Exclusive Changes announced in the Budget could cost GP practices across England a total of £260m, new data gathered by Berkshire, Buckinghamshire and Oxfordshire LMCs has revealed.
GPs have raised concerns that following the announcement of the rate of employer National Insurance Contributions (NICs) increasing to 15%, as well as the National Living Wage (NLW) rising to £12.21 an hour, practices will have to pay thousands more from April next year.
A survey on the expected impact of the changes in Berkshire, Buckinghamshire and Oxfordshire (BBO) found that the average annual recurring loss per practice will be £47,000, with almost 68% of practices expected to make redundancies or staff layoffs ‘in order to remain viable’.
It comes as last week, GPs told NHS England that the changes could cost up to £100,000 per practice, with some having to let go of staff as a result of the Budget.
According to BBO LMCs, one in six practices are considering handing back their contract and closing ‘due to no longer being financially sustainable’.
The LMCs said: ‘To put the scale into perspective, the per patient cost of these increases is approximately equal to the total per patient income that practices receive from all commissioned Locally Enhanced Services combined.
‘Scaling up our data nationally across England these costs equate to a loss of over £260m from the national GP budget.’
BBO LMCs’ survey results
- 108 practices responded, representing 45.4% of all practices in BBO LMCs, and representing a collective population of 1.46 million patients
- The total combined annual loss for those practices who responded is £5.1m. Scaled up across the whole of BBOLMCs this is £9.8m, or £11.1m if PCN ARRS costs are added.
- Scaling up the data nationally across England these costs equate to a loss of over £260m from the national GP budget
- The average annual recurring loss per practice is £47k
- The average funding loss per patient when calculated at a practice level is £3.64
- The estimated average increase in cost for a PCN is approximately £18.5k. This equates to a total loss from the PCN budget of around £1.3m across the whole of BBOLMCs
- 67.6% of practices would have to make redundancies or staff layoffs in order to remain viable
- 72.2% of practices reported they would have to reduce the number of appointments offered and limit access due to inability to afford staff
- 77.8% of practices are planning to either join or escalate BMA collective action as a result of the Government’s decision
- 1 in 6 practices are considering handing back their contract and closing due to no longer being financially sustainable
Source: BBO LMCs
The results also show that almost 78% of practices are planning to either join or escalate BMA collective action as a result of the Budget – and BBO LMCs has advised practices to ‘escalate all forms’ of action to ‘safeguard their own existence’.
LMC chief executive Dr Matt Mayer told Pulse that it ‘defies logic’ that despite their manifesto promises, the Government is taking actions which ‘will cut GP services’ and lead to ‘further unemployment’ among the GP workforce.
He said: ‘The response rate for this survey far exceeds any survey BBOLMCs has ever put out. This demonstrates the strength of feeling to the very real harm the Government’s plans pose to NHS GP services, which for some practices would mean closure.’
The BMA’s GP committee has also invited practices to increase the collective actions they are taking to ‘turn up the pressure’ on the Government following the Budget.
It has also created a calculator to help practices estimate the impact from April 2025 of these increases.
During a webinar run by NHS England last week, several GPs told the commissioner that the changes would cost them up to £100,000 extra, with some practices having to reduce the number of GP sessions provided, or even handing back their contracts.
One GP told NHS England: ‘We cannot stress enough how much of a threat the current NI and other Budget implications are for general practice collapsing.
‘It is already in crisis, partners are broken, exhausted and have already taken massive pay cuts. If something isn’t sorted within the next weeks, practices will start handing back contracts.
‘NIC will cost us £68,000, living wage and differentials make it £100,000. We were planning to recruit two new salaried GPs to help us cope with the explosion of work being dumped on us from a broken NHS. Now, we can’t.
‘With the recent settlement not covering 6% staff pay up lift and the other settlements in hospital staff makes you wonder what the agenda is.’
Another GP said: ‘The budget announcement looks to be starting to destabilise the general practice workforce.
‘Our first allied healthcare professional resigned today to move sectors as they can’t see any future signs of improved funding in primary care and any improvement on workload demands.
‘If this isn’t clarified urgently we are at risk of losing a lot of staff who are feeling very worried. ARRS and PCNs just aren’t capable of sharing the clinical workload sufficiently and are also taking a lot of money from core.’
The Institute of General Practice Management had previously estimated that the NIC changes alone will mean the average GP surgery’s tax bill will go up by around £20,000 a year, and they also said that a further increase to the National Living Wage will ‘equate to thousands more for most practices’.
According to estimates from the Association of Independent Specialist Medical Accountants, while a practice currently pays no employer contributions for a staff member on £9,100, the Budget changes add an extra £615 for said staff member, and with the NIC increase, a practice staff member on £30,000 a year will cost the practice an extra £866.
NHS England group director for primary care Alex Morton told the webinar last week that the commissioner has heard ‘a lot’ about the ‘real concern’ in primary care about the Budget announcements.
However, she said she could not provide any new information on whether the costs would be reimbursed.
She said: ‘I don’t have any information that I can share this evening on this specific area, that it’s clearly a matter for Government, and I know that there are a lot of discussions ongoing at the moment.
‘I did really want to acknowledge, though, that we have really heard some of the concern from primary care relating to this.
‘So presently, NHS England is working very closely with Government and at pace on the wider budget and how that will be delivered, and as part of that, understanding the NHS budget, we will understand the implications of our settlement for primary care. But I just want to acknowledge we know this is unsettling.’
A Government spokesperson told Pulse: ‘We have taken tough decisions to fix the foundations so a £22bn boost for the NHS and social care could be announced at the Budget.
‘The employer national insurance rise doesn’t kick in until April, and we will set out further details on allocation of funding for next year in due course.’
Speaking in Parliament last week, health secretary Wes Streeting said he is ‘well aware of the pressures’ on GPs and that ‘allocations’ for the year ahead had not yet been made.
The Budget fallout in brief
Since the chancellor’s announcement during the Budget at the end of October, the Treasury confirmed that funding has been set aside to protect the spending power of the public sector, including the NHS, from the direct impacts of these changes.
But GPs have been excluded from this, as the funding to offset the increased NICs costs does not include support for the private sector, including ‘private sector firms contracted out’ – with GPs generally operating as independent businesses for this purpose according to the Treasury.
The BMA have demanded the Government reimburse practices for increased NICs and asked GP partners to write to their MP demanding a U-turn from the Government.
The DHSC confirmed to Pulse that further detail on NICs for GPs will be confirmed in due course, and that it is working with the Treasury to ensure appropriate compensation for the public sector.
Alongside tax hikes, the chancellor also announced public spending increases with an additional £22.6bn going towards day-to-day health spending, and £100m ‘earmarked’ for GP estates upgrades.
For Pulse’s analysis of the budget, read: A Budget seemingly designed to punish GPs
BMA and rcgp leadership have been advocating increased taxes to fund increased NHS spending, which is what Labour have now done.
An economically illiterate and self-harming strategy, but what you asked form
What an abysmal lack of judgement shown by the government. Tax the backbone of the NHS more to provide more funding for the NHS but without any reassurance that any of that money is going back to primary care.
Are they suggesting that I as a GP partner should be taxed even more to pay for “more hospital scanners” or “40,000 more weekend appts a week” done by secondary care consultants.
They just got a fairly generous pay uplift, we did not.
And now we should subsidise secondary care getting new scanners, extra capacity etc.
And the cherry on the cake will be when all these additional secondary care appointments lead to yet more “GP to kindly” letters- I know where those can be shoved..
It is complete madness.
I suspect NI is now being used as a negotiating tool in the DOH discussions with GPC. When I say ‘negotiating tool’ I really mean ‘metaphorical gun pointed at their head’.
Well done to BBOLMC for exposing the scale and implications.
Budget threatens to wipe out half of 2024/25 GP contract uplift
Doubtless a crude negotiation tool for Wes and DH
WTR IA isn’t working I see in GP online ‘Patients’ overall experience of their GP practice and ease of contacting their practice have improved markedly since the summer, Office for National Statistics (ONS) data show’
Brilliant
meanwhile 2′ care blasted through an extra £4bn from april through july despite block and fixed value contracts