This site is intended for health professionals only

Accountants estimate up to 7% drop in GP take-home pay after ‘kick in the teeth’ on funding

Exclusive Accountants have disputed the calculations of the pay review body, saying that their estimation of staff expenses ‘doesn’t make sense’ and that their recommendation of a 0.28% uplift in practice funding could translate to up to a 7% drop in GP take-home pay.

Medical accountants estimate that staff expenses have risen by around 2% to 3% – compared with the 1.4% decrease claimed by the Review Body on Doctors’ and Dentists’ Remuneration – and have warned that practices are going to have to look at cutting staff to survive.

They said that a funding uplift of nearer to 1.9% would have meant that GPs would have the overall desired 1% rise in take-home pay.

The Government accepted advice from the pay review body today that falling staff costs should be taken into account when giving GPs a 1% rise in income, meaning that only a 0.28% uplift in practice funding will be awarded from April.

The GPC called the award a ‘kick in the teeth’ for GPs and said that the funding rise is likely to make the morale and workforce crisis in general practice ‘much worse’.

The DDRB itself admitted in its report that the formula-based approach to GP pay recommendations was ‘flawed’ and did not effectively reflect staffing costs, expenses and reimbursements, hours worked or variations in correction factor or the QOF.

Just last week, Pulse revealed GP partners in some areas are in such financial difficulty that they have been unable to pay themselves for several months as the GPC warns that managers must act to avert a ‘serious crisis’ in general practice.

Luke Bennett, partner at Francis Clark LLP, said the expenses estimates in the DDRB report were a ‘mystery’ and that he estimated that staff costs have gone up by around 2.5% and that GPs will have to make ‘drastic decisions’ to reduce staff hours or cut posts.

He said: ‘It doesn’t make sense to anything we see on the ground, where staff costs have continued to go up.’ He added: ‘GPs should have got a pay uplift of 1.89%. If we assume average GP earnings are £100,000, then this is a pay cut of £610, instead of a pay rise of £1,000.’

Rosemary Smith,senior partner at RS Medical Accountancy, said that in the ‘worst case’ GPs could see a 7.5% drop in take-home pay.

She added: ‘I have not found to date that GPs are reducing their staff costs, [but] they might well need to do so next year to reduce the impact on their income.’

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and head of medical services at Baker Tilly, said ‘there definitely isn’t a 1.4% drop.’ He estimated that costs have increased between 2% and 3% for the average practice.

He said: ‘Increasingly we are seeing practices having to cover more staff hours because of increasing patient demand, which leads to more hours being paid for so overall staff bills are going up’.

He added: ‘The current trend of people leaving the profession is going to continue, no two ways about that.’

A Department of Health spokesperson said: ‘We are committed to investing in primary care and as part of our ambitious changes to the GP contract there will be a reduction of more than a third of the QOF, allowing money GPs currently earn from these targets to be pumped in to overall primary care budgets and a new enhanced service.’