GPs ‘glaringly absent’ from NHS Budget investment

GP practices will be one of the few areas of the NHS worse off as a result of today’s Budget, due to the hike to employers’ National Insurance, without the increase in overall funding that trusts are receiving, experts have warned.

The BMA said that a ‘concrete’ plan to properly fund general practice was ‘glaringly absent’ from today’s Budget.

Chancellor Rachel Reeves announced that the rate of employer National Insurance will increase by 1.2 percentage points – to 15% – from 6 April next year.

At the same time, the chancellor has provided funding for public sector organisations – including the NHS – to cover the costs of the hike.

However, the only funding given to general practice is the ringfenced £100m to cover premises upgrades for 200 practices, with the vast majority of practices set to be worse off as a result of today’s announcement.

BMA council chair Professor Philip Banfield said: ‘What is glaringly absent from today’s Budget is a concrete plan to rebuild general practice.

‘GPs are the front door of the NHS, and we asked the Government to increase their funding by at least £40 per patient per year – just 11p per day.

‘Instead, the increase in employment costs will squeeze GP practices even further. We need to see immediate reassurance from the Government that it will provide additional funding to general practice to cover these costs.

‘Funding general practice properly saves money.  It leads to better patient care and fewer people needing to go to hospital, consequently reducing pressure on the already overstretched NHS.’

As part of the changes to NI, the ‘Secondary Threshold’ – the level at which employers become liable to pay national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.

Experts have warned that the changes will ‘only pile more pressure’ on GP practices, as surgeries and other primary care providers are not eligible to claim the Employment Allowance.

AISMA board member Andy Pow explained that the impact of the rise in National Insurance costs for employers ‘will be significant’.

He said: ‘The reduction in the threshold means practices will have to pay employer National Insurance contributions for more employees.

‘For example, where previously a practice would not need to pay employer National Insurance contributions for an employee earning £9,100, it will now have to pay £615.

‘The employers’ National Insurance rate is also increasing from 13.8% to 15% from April 2025. This means an employee earning £30,000 a year will cost the practice an additional £866.’

To mitigate this change, the Treasury said that the smallest businesses ‘will be protected’ through changes to the ‘Employment Allowance’, means certain companies do not have to pay employers’ NI.

However, Mr Pow says ‘GP practices and other primary care providers are not eligible to claim’ this allowance. ‘Unless the rules for this change, practices will be faced with the full cost uplift.’

The chancellor also announced that the National Living Wage will increase from £11.44 to £12.21 an hour from April next year.

Mr Pow said that although this 6.7% increase in the National Living Wage is ‘good’ for employees, it ‘further exacerbates’ the issue of how practices fund their staff, since pay differentials between different staff grades ‘will need to be maintained’.

‘This could mean another year of above inflation cost increases for practices,’ he warned.

‘AISMA is concerned that the staff cost modelling used by NHS England for the Global Sum uplift confirmed in August is out of date so this needs to be looked at very carefully.’

It comes after the BMA had already raised concerns that the ‘unintended consequences’ of national insurance rises could cause the closure of even more GP practices.

BMA pensions committee deputy chair Dr Tony Goldstone said that GPs ‘already have extremely tight finances’ so its ‘imperative’ that any rise in costs from this policy is fully funded for.  

Head of medical at financial services provider Alec Collie said: ‘Staff costs are already one of GP practices’ biggest outgoings and they have increased substantially in recent years, so today’s announcement on employer National Insurance contributions will only pile more pressure on practices.

‘It means they will have less capital to invest in frontline services at a time when so many practices are already overloaded.’

However, he added that GPs will ‘welcome’ the news that the tax-free lump sum was left untouched today.

The BMA had also warned that ‘punitive’ changes to pension taxation would ‘prevent doctors from taking on additional work’ and ‘force them’ to reduce their workload or leave the NHS entirely.

Mr Collies said: ‘After so many revisions to the NHS Pension Scheme, more changes could have rocked confidence in this very popular and well-regarded benefit and put medics off joining or staying in the scheme.’

Delivering her first Budget as chancellor, and the first Budget from a Labour Government for 14 years, the chancellor has announced a £22.6bn funding boost for the NHS over two years, including £100m ‘earmarked’ for 200 GP estates upgrades.

The Government will establish a ‘dedicated fund’ for general practice in order to deliver ‘around 200 upgrades to GP surgeries across England’, enabling practices to provide more patient appointments by improving the use of existing space.