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GP pay to drop by a quarter following budget clampdown

By Gareth Iacobucci

Exclusive: GP pay is set to plummet by a quarter from its 2005 peak after the second of two successive public-sector pay freezes outlined in the new Government's emergency budget, accountants are warning.

The pay clampdown, to cover both 2011/12 and 2012/13, is likely to make it three pay freezes in a row for GPs, and an incredible six freezes in seven years.

Chancellor George Osborne said all public-sector staff earning more than £21,000 would see their pay frozen for the next two financial years, with the Department of Health making clear the pay squeeze would cover GPs.

Accountants are forecasting that GPs' pay will continue to slump after rising expenses have been stripped out, and will fall by around 23% over a seven-year period following the initial surge after introduction of the new contract.

Mike Gilbert, partner at RMT Accountants, said the falls in pay experienced so far would almost certainly accelerate unless GPs could generate even greater efficiency savings: ‘If you're not a dispensing practice, a lot of bills to GPs will go up 2.5% whatever. So with an income freeze, it just means unless GPs box clever in terms of efficiencies, the falls will get greater.'

Mr Gilbert said the one glimmer of hope for GPs would be the potential income they could gain for commissioning.

He said: ‘It will depend how much of secondary care goes into primary care. Will commissioning help to stop the downward trend? I don't know. It could certainly help to maintain income.'

The decision to announce a public-sector pay freeze also casts huge doubt on the role of the Doctors and Dentists' Review Body, whose recommendations on this year's pay award were ignored by the Government due to Treasury demands.

A DH spokesperson said: ‘Everyone who works in the public sector will need to play their part in helping to reduce the deficit. This includes GPs and proposals for GP pay will be outlined in due course.'

Dr Philip Reynolds, a GP in Warrington, said: ‘Having enjoyed the honeymoon period of the early days of the new contract, we are now trapped in a cycle of more work for less money. It is immensely frustrating but inevitable.'

Dr Rupen Kulkarni, a GP in Redditch, said far from a pay freeze, the announcement would mean sharp further falls in pay: ‘VAT going up to 20% will mean all expenses will go up. The pay freeze then becomes a mockery. This is another huge pay cut. Six out of seven is close to victimisation.'

GP pay plunges by a quarter