GP funding in England has this month seen an injection of £311m to help practices pass on pay rises to staff – but many may struggle to do so. Here, Eliza Parr looks at this year’s ‘winners and losers’.
In July, the Government accepted the recommendations of the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) for a 6% pay uplift for GP partners, salaried GPs, and practice staff.
But the independent contractor model in general practice means that funding these pay rises is a tricky business. To do so, the Government decided to uplift the global sum by 7.4%, following negotiations with the BMA. The DDRB does not stipulate what mechanism to use to boost GP funding, but it’s no surprise that the Government stuck to a global sum uplift, as they have in previous years.
Some pointed out that if only the global sum goes up – leaving out other income streams such as local enhanced services – then partners may struggle to award themselves a 6% uplift. And in response to the 7.4% boost, the BMA acknowledged that it is above inflation, but stressed that it does not restore real-terms GP contract income to 2018/19 – which is one of the union’s key asks.
While all practices will see a cash injection, some may end up benefiting more than others. Given that the workforce mix can vary massively from one surgery to the next, there will of course be winners and losers. And there may be disparities within a single surgery depending on the staff group.
Salaried GPs
Any salaried GPs on the BMA’s model contract (i.e. most salaried GPs), are entitled to the full 6% uplift due to a clause which says ‘annual increments’ must be ‘in accordance’ with the Government’s decision following the DDRB report.
This means practices must ensure the pay rise is passed on to this cohort – and if they don’t, salaried GPs have a strong contractual defence.
Other practice staff
Other members of staff employed at a practice do not have the same guarantees. NHS England has said it ‘firmly expects’ GP partners to award the full 6% pay rise to practice nurses and reception and management staff. But the BMA’s GP Committee England pointed out that the DDRB report only covers doctors and dentists, and that pay for other staff ‘is a matter for employers as independent contractors’, regardless of the Government’s ‘expectation’.
So practices are not contractually obliged to use the 7.4% global sum uplift to pass on a pay rise to staff such as nurses or receptionists.
However, many partners will want to reward staff and to remain competitive as an employer. Indeed, the Royal College of Nursing has already urged practices to ensure that nurses are not ‘left out’, after a survey found that last year almost half of GPNs did not receive the 6% pay rise.
Katie Skea, medical accountant and partner at PKF Francis Clark, tells Pulse that ‘most practices have got good intentions’ and ‘feel obliged to pass something on’, but ‘not all are bracing to’ pass on the whole 6%.
‘Some are crunching the numbers at the moment and trying to work out what they can afford, because 6% is what is intended, but it won’t necessarily work out that way,’ she says.
GP partners
But the group most likely to miss out on the 6% pay rise is partners. The DDRB included partners in their recommendation for 2023/24 for the first time in five years, stating that the ‘pay element of contracts’ should be uplifted. Partners, as independent contractors, share profits after paying for everything else, so ensuring they can take home 6% more than last year is not simple.
Medical accountant James Gransby, a partner at Azets in Maidstone, tells Pulse that a majority of partners will ‘definitely’ struggle to implement the 6% pay rise for both themselves and their staff.
Describing it almost as a catch-22 situation, Mr Gransby says: ‘If partners were to meet the full staff expectation at 6% then they’re going to be depriving themselves of their own 6% that was destined for them. And if they keep the 6% uplift that’s meant for them, there won’t be enough cash in the pot for the salaried GPs.’
By prioritising their staff and other expenses, partners are unlikely to see a guaranteed pay rise this year. And it’s worth noting that the DDRB’s recommendation was based on GP earnings data from 2021/22 – three financial years ago. Data for 2022/23, published just weeks after the DDRB report, showed a notable dip in contractor earnings following the pandemic. The BMA highlighted that the picture today is even more ‘bleak’.
ARRS
Last year, reimbursements for staff under the Additional Roles Reimbursement Scheme (ARRS) were uplifted to match the Agenda for Change pay increase. But there was no boost to the total ARRS funding pot, meaning PCNs had less money to hire further roles.
The 2024/25 pay award for AfC staff is 5.5%, and the GPCE has suggested that this should cover ARRS staff too. However, since the Government has not announced any uplift to the funding pot, this will be an ‘unfunded cost pressure’ for PCNs.
It’s also worth noting that GPs are now included in the ARRS following a funding increase of £82m from the health secretary. PCNs will be able to hire ‘newly-qualified’ GPs from October, but it is still uncertain whether this scheme will extend beyond March 2025. Although there is not yet an established pay scale for these GPs, there are questions around how any future DDRB recommendations would apply here.
Workforce mix
Beyond individual staff groups, there are some practices who may find it easier to pass on the pay rise than others. Practices are free to determine their own staffing mix, and there is no ‘one-size-fits-all’ workforce model for practices across England. Ms Skea tells Pulse that those with a ‘lower staffing mix’ will have ‘lower costs for pay rises’ meaning more will ‘flow through to the bottom line’.
The Government’s ‘formula’ for calculating the global sum uplift is based on ‘typical’ level of staffing, she says. But most of her clients seem to be ‘more staff-heavy’ than this model. ‘So if they were to pass on the full 6%, the cost of doing so would more than likely wipe out most of the profit element for GP partners,’ Ms Skea adds.
Mr Gransby says that practices where there are ‘very few salaried GPs’ will likely make more profit. Some of his clients work under a model ‘where every doctor is a partner’, meaning they don’t have to ‘share out’ the 7.4% global sum uplift with any salaried GPs.
‘Whereas others, the higher earning practices I find, tend to have fewer partners and more salaried GPs, and it’s those that will suffer the most because they’ll have more people to whom that £7.77 [extra money per weighted patient] will have to be spread more thinly,’ Mr Gransby says.
The BMA has also pointed out that funding pay rises via the global sum does not reflect the ‘diverse skill-mix’ needed in ‘each individual practice’ to provide tailored patient care. This forces many partners to make ‘difficult choices’ about how to allocate pay increases, GPCE deputy chair Dr Julius Parker said in a letter to committee members.
Income streams
Partners may also encounter difficulties based on how they earn money. The global sum is the funding mechanism for core general practice work, based on a practice’s patient population. But partners can generate income in a variety of other ways – local enhanced services (LESs), QOF, clinical research, private work, dispensing. Medical accountant Andy Pow told Pulse last month that LESs are are ‘now generally worth more on average across the country than even QOF is’.
For those practices who derive a significant portion of their income from ‘non-core’ GP work, this 7.4% global sum uplift is more likely to fall short.
Mr Gransby says practices running lots of local contracts will be paying staff on the payroll for this work who also expect the 6% pay rise, and this will ‘put pressure on’.
Conversely, he says practices where a ‘larger proportion of their income is based on the global sum’ will ‘find it easier’ to pass on pay increases to staff. ‘In other words, practices that don’t have as many outside contracts or locally commissioned services, because they’re getting an increase on the biggest part of their income, and it’s going to help them – and they might also then have a lower staff cost relative to others, because they’re doing fewer outside services.’
Accountants also tell Pulse that dispensing practices may struggle to accommodate pay rises, as they derive a large part of their income from dispensing fees. Mr Gransby says the funding boost to the global sum does not ‘reflect the profit margins they’re making’ on their dispensing work.
Ms Skea, who works in Cornwall where there is a high proportion of dispensing practices, says their ‘profits swing based on what’s happening with dispensing fees’. This means the global sum uplift is ‘not expected to flow through to have much impact for the partners’. These practices are also likely to ‘have more staff working in the dispensing arm’ who will be eligible for the 6% pay rise too, she says. ‘But you can see that the funding wouldn’t really reach them, because there’s no increase in dispensing fees or towards other operations.’
The individual nature of GP practices means that even neighbouring surgeries may be facing very different realities when it comes to this year’s pay rise. But, despite these difficulties, Ms Skea points out that the extra funding is a ‘step in the right direction’.
And partners in England can, at the very least, plan for the rest of their financial year. Meanwhile, GP partners in the devolved nations remain in the dark about how the 6% pay uplift will be allocated by their governments.
