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GP funding uplift could see ‘first increase in earnings for several years’

The 3.2% funding uplift for general practice announced as part of the 2016/17 GMS contract could provide the first above inflation pay increase for partners in several years, according to medical accountants.

Accountants said that early impressions of the contract were cautiously optimistic, and said it stood a better chance of delivering a profit increase – ‘however modest’ – than its predecessors.

But they were unsure whether it would indeed achieve the 1% pay uplift after expenses promised in the contract announcement and some even warned that in areas with significant workforce issues and a high dependence on locums, earnings could drop yet again.

They also questioned whether NHS England’s plans might drive up locum prices in some areas, after it proposed bringing in a requirement for practices to report when they had spent more than an as-yet unspecified amount on locums

The contract, announced last Friday, will also see a 28% increase to the vaccination and immunisation item of service fees from £7.64 to £9.80.

Luke Bennett a partner at Francis Clark LLP and a committee member of the Association of Independent Specialist Medical Accountants (AISMA) told Pulse the GPC had done a good job in securing the funding boost.

He said that while it wouldn’t address general practice’s ongoing workforce crisis, it does recognise the increase in practices’ national insurance costs and means that ‘the underlying financial position shouldn’t deteriorate next year.’

Mr Bennett said: ‘As ever there will be winners and losers at an individual practice level, but an overall settlement that is intended to give a pay rise of 1% when inflation is running at less than 1% will be the first real pay increase (however modest) for many years.’

AISMA chair and head of medical services at accountants RSM, Bob Senior, told Pulse that it ’remains to be seen whether it delivers extra profit’, but ’it stands a better chance than some awards in recent years.’

He added that GPs’ costs were still creeping up, singling out the ‘quite dramatic’ increase in CQC fees, which are set to increase almost six fold within two years under current proposals, alongside the burden of inspection on practice.

Mr Senior said that NHS England’s proposal to set an upper threshold for locum rates – which the GPC have said was imposed unilaterally and does not form part of the contract – could inadvertently become the new benchmarks for wages.

He told Pulse: ‘In a lot of areas people aren’t going to be willing to work for less than the maximum, so whether that reduces costs, or in some areas that puts costs up a bit remains to be seen.’

And Michael Ogilvie, healthcare lead at OBC accountants told Pulse the idea of a cap was ‘pie in the sky’ but said the increase in funding without significant increase in work ‘has to be welcome’.

But he added: ‘The 2.2% uplift for expenses is a “laugh” because most of my practices are suffering from having to pay for locums to cover partners who are exhausted or who have retired.

‘These extra costs are not touched by 2.2% which I believe is meant to cover the increase in the outrageous wasteful cost of CQC and staffing costs – I can see a further 5% drop in earnings this year ahead.’

What was in the contract at a glance

  • Increased investment of £220 million (a 3.2% funding uplift) into the GP contract to deliver a 1% pay uplift and reimbursement to meet rising expenses facing practices, including higher Care Quality Commission (CQC) fees, practice upkeep and staffing costs.
  • An end to the dementia enhanced service with a transfer of resources to core funding.
  • No disruption for practices from annual contract changes, with no new clinical workload schemes or changes to the Quality and Outcomes Framework (QOF)
  • Joint commitment to explore the end of the QOF and “Avoiding Unplanned Admissions” enhanced service.

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