The proportion of GP income being sucked up by practice expenses has risen above the level it was at before the introduction of the new GMS contract in 2004, new figures show.
NHS Information Centre statistics show that while average gross earnings for GMS and PMS GPs across the UK rose to £262,700 in 2009/10, up 1.6% on the previous year, expenses rose even faster.
On average, GPs paid £156,900 in practice expenses, up 2.4% from 2008/09.
The crucial expenses-to-earnings ratio in 2009/10 was 59.8%, up 0.5% from the previous year – and for the first time topping the 2003/04 figure of 59.5%.
The watershed moment comes after repeated attempts by successive health secretaries to curb GP profits, beginning with Patricia Hewitt in 2007.
The contract deal for 2012/3, announced earlier this month, represented the sixth pay freeze in seven years for most GPs, with accountants warning still-rising expenses are likely to result in an average effective pay cut of 2% next year.
A Department of Health spokesperson hailed the latest figures as evidence of a successful squeeze on GP pay, insisting: ‘We are committed to securing the best possible value healthcare from the GP contract so that resources are used to the greatest benefit for patients and the taxpayer.
‘The average GP income is now £4,200 (3.7%) lower than in 2005/06. In addition, all public-sector staff earning more than £21,000 a year, including GPs, are subject to a two-year pay freeze in 2011/2 and 2012/3.
‘The GP contract changes recently agreed with the BMA recognise this and demonstrate commitment to delivering improved patient care.’
Dr Richard Vautrey, GPC deputy chair and a GP in Leeds, said: ‘GPs and the services they and their practices provide are amazing value for money, and it is because of GPs that the NHS remains one of the most cost-effective health systems in the developed world.
‘The increased volume and complexity of GP workload, together with practice expenses reaching such a high level, mean the Government has to start investing in general practice if it has any hope of achieving wider NHS £20bn efficiency targets.’
The expenses-to-earnings ratio was highest in England, at 60.6%, compared with 59% in Wales, 53.4% in Scotland and 51.7% in Northern Ireland.
Dr Elizabeth Barrett, a GP in Mansfield, Derbyshire, said: ‘There is a squeeze. We seem to be getting more work to do for less money, but we will have to get on with it.’