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Practice income set to reduce as number of GPs increases, warns pay review body

The independent pay review body has voiced concern that the income of individual GP contractors will continue to reduce as the overall number of GPs in England increases.

In the annual report published today by the Department of Health, the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) said it was ‘concerned’ that practice income is continuing to reduce despite claims from the Government that they are increasing income. 

It warned that an expansion in the number of GPs will have ’further negative implications for pay’.

The report also recommended that the grant given to GP trainers should be increased by 1% – against NHS England’s wishes. 

For future years, the DDRB said that it would consider targeting funding uplifts in future years so that the specialties with the biggest recruitment and retention problems – including general practice – would receive higher uplifts than others.

The Government usually bases its practice funding uplift on the DDRB award, but it has already agreed to a 3.2% increase worth £220m overall as part of the concluded contract negotiations – leading to the potentially largest pay increase in ten years.

NHS England said it would revisit the funding award if the DDRB recommended a higher uplift, but the report did not do so.

But the pay review body did say that funding in future years could decrease if the Government was successful in recruiting 5,000 more GPs, as it plans to do.

NHS England told the DDRB that the reason behind falling income over the past decade was a growing number of GPs.

The report said: ’[Our report] gives detail on how GMPs’ income net of expenses has changed over the last year, and it continues to follow a downward trend, despite the health departments’ acceptance of our recommendations that GMPs’ income should increase in recent years. We are concerned about this.’

It added: ’We asked NHS England to explain the fall in GMPs’ income, and it attributed part of the fall to the decrease in patients per FTE GMP.

’Given the link between practice funding and capitation payments, we note that plans to increase the number of GMPs, particularly when such expansion might outstrip the growth in patients, could have further negative implications for pay.’

On the issue of targeting funding uplifts to areas and specialties that are struggling to recruit, the report says: ’We have concluded that we should not target our recommendations for 2016-17 on the basis of recruitment and retention. Issues do exist in some specialties and locations and unless the parties provide evidence that other approaches are working, we think that there could be merit in testing a targeted pay approach in future years to see whether that is more effective.’

In recommending the uplift in trainers’ grants, the DDRB noted that the Government is in the process of reforming pay to a tarif-based system but says that since this work is ‘very slow’ (having first been referred to in a DDRB report in 2007), the grant should increase by 1% in 2016/17.

The decline in GP income

 Income and expenses

Income and expenses

The DDRB has expressed concerns about continued erosion of GP take-home pay for some years now.

In 2014, it first expressed concern that its formula for calculating an uplift was not fit for purpose and needed to be reviewed.

Last year it said it did not wish to use it and that a 1% pay uplift should instead be negotiated by the parties. But then the Government went ahead and applied the flawed formula itself.

This year, the DDRB report has been published after the uplift has been announced, meaning the formula is less relevant. However despite this the independent review makes some important observations for the Government to observe for the future if saving general practice from the brink is truly one of its priorities. 

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