Pressure is mounting on the Government to protect GP practices from next April’s increase in employer National Insurance as analysis has shown that it could cost the average practice an extra £20,000 a year and put millions of patient appointments at risk.
In the Autumn Budget, chancellor Rachel Reeves announced that National Insurance Contributions (NICs) from employers will increase from 13.8% to 15% and that the threshold on each employee’s salary at which NI contributions kick in will be reduced from £9,100 per year to £5,000 per year.
The national living wage (NLW) will also go up next April from £11.44 to £12.21 an hour.
The Institute of General Practice Management (IGPM) calculated that NI rises will incur additional costs of around £2 per patient or approximately £20,000 a year for the average practice, placing them in an increasingly difficult financial position and having to face ‘tough decisions’.
Using the IGPM figure for their own analysis released last night, the Liberal Democrats have further said that the total cost to all 6,275 practices in England could amount to £125.5m a year – the equivalent cost of providing 2.24 million GP appointments, at £56 per appointment.
For the average surgery this could cost the equivalent of 357 appointments a year, the political party said.
Calls for more targeted support for general practice by the IGPM and BMA have now been echoed by the the Lib Dems, who have urged the chancellor to ‘exempt’ GP practices from the NI rise.
The figures showing the number of GP appointments that could be at risk has also prompted the NHS Confederation to voice its concerns, adding to pressure on the Government.
Ruth Rankine, director of primary care at the NHS Confederation, today said it is working ‘closely with the Department for Health and Social Care and NHS England’ to mitigate the extra financial risk facing surgeries.
The IGPM’s analysis, released the week the Budget was announced, highlights that since 2018/19 the GMS core contract has risen from £87.92 to £112.50 per per patient per year, equating to a 27.9% increase.
Meanwhile in the same period, the NLW has risen by 46.1%.
It warned that in addition to an average practice having to absorb a higher tax bill of £20,000 a year, the NLW will also see most surgeries having to pay out ‘thousands more’.
The IGPM said the ‘numbers simply do not add up’ and that as a result Labour’s pre and post election promises ‘will not be able to met’.
In addition, it has said to the Government that increases to the GP contract have been based on an ‘out-of-date methodology,’ introduced 20 years ago and that assumes that 40% of GMS funding is allocated to staffing costs.
Surveys of its membership have shown that staff costs are now closer to 90%, the IGPM has said, and in some cases they exceed 100% of a practice’s GMS income.
Despite this model being challenged publicly by themselves, the BMA and Association of Independent Specialist Medical Accountants (AISMA), ‘no lessons have been learned’ by the Government, the practice manager body said.
It added: ‘Any increase to funding needs to be applied to all local and direct enhanced services, public- health-commissioned services and to PCN funding, as well as to the core contract value to give a real-terms increase for funding.’
The IGPM has now called on the Government to clarify how budgetary allocations will specifically support general practices to avert them having to make difficult decisions, such as reducing staff numbers, cutting back on services or even closing surgeries.
‘The health secretary has vowed to bring back the “family doctor” – this Budget will not bring us closer to the this reality’, it warned before urging the prime minister, chancellor and health secretary to give practice managers ‘the tools’ to help them ‘finish their job’.
Last week, it was reported that despite Treasury funding being set aside funding to protect the public sector, including the NHS, from the direct impact of the NI changes, GPs have been excluded from this arrangement, since they operate as independent businesses.
The BMA has is urging GP partners to write to MPs to ask that practices be treated like other parts of the NHS and be protected from the tax hike.
At the weekend it also released an NI calculator to help surgeries estimate the impact of NI and NLW increases. It has asked BMA members to share the results with the trade union so they can be used to ‘heap more pressure’ on the Government to increase funding to offset the costs.
Meanwhile, Ruth Rankine at the NHS Confederation said it is ‘very worried about the impact the employer national insurance contribution uplift could have on the primary care sector if it must be paid out of GPs’ own budgets’ and the fact that more than 2 million GP appointments could be at risk.
She said: ‘We are hearing reports that some primary care providers could face eye-watering annual costs on top of already very low financial settlements. This could have a dramatic impact on capacity, with practices potentially having no choice but to close or to cut back on their services as they cannot afford to keep them running’.
Ms Rankine added that since GP surgeries ‘are wholly funded to provide NHS services…they should be given the same support as NHS trusts and other public sector organisations’.
‘We look forward to the Government officially clarifying its position to our members, who understandably are very concerned, and confirming which businesses will be protected,’ she explained.
‘In the meantime we are working closely with DHSC and NHS England on mitigation.’
