Lack of clarity on NI hike for PCNs

There is a lack of clarity on whether PCN additional roles payments are to be protected from the National Insurance hike, announced in the government’s Budget last week.

The Budget confirmed that the rate of employer National Insurance Contributions (NICs) will increase by 1.2 percentage points – to 15% – from 6 April next year.

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 following some confusion last week, the Treasury has confirmed that GPs will be excluded from this since they operate as independent businesses.

When asked by Pulse PCN what measures would be put in place to help PCNs mitigate the impact of this on their Additional Roles Reimbursement Scheme (ARRS) staff budgets, the Department for Health and Social Care (DHSC) said details on funding allocations for next year will be set out ‘in due course’.

A spokesperson said: ‘We have taken tough decisions to fix the foundations so a £22 billion 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.’

ARRS wages have typically been linked to Agenda for Change wages, which is the pay scale that covers non-doctor staff within the NHS.

Trusts are set to benefit from an NIC exemption, however it is currently unclear how much impact the rise will have on PCNs.

So far, the NIC exemptions will include the costs of central government departments, public corporations and local government, but it will not include support for the private sector, including private sector firms contracted out, including GPs, Pulse PCN understands.

In October, NHS England confirmed that the increase to reimbursable amounts for the 37,000 ARRS staff this year were in line with the 5.5% Agenda for Change pay uplift. However, they also said networks would need to find the money to fund these uplifts within their existing budgets.

Earlier this week, health secretary Wes Streeting said he would take GP views on the NIC hike ‘seriously’.

In parliament on Monday, Dr Luke Evans, MP for Hinckley and Bosworth and a GP, asked the health secretary for clarity on whether GPs, hospices and care homes will be directly impacted by the changes, saying it ‘really matters to their costs’.

He asked Mr Streeting: ‘On the Budget, both GPs, hospices and care homes have been found to be either exempt or not exempt from the national insurance contributions. Will he clarify whether hospices, care homes and primary care are exempt or not?’

The health secretary responded: ‘I am grateful for that intervention for two reasons. Firstly, it gives me an opportunity to say to GPs, hospices and other parts of the health and care system that will be affected by employer national insurance contribution changes that I am well aware of the pressures, we haven’t made allocations for the year ahead, and I will take those representations seriously.’

Last week, Ruth Rankine, director of primary care at the NHS Confederation, said: ‘Our members across primary care will be deeply concerned if the employer national insurance contribution uplift has to come out of their core budgets.

‘GP surgeries may operate as independently-owned partnerships but they are wholly funded to provide NHS services and so they should be given the same support as NHS trusts and other organisations in the public sector.

‘As primary care providers have already not been given extra funding to cover the full cost of the recent pay awards, while also having to pay out higher cost of living allowances and increases in the minimum wage, this development could create a perfect storm in which some practices have no choice but to close or to cut back on their services as they cannot afford to keep them running.’

The Budget also announced a £22.6bn funding boost for the NHS over two years, as well as £100m of capital funding ‘earmarked’ for 200 GP estates upgrades.