced services will bring in any more money. CCGs will be looking to reduce costs, and I haven’t spoken to anyone who thinks the QOF changes will be positive for the bank balance, rather than negative.’

‘GP morale is at the lowest I’ve ever seen it. This will do nothing to improve that situation.’

Paul Samrah, partner at Kingston Smith accountants, said pressure from staff for pay rises and superannuation fees would all contribute to a fall in GP partners’ drawings.

He said: ‘Generally it’s not looking too good. The costs of linking up with the CCG, in terms of management and learning time will affect the practices in the first year. Overall I think GPs will be 3% to 4% down.’

Debbie Wood, vice-chair of AISMA and head of medical services at Moore and Smalley accountants, said: ‘In an average practice of three partners with a list size of 6,500, each GP could see a couple of thousand each less than they’re used to.’

GPC chair Dr Laurence Buckman said he was ‘bitterly disappointed’ that Mr Hunt had rejected the DDRB’s recommendations.

‘The Government is essentially telling GPs that their staff should earn less than what the DDRB has indicated, or that GPs should take another real terms pay cut,’ he said.

Dr Robert Morley, executive secretary of Birmingham LMC, warned that GPs could have to contend with a fall in profits of between 10% and 20% if they wanted to maintain the current level of services for patients.

But he added: ‘I suspect practices will be unable to maintain current services because of difficulties with recruitment and retention of GPs, nurses and other staff.’

Dr John Hughes, honorary secretary of Manchester LMC and a GP in Crumpsall, Manchester, said he was ‘extremely disappointed’ in the uplift proposed and that it would mean a pay cut for GPs.

He said: ‘This is about the fifth or sixth year that the uplift has not met expenses, meaning that the take-home pay for GPs is dropping. We are quite happy to have a pay freeze or a small increase but I don’t think it is fair that GPs should be forced to have another pay cut.’

Pulse Live: 30 April - 1 May, Birmingham

You can find out more about how to protect your earnings at Pulse Live, Pulse’s new two-day annual conference for GPs, practice managers and primary care managers. Richard Apps, partner at RSM Tenon, will be presenting a session on how to maximise your practice income and keep an eye on your cash flow.

Pulse Live offers practical advice on key clinical and practice business topics, as well as an opportunity to debate the future of the profession, and a top range of speakers includes NICE chair designate Professor David Haslam, GPC deputy chair Dr Richard Vautrey and the Rt Hon Stephen Dorrell MP, chair of the House of Commons health committee.

To find out more and book your place, please click here.